June 13, 2020
Insurance Digitalisation: Learning from Carphone Warehouse
As the expectations for better insurance experiences and clearer communications continue to rise, insurance providers are under growing pressure to up their game. InsurTech and digital insurance solutions help providers to transform their experience and reduce customer frustration. EIP’s CEO Ross Sinclair explores the need for insurance digitalisation and how we can learn from the fines handed out to Carphone Warehouse and Liberty Mutual.
What we can learn from fines handed out to Carphone Warehouse and Liberty Mutual
Carphone Warehouse, Liberty Mutual and other big-name brands have changed the way that they operate as a result of the breaches that resulted in the aforementioned fines. But with human nature being what it is, it’s almost impossible to ensure total consistency of messaging, at all times, to all buyers across a large retail estate. Especially in a pressured sales environment where incentives to sell financial products are common.
You can train people, set standards and reinforce and monitor them, but we’re still dealing with wonderfully imperfect, inherently fallible human beings. From time to time, corners will be cut. This will result in compromised messaging and individuals falling short of standards. The real danger is when ‘from time to time’ becomes ‘accepted practice’.
So, what’s the answer? A move towards insurance digitalisation to help streamline scheme and claims management.
The benefits of insurance digitalisation
The benefits of insurance digitalisation are clear. Firstly, at the distribution end, the customer generally has more time available online than at a retail point of sale. And you can collect more pertinent information on a much more consistent basis.
Tailoring insurance products to customers’ needs
Intelligent chatbots can collect information in a ‘soft way’ to elicit key details. Greater detail allows greater tailoring of insurance products and prices to the customer’s needs. Complex regulatory and product information can be provided to the buyer on a consistent, ordered and fully auditable basis before they opt to purchase the product. And you can carry out real-time automated checks to validate that insurance products are right for the customer and offer comparisons.
With native mobile insurance apps, options and quotations can be provided directly to the mobile device, and, importantly, bespoke for that unique customer. The gives customers more confidence in full disclosure and reduces the tendency to resile during the cooling-off period.
Reduced claims handling times
For claims handling (one of the issues in the Liberty Mutual fine), there is a similar benefit to insurance digitalisation. By automating most of the routine processes, the approach to claims decisions can be guaranteed completely consistent, and again, auditable. Insurance digitalisation and smart InsurTech solutions can cut claims handling times to less than 90 seconds. All key information required to protect both the customer and the insurer will still be collected and delivered. No more listening to elevator music on a call-centre IVR for ages while constantly hearing that ‘your call is important’. Paradise.
Fully-automated claim decisioning
Initial reaction to fully automated online claims handling and decisioning versus speaking to a human in a contact centre might not be universally warm, but it makes complete sense for device insurance. A contact centre generally works off a mapped script. The claims process for device insurance is relatively simple and linear. Settlement (repair or replacement) is straightforward and usually without adjustment. You can even build fraud identification into the decision algorithms and use machine learning to refine decisions over time.
Insurance digitalisation also improves compliance
As a result of insurance digitalisation and the use of automation, the customer gets a much faster, more efficient and completely legally compliant service with a guarantee of full information. Meanwhile, the retailer has a much cheaper distribution channel. Plus, they can sleep soundly in the knowledge that there are no chinks in the regulatory armour.
Open the pod bay doors Hal!