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Mark Breading, SMA
Mark Breading, SMA
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What Omnichannel Really Means in Insurance

What exactly is the difference between omni- and multi-channel?

Is omnichannel just the latest buzzword in the insurance industry, or is there real substance behind the concept? You have to admit that it sounds pretty cool. Omni is a powerful prefix; it means all or every, and carries the connotation of being all-encompassing or unifying. A skeptic might insinuate that omnichannel means the same thing as multichannel. After all, insurers have been living in a multichannel environment for years, seeking ways to improve the integration between channels. However, to truly understand why omnichannel is different, we need to look backward.

First, let's look back to the 1990s, when the notion of multichannel became popular. Before that, the channel options for insurers were limited. The primary choice was between captive or independent agents, with a few companies offering contact center communications. The '90s saw the rise of two phenomena that reshaped the ways insurers communicated with the outside world: the Internet and more sophisticated market segmentation. Every insurer rushed to develop a web site to provide a new way to do business. At the same time, more insurers began to examine their customer segments in detail and develop a more varied approach to segmentation. As insurers understood more about the needs of new segments, they recognized that more channel options and flexibility were required. Then a third phenomenon took hold during this past decade that has further shaken up the channel picture – mobile technologies. Mobile devices overlap existing channels and provide new options for reaching both producers and customers.

Next, let's take a different kind of backward look, with the attention on the directional orientation of the channels. Traditionally insurers planned and managed channels from the inside-out perspective – the company view. Today, the focus is on becoming customer-centric, and more insurers are taking the outside-in view – the customer view.

Mark Breading, SMA
Mark Breading, SMA

So what does all this have to do with omnichannel vs. multichannel? These trends have resulted in most insurers using a multichannel model. Channels were added one by one as the need and opportunity arose: a new contact center for a new line of business, a worksite channel to support group business, an Internet self-service channel, or portals for agents and insureds. Typically, these were implemented for specific purposes and resulted in channel silos. Soon, the rallying cry for many insurers became the call for multichannel integration – working to make the handoffs and interactions between channels more seamless.

[Previously from Breading: Does improving the customer experience matter?]

Today, the new imperative is the creation of an omnichannel environment. There are three primary differences with omnichannel.

1. Customer Experience: Insurers today are highly interested in improving the customer experience. Whereas the objective in the past was to improve transaction efficiency and reduce channel costs, today the concern is on understanding how channel interactions impact customer perceptions. Efficiency and cost will always be important, but the driver for investment in the omnichannel world is the customer experience and its implications for retention and profit.

2. Customer Journey/Lifecycle Planning: Multichannel integration strategies tended to focus on the individual transaction. Often, it was about the technology and process changes of transferring the information and context of one transaction to the next stage. An omnichannel approach considers the entire stream of interactions that the customer is likely to have with the insurer. Mapping out these interactions throughout the lifecycle of a policy and considering the customer's multiple products is vital. Understanding customer preferences enables insurers to design a channel environment that provides all the options, while keeping channel switching transparent for the customer. The customer never has to repeat or re-enter information, never has to wait too long for a response, and always interacts with a person or system that understands the relationship and the context of the customer's request.

3. Unified Digital Communications Platform: An omnichannel environment considers the customer view (outside-in) from the beginning. Rather than working to integrate channels that have been created in silos, an omnichannel approach leverages a unified digital platform to support all channels and connect to the core systems on the back end.

In 1888, Edward Bellamy published a novel, Looking Backward: 2000-1887, about a future utopian society set in Boston. Perhaps insurers, by looking backward, can actually move forward toward realizing the promise of the future omnichannel environment. I'm looking forward to seeing how the insurance industry adopts the omnichannel approach.

About the author: Mark Breading, SMA partner, is a recognized expert in advanced technologies and their implications for the insurance industry. He has exceptional knowledge of data and analytics, customer communications in insurance, enterprise content management, and advanced technologies including mobile communications. Follow him at @BreadingSMA on Twitter.

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Becca L
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Becca L,
User Rank: Author
4/27/2014 | 6:47:09 PM
re: What Omnichannel Really Means in Insurance
I agree, more than ever businesses need to understand the entire lifecycle of a client to
stay competitive. That means knowing the interests and frustrations that have been expressed across all channels. At any moment of contact all elements of the customer's relationship are being considered.

That information can be an incredibly powerful tool that helps insurers and banks prompt phone calls from customer service, even alter even the ads and web text customers are
presented with upon login, to be sure it is most relevant to their situation and
interests.
Becca L
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Becca L,
User Rank: Author
4/27/2014 | 6:40:13 PM
re: What Omnichannel Really Means in Insurance
Kelly, you're so right, "This trend is more than a buzzword; it's the future of customer experience strategy." This Omnichannel trend is pushing this idea that "conversations" with
customers can't happen in t+1 anymore, they need to be real time, and
they need to be the same no matter the channel of interaction.
mbreading430
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mbreading430,
User Rank: Author
4/26/2014 | 4:28:54 PM
re: What Omnichannel Really Means in Insurance
Thanks for all the comments and added perspective. Nate - good point about claims - it is often a period of intense, emotionally charged interactions through various channels. I do believe it is important for both the sales and the service side though.
Nathan Golia
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Nathan Golia,
User Rank: Author
4/26/2014 | 1:28:14 PM
re: What Omnichannel Really Means in Insurance
Thanks Mark. I think it's in claims where we see the full impact of omnichannel. In the process of claims adjudication, customers will reach out often and in different channels G㢠and the insurer had better have their view of that customer lined up so that each agent knows where that relationship stands!
Jonathan_Camhi
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Jonathan_Camhi,
User Rank: Author
4/23/2014 | 9:13:49 PM
re: What Omnichannel Really Means in Insurance
I think you're point about it being a journey not a destination is an important one to remember. Set smaller goals and benchmarks and work towards them gradually, and constantly be testing the impact on customer experience as the changes take hold. Satisfied customers are a great asset.
Rob Cornwell
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Rob Cornwell,
User Rank: Apprentice
4/22/2014 | 11:04:56 PM
re: What Omnichannel Really Means in Insurance
We've been using "Omnichannel" to describe the seamless integration customers' expect and companies seek to deliver across access points & channels for some time at Cisco. It is now being recognized across the industry thanks to writers like Mark. It is absolutely more than a buzzword in the insurance industry, it's the target carriers must aim for and constantly evolve to... It's a journey not a destination or off the shelf solution. Customers do business with a company, not an agent, a contact center, a web-site or mobile application. And their needs vary based on the type of interaction. All they ask is "know me and assist me" on any device, at any time, through any access point... A tall order to deliver, but we're making great strides!
Kelly22
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Kelly22,
User Rank: Author
4/22/2014 | 5:39:55 PM
re: What Omnichannel Really Means in Insurance
Thanks, Mark, for such an in-depth description of what omnichannel means for insurers and customers. This trend is more than a buzzword; it's the future of customer experience strategy. More insurers (and businesses in general) are adopting the outside-in approach and creating a customer-centric focus so they can anticipate and cater to their needs. Omnichannel will deliver a seamless experience, which today's customers have come to expect.
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