New research from Strategy Meets Action (SMA) indicates an increased focus on customer communications and content management (3CM) among insurers in the P&C and L&A sectors.
SMA polled 112 North American insurers to better learn how they communicate with customers and distribution partners as well as how they capture, create, store, manage and deliver documents. The study includes four areas of communication: enterprise content management (ECM), customer communications management (CCM), contact centers, and document archiving and retention.
Insurance is unique from other industries in that electronic channels have not replaced human sales representatives. SMA found that while agents and producers will continue to handle the majority of customer interactions, their roles will be enhanced by new technologies and digital channels as insurers focus more on customer-centric strategies.
“We try to take a broad look at digital content from the inbound side through the outbound side, and digital content internally as well,” says Mark Breading, partner at SMA and author of the report. “The big driver is the energy around the customer experience.”
Most survey respondents (65%) are investing in 3CM to improve customer service. Increased digitization not only leads to better service but also contributes to cost reduction, which 47% of insurers identified as the primary driver of investment.
The increased focus on customer experience has increased insurers’ focus on outbound correspondence, says Breading. According to survey results, three of insurers’ top five projects for 2014 and beyond emphasize e-billing, e-delivery and e-signature capabilities.
“I think e-delivery is a really critical area,” he explains. “It’s complicated and it’s going to be a long journey as insurers look at all the different types of touches they have with their customers.”
Breading advises insurers to be thoughtful about their communications strategies and urges them to fully understand their consumers’ preferences. While the world primarily communicates through electronic channels, insurers should balance customer values rather than transition to all-digital correspondence.
“Some people may want their policy in the mail but if they have a claim, they want to communicate via mobile phone so they know what the status is,” he says. Many companies are trying to optimize printed output and decrease print center cost to move towards digital. While there are many opportunities to decrease printed documents, save money and invest in new projects, Breading explains, there are still certain communications that must legally be done on paper.
The types of documents prioritized by P&C and L&A insurers are similar but there are various differences due to the nature of their business lines. All typically offer electronic quotes, policies and bills, but P&C is placing increased focus on claims and renewals while L&A emphasizes marketing and promotions.
“Success in life insurance is really about customer acquisition,” Breading explains. “Nobody’s focusing you to buy an annuity, it’s all optional.” Life insurance typically involves more intense communication on the front end, he says, because there is usually less customer interaction after a policy is purchased. When life insurers need to initiate customer interaction, it typically requires the more personal approach of a meeting or phone call.
In contrast, says Breading, P&C is a more mature and saturated market because people need insurance for their cars and homes. Claims are a top priority in this space because multiple transactions are likely to occur after a policy is on the books.
“The challenge right now is that so many companies are thinking about how to improve the customer experience and move towards this omnichannel environment where communications are more seamless,” Breading says. “It makes for a complicated picture.”
Despite the differences in their correspondence priorities, both P&C and L&A insurers face challenges when evaluating their communications strategies. Breading advises them to step back and consider how they can design a unified digital strategy that covers the entire spectrum of customer transactions. This involves determining an ideal form of communication and choosing the right platform to optimize that.
Breading identifies social media and mobile as two areas that are poised for growth. The question of mobile is vital and insurers are in the process of making content available through mobile apps. In addition, many use social media for advertising and branding purposes, he says, but have not yet begun to interact with policyholders or create communities. There is still potential for them to capitalize on the power that social media can bring.