Insurance CRM: Creating Value Through Next-Generation Operating Models

Insurance CRM - Creating Value Through Next-Generation Operating Models
The purpose of insurance is enough protection for a rainy day. The covid-19 pandemic cloudburst means even the most prudent insurers are rapidly needing a bigger umbrella.

To complicate matters, most customers aren't aware of myriad insurance products and its intricate workings. Insurance product recommendations are so complicated that it reduces even veterans to tears. This leads to buyer uncertainty and loss of confidence before making a purchase. Which is unfortunate as a confident buyer is 3.6 times more likely to make a high value purchase. (Source: Gartner)

To thrive and survive in the new reality, shift in operating models will be critical. Insurers must act decisively and boldly by delivering expanded services, creating end to end customer sales and service journeys at all channels and touchpoints.

1. Offering differentiated products
Most insurers provide commoditized products with thin margins. However, digital enables them to increase their profitability and value to customer by delivering personalized, tailored, differentiated products. This includes micro and niche insurance plans at touch points like high value product purchases,service centers and even niche health insurance packages like surgery covers. Insurers can specialize in a niche and even diversify in that niche category.

For example, leading insurers are increasingly offering wedding insurance, riot insurance and for the discerning customer even alien abduction insurance.

2. Delivering differentiated service with AI
The increasing adoption of AI, ML technologies and powerful platforms are enabling insurers to connect with their customers at all channels, even non traditional ones. Engaging in an Open Communication Platform (OCP) enables insures to instantly respond to their customers and deliver instant fulfilment when needed. Insurers can access real time damage estimation through integration with third party systems and telemetry analytics. They can also evaluate damages through images or description with AI, OCR and image analysis.

A leading insurer has initiated an instant claim settlement platform with smart bots driven FNOL (First Notification of Loss) System for its auto insurance products. The system processes claims instantly by integrating with third party repair systems and automatically verifying damage and repair estimates leading to automatic reimbursements as soon as the invoices are verified through digital signatures.

3. Dynamic Pricing with Usage based Insurance (UBI)
Usage based insurance (UBI) primarily refers to dynamic insurance premium pricing based on customer's behavioral and usage analytics. This allows insurers to move away from a mindset of simply reducing claims costs and becoming an integral part of customer's lives by offering holistic core value propositions. Remote monitoring with telemetric data analysis can help reduce car insurance costs and boost preventive healthcare. This helps to make insuring higher-risk consumers more economical feasible, rewarding and also opens the door to new innovative insurance packages.

Recently, the Singapore government has partnered with Apple to reduce healthcare insurance costs with with personalized program to encourage healthy activity and behaviors using existing hardware. More than 2 million people were enrolled within 3 months of the launch.

4. Enabling smart distribution channels
Insurers can eliminate much bottlenecks and increase coverage by expanding digital access and AI driven digital performance enablers for agents. This approach can help free up more than 40 percent of sales teams capacity, allowing them to focus on significantly improving the volume of new business.

Insurers are delivering technology-enabled services to help improve customer care and boost efficiency. Insurance leaders who are in the forefront on developing and delivering innovative business models are the ones who will reap disproportionate value in the new reality.

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