Customer Convenience in Digital Insurance

Outward Facing Digital Properties are a Means to an End

Digital has become an all-consuming topic in customer experience discussions today. Companies in traditional industries have worked to inject digital products, features, and concepts across all their verticals. In many ways, this has been a resounding success for both companies and consumers. Digital efficiencies and opportunities improve the bottom and top line and customers benefit from innovations and efficiency present in modern digital products. However, the excitement and promise of digital can create challenges for companies who lose sight of the primary purpose of digital: the customer.

The luster and fun of playing with new technologies, creating new designs, and producing content can sometimes seem to be inherently valuable. Mistaking digital as valuable for its own sake can create perverse incentives for organizations, can become wasteful, and can open the door for competitors and disruptors. Instead, to fully realize the benefits from digital, companies need to understand that digital is not valuable to customers because it is digital. Digital is valuable to customers because it creates new and *convenient* experiences. As a company builds out its digital roadmap and maps out the features, products and properties it intends to build, it should ask: is this making it more convenient for my customer to accomplish a task?

What is Customer Convenience

Customer convenience is not a concept unique to digital but has been the essence for customer experience innovation for as long as there have been businesses. It is more convenient to get in a car than take care of a horse; to flip on a light switch than light a match; to drive through an ATM than speak with a teller; or to have Netflix deliver DVDs to your door than browse the shelves at Blockbuster. Customer convenience is something that simultaneously provides value to the customer, while ALSO lowering the effort it takes the customer to do something. Importantly, any time or mental energy spent learning a new product, feature, or process counts against this effort.

Convenient experiences do not need to be complex or grandiose. They can be simple-but-effective additions to existing products. Seamless, the ubiquitous urban food ordering app, continues to simplify getting food delivered to your doorstep. Each feature added to the flagship app works to minimize the number of steps it takes to have food delivered directly to the customer. The “Express Reorder” feature is an interesting example of a minor feature to improve convenience. Express Reorder does not offer any gamification or monetary benefit – in fact, the screen space it uses can hinder a users’ ability to discover new foods – but Express Reorder removes a handful of screens and several clicks, shortening the time it takes between a customer picking up their mobile device and eating.

In contrast, experiences that seem to add convenience can often do the opposite. Menu customization is a feature that would seem to provide a way to reduce future clicks and improve experience. However, the act of manually manipulating the menus and actively choosing which should appear creates extra effort for customers. This effort creates a net-negative in convenience for customers and therefore is rarely used.

Convenient experiences can seem obvious or inevitable upon reflection but require impressive foresight and innovative thinking to create. Fortunately, digital provides a wealth of new opportunities to provide simple, convenient, low barrier experiences for customers for a fraction of the traditional capital and resource investments. Mobile has become critical in the development of new convenient experiences, because the platform itself is inherently convenient. The J.D. Power 2019 Insurance Digital Experience Study demonstrates customers’ hunger for this platform and its experiences, with mobile results outperforming desktop results across all indices in the study: East of Navigation, Appearance, Availability of Key Information, Range of Services, and Clarity of Information as well as several key insurance related tasks.

Building Convenience in Insurance

Insurance products hold a unique position in the customer space. Insurance products are heavily marketed, highly competitive, consumer facing, and are in high demand, but they are products that consumers hope to avoid using and insurers want to avoid delivering against. When customers do need insurance products it is often in a moment of extreme need. This dichotomy in demand versus delivery desire has hampered digital innovation in the insurance industry, with onboarding, sales, and marketing methodologies using more intellectual and resource capital. As a result, the number of insurtechs has exploded in recent years, with 3.1 Billion USD being invested in 2018 (IDES 2018). These disruptive aspirants have identified the dearth of digital creativity in customer experience and are producing convenient experiences to build competitive advantage.

One of the more mature insurtechs, Oscar Health, launched in 2012 with a stated purpose of redesigning the health insurance customer experience. They worked to integrate a more modern user interface with traditional service assistance to help patients navigate the complex health insurance industry. Distilled, their approach was to make managing health insurance more convenient and with this concept they have built a 500 million USD valuation (per IDES 2019).

Lemonade has been prominent in insurtech discussions for a few years. Their product suite is not more varied than their competitors, nor their prices more competitive, nor their service exceptional. The primary difference between Lemonade and a traditional insurance company – as highlighted by their marketing material - is how convenient it is to acquire and use their features. Their landing page, www.Lemonade.com, highlights ‘Instant Everything’, ’90 Seconds to get insured’, ‘3 minutes to get paid’. To a customer lost in the jargon of premiums, payouts, deductibles, annual benefits, and tax-free savings accounts, the convenience of being able to acquire a plan and get claims paid out quickly outweigh potential price differentials.

At first blush, Clover Health appears to be less digital or modern than other insurtechs, but digging deeper reveals a focused omnichannel proficiency, mobile apps, and digital acumen to build tailored and convenient supplemental service for a traditional insurance package. Their desktop homepage at www.cloverhealth.com has a click-to-call button as a primary CTA. Simple. Effective. 24/7 telehealth, proactive outreach, and in-care visits create a digital ecosystem that puts customer experience first.

None of these insurance companies should be considered ‘disruptors’, in the traditional sense, as they do not attempt to reform or change the fundamental business or delivery model of insurance, nor are they a danger to put major players out of business. However, they are piloting convenient digital customer experiences that will chew away at the margins and market share of major players until they are either bought or traditional companies improve their digital acumen to outpace them.

Building a Convenient Experience

Building a convenient customer experience requires innovation, skill, expertise, foresight, and knowledge. There is no guaranteed path to success, but there are several steps that an organization must take to even begin.

1. Do your research, by understanding the customer and the industry. No company should do exactly what customers say they should do, nor should they always deliver exactly what their customers think they need, but they should work to understand customer pain points, journeys, and key drivers. Additionally, every company should understand where it is positioned relative to competitors and key trends. Digital is accelerating. New trends and technologies are launched daily, and product cycles are shortening, requiring faster and faster updates. As a result, a company should learn all it can to stay relevant.
2. Start simple. The insurtechs highlighted above have not necessarily produced new technology, or invested in risky capital investments, but they have found a foothold in an established industry through simplified, clean delivery of convenient experiences. A company should not attempt to launch a complete AI or machine learning platform as its first key digital initiative. Building a convenient experience can start with as simple a product as an “Express Reorder” button. Per the first recommendation, a company should know its own abilities before embarking on a huge project.
3. Avoid doing things for the sake of doing them. Buzzwords like omnichannel, personalization, voice assistance, and chatbots can cloud product discussion by presenting themselves as a means to an end. Personalization is not inherently valuable to a company or its customers; personalization does not provide value to a company or its customer if the service that it provides is complex or obscure. Use new trends when they can provide convenient experiences, not because they are valuable trends.
4. Build a flexible roadmap. Digital is fickle. A company should have a clear vision of where it wants to be in six months, a year, three years, and ten years, and it should stick to this roadmap. Nevertheless, iteration and agility is the name of the game. Convenient experiences are inherently subject to the whims of new technologies, and building a plan with the ability to incorporate new ideas, concepts, and challenges is necessary.

Customer Experience is Key

The pace of change in the digital age can seem daunting for any large insurer. Nimble disruptors and technology companies can produce cheap, clean experiences for customers quickly, making a big splash that can send ripples across markets. To keep up with insurtechs, modern insurers must recognize digital as a means to an end, not an end unto itself. The true north star is creating convenient experiences for customers. The unique relationship that insurers have with their customers makes this even more critical. Insurers looking to become digital leaders should understand their customers and digital trends, should start simple, avoid common pitfalls, and be flexible. Digital is more important than ever and it will always be used best as a vehicle for improving the lives of customers.