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How Digital Technology Will Change Insurance Engagements

Propelled by the coronavirus pandemic, the digital customer experience is now even more important to client satisfaction and profitability.
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Many insurance carriers fail to deliver on their core principles: helping homeowners. As many as 74% of customers believe the home insurance industry needs improvement, while 13% call for radical improvement, according to a 2019 J.D. Power Home Insurance Study. Insurance companies and independent agents need to improve their game and meet client needs to stay competitive.

Incorporating technology into their practices and focusing on client satisfaction rates are important to a company’s goals. Insurance agents can avoid costly customer acquisitions by prioritizing customer retention through continuous, positive interactions. A better customer experience begins with meeting customers where they’re most comfortable, and these days, that’s most often on their mobile devices.

Even before the coronavirus pandemic propelled a dramatic shift toward virtual interactions, digital platforms had been becoming the preferred destinations for consumers. In 2018, the number of “digitally active customers” had increased by more than 60% in the previous four years with a 70% increase in mobile adoption, according to the 2018 Customer Behavior and Loyalty in Insurance Report by Bain & Company. Millennials are leading this charge with Generation Z on their heels.

This digital boom offers new opportunities to improve insurance engagements. The same digital landscape that allows policyholders to secure quotes from competing insurers within minutes also provides opportunities for insurance agents to develop better relationships with their customers.

A key driver in optimizing customer satisfaction is leveraging knowledge about the customer to personalize every connection. By understanding what the customer appreciates and their pain points, agents can deliver the coverage and services their customers desire at the “moment of truth,” that critical interaction when the company can either delight or alienate the customer.

No longer will insurance agents only interact with their policyholders for billing, claims and disputes. Instead, they can promote a positive dialogue by providing policyholders with the information and tools they need to take better care of their home.

Four-fifths of customers would entertain an ecosystem of service, according to Bain & Company’s report, which would provide not only coverage to homeowners but also advice, a bundle of smart home technology, and other services such as interactive apps. Customers who used ecosystem services gave their insurers the highest ratings.

In addition to higher customer satisfaction and retention rates, transcending the traditional policyholder engagement and creating new, personalized interactions, insurance agents can increase policyholder retention and reduce the number of claims while simultaneously boosting their profitability.

Carriers who educate, enable, and empower under-informed policyholders not only help develop better homeowners but also safer homeowners and more loyal customers. Showing genuine care for clients generates higher profits from a stronger portfolio. Those who do succeed are historically rewarded. Insurers that top the J.D. Power Ranking for customer service typically are the most profitable, and 88% of buyers say they are willing to pay more to receive a better customer experience.

With interactive home education and recommendations from InsurTech solutions, policyholders can fully realize the risk of owning a home and proactively adjust their behaviors to mitigate those risks. This can be especially helpful for policyholders who don’t understand how having multiple small claims or a lack of home maintenance can lead to an increase in their annual rate—or even cancellation.

The integration of digital technology into the insurance carrier world will be a game-changer in how both customers and insurance agents interact. Cutting-edge apps will replace the old model with a more proactive approach, adding a higher comfort and convenience level to the user experience, and improving customer satisfaction rates and retention.

Dr. Alfred Bentley III is CEO and founder of vipHomeLink.