Ask an insurer if they offer online insurance and then ask the same question to a customer of the service. You will hear different answers. Why? Because they have very different reference points. Insurance companies answer this question by looking back to a time when they didn’t have anything online.
They know they have already invested in online and started offering some things – information about their products, even quotes for some of the products on their website. Some have made documents available for download or even provided the claim form fields on their website. In a way they tried to copy-paste their offline process from the paper documents onto their website. So their answer to the above question would be Yes.
Why do customers disagree then? Because their reference point isn’t the past of the insurance business, their reference point is the current state of many other industries, which are either digitally born or have embraced the digital era much faster. Customers are used to experiencing an easy, fast, transparent, seamless end-to-end process, supported by fully web-based systems. Don’t get me wrong, they might not know (nor particularly care) what systems are behind their experience, but they sure know the difference between what a website interface and a system can provide.
Answer this for yourself. If you are an existing Amazon customer, would you be ok to retype all of your profile information every single time you want to purchase a book? Or to type your address and credit card details every time you order an Uber? So why do insurers ask from their customers to give them the same information again and again, type it, retype it, dictate it on the phone. The answer is simple – because the process is still highly manually driven with a lot of papers being manually or semi-manually processed in various systems that do not talk to each other.
Recently, somebody shared with me their frustration with their existing US insurer. It turned out that just couple of days after she added her son to her policy after an incredibly cumbersome and time-consuming process, she received an email from the marketing department of the company offering “a special deal” for her son. And the premium listed in the email was even higher than what she had paid. Imagine her astonishment that the marketing and sales teams of her insurer obviously did not communicate and the marketing department did not have access to an up-to-date customer file. This small example illustrates the deeply rooted problems caused by the outdated software modular approach. If all employees, let alone partners of the insurance companies use various separate modules that are poorly integrated with each other, offering a coherent, end-to-end online experience to the end customer, by simply building interfaces that use functionalities from the backend systems, is impossible. If the goal is a sophisticated, easy, convenient and gratifying 100% online insurance process, insurers need a system from a new generation to take care of it.