Is it time for the insurance industry to embrace the digital switchover?

By Tim Spencer

If you’ve turned on your television, read a newspaper or walked past a billboard recently, the chances are you’ll be fully aware of the UK’s digital TV switchover.

This got me thinking, where has the insurance industry got to on its own journey of digital transformation? In particular, how close are we to seeing the widespread use of electronic and online delivery of renewal notices, policy schedules and other customer-facing documents?

For the insurers there are a number of benefits associated with transitioning a large proportion of their customer base to electronic and online document services. The most obvious one is the significantly lower operational costs that could be realised through lower printing and mailing costs.

Moving customers to email and online services has the potential to deliver a range of fringe benefits. With customers opted-in to email communications and enrolled to online services, the delivery of timely and finely targeted communications becomes operationally feasible and far more cost effective. When combined with the use of customer analytics, insurers have the capability to run data-driven and minutely segmented campaigns that  serve up targeted and timely offers to customers at the right time and in the right way. This opens up opportunities to drive follow-on, cross-sell and referral business in a way that doesn’t alienate the customer.

At a basic level, it’s clear that many customers are now comfortable with electronic document delivery and web-based kiosk services, so long as they feel in control. Our belief is that this is a trend that it likely to grow, especially as the younger generation become policy holders. The challenge will be to convince the great majority that there is more behind the move to digital than a cost-cutting exercise. Communicating the benefits to consumers throughout each stage of the digital TV switchover is something that has been handled particularly well and is, perhaps, a good case-study for insurers wary of committing to investment in this area.

Is it time for insurance to go digital?

A successful transition is likely to involve the development of systems oriented around the needs of the customer and a strong commitment to promoting the benefits that they bring. We believe that technology should be seen as an enabler to developing a more customer-centric business and not a barrier. Some general insurers have already made the move and are beginning to see the benefits, not just from the operational efficiencies delivered, but also from additional business resultant from providing customers the services they want in the way that they want them.

It’s not beyond the bounds of imagination that policy holders will manage their cover more effectively and actually increase their commitment if they can do so in a way that is quick, easy and convenient. Adding another named driver onto a car insurance policy for a short period or increasing cover for a high value item just purchased are two examples that immediately spring to mind. And many customers would prefer to access their schedule and policy documents online rather than keep reams of paper filed at home.

Consumers already research, compare and buy many insurance products online. The use of the web can and does extend beyond the research/discovery and purchase processes and insurers should take advantage of the move to digital and offer services that meet customer expectations. The insurance industry needs to adapt quickly to be ready for the digital change and it is encouraging that there are some insurers who have implemented or are already in the process of implementing innovative digital solutions.