April 10, 2012

More and more insurers are finding that their relationship with customers begins online. Through digital media – including the Internet, social networking, blogs, video, smart phones and other channels – customers have broad, immediate access to an extraordinary amount of information. They are using this access to search for, learn about and get advice on insurance products, services and providers. In fact, more U.S. consumers now use the Web to engage with insurance companies than use telephones. Digital channels are becoming the first source in determining which insurance products and services to buy.

In the $158 billion U.S. auto insurance segment, 72 percent of consumers use the Internet to learn about auto insurance; 67 percent of consumers who shopped within the past 12 months received a quote online, helping to generate 38.8 million quotes in 2009 in the U.S. alone; and a small but rapidly growing critical mass of U.S. consumers now purchase their auto insurance policies online, buying a record 2.8 million online policies in 2009.

Carlos Lugo
Carlos Lugo

This shift to digital hardly means that insurance agents have disappeared. Accenture’s own research shows that 67 percent of consumers who are planning to purchase insurance “in the next 12 months” intend to renew or buy insurance through agents, with 43 percent intending to buy online. Whatever means the customer uses to make the final purchase, however, it seems clear that the digital channel is now the primary ground for influencing customer choice in insurance.

In insurance, as in many other consumer products and services, digital preferences are creating a new class of consumers who shop online and purchase offline. This hybrid behavior creates a significant opportunity for traditional agent-based carriers. Hybrid consumers seek and reward insurers who provide seamless, relevant multi-channel interactions. Traditional carriers, with their large agent networks, are better positioned to provide this experience, but doing so requires creation and nurturing of a high-performing digital ecosystem.

John Del Santo
John Del Santo
Well-conceived and executed digital ecosystems will not only help carriers influence consumer choice in the digital space, they will help resolve the conflict between digital and agent channels, integrating them to enable a consistent, relevant multi-channel shopping and purchasing experience. The digital ecosystem will generate more leads, allocate leads to the right channels, and increase close rates and retention rates.

There are six defining features of an effective digital ecosystem:

1. Relevance at scale. An effective ecosystem is able to understand a visitor’s intent and profile, and use this information to assemble meaningful, digital experiences that resonate with the visitor, drive engagement and increase conversations. Insurance carriers that present generic advertising copy and landing pages are missing opportunities to generate relevant interactions. Advanced analytics and software catalogue the wide range of intents expressed in the search channel and elsewhere.

2. Continuous optimization. Once relevance at scale is achieved, continuous optimization allows changes to the user experience as warranted. Continuous optimization builds upon rich visitor profiles and intent to meet the level of detail sought by the visitor.

3. Full integration. The effective digital ecosystem integrates upstream into the media cloud (e.g., social, mobile, display, and search) and downstream into the agent and contact center channel. This enables relevant interactions on a consistent basis throughout the entire customer buying process.

4. Global standards. The effective ecosystem provides global standards with local control, delivered through a single, integrated technology platform. This allows for the creation and enforcement of standards and lowers total cost of ownership.

5. Support for multiple platforms. Visitors should have a seamless experience across all digital channels along with multi-channel transaction processing. The high-performing ecosystem uses a single customer data repository, multichannel processes and session management technology, among other capabilities.

6. Self-diagnostics. The ecosystem may experience implementation problems as multiple individuals within the organization make updates and changes. Self-diagnostic capabilities enable the ecosystem to scan itself, find issues and take corrective actions.

Relevant digital interactions with new and existing customers will be fertile ground for insurers and other service providers seeking to increase wallet share and revenue. Insurers that work to bring agility and intelligence to their digital ecosystems can expect significant, measurable results, from better conversion rates and lower costs to growth in customers and revenue. A phased approach, using pilot programs and campaigns to test new capabilities and gain internal support, has the best chance of success. At a time when digital technologies are fundamentally transforming consumer behavior, those insurers who take action now and begin delivering relevant cross-channel consumer experiences at scale will be able to create a lasting competitive advantage.