The rise of the ‘empowered consumer’, coupled with the push towards digital distribution models, is fundamentally reshaping the insurance products of today, according to panelists from FST Media’s 9th Annual Technology and Innovation – The Future of Insurance conference.

Greg Booker, Chief Information Officer for RACQ, noted a progressive trend towards tailoring insurance products around the consumer’s immediate needs and purchasing habits.

“[Traditionally] we built products based on what the business wants,” said Booker.

“What we are seeing now is a turnaround [in the insurance industry]… breaking those products down into component pieces and giving customers the opportunity to choose from these components.”

Jamie Vachon, AMP’s Head of Technology, while echoing these sentiments, further noted the fundamental disconnect that exists between the traditional policy packages offered by insurers and the increasingly individual needs of the modern, empowered, consumer.

“Building products that we think will meet their needs is no longer hitting the mark,” said Vachon.

(L-R): Greg Booker, Chief Information Officer, RACQ; Peter Brittliff, Senior Product Marketing Manager, Fuji Xerox; Rachel Ashley, Head of Operational Transformation, Zurich Financial Services; Jamie Vachon, Head of Technology – Insurance, AMP; Jason Davey, Digital Customer Experience Executive, Westpac

Driving Customer Centricity in a Digital World

“It is clear [our customers] do not [understand] the products that we sell,” Vachon conceded.

According to Vachon, the key to successful product design is effectively incorporating customer insights into product designs. It is thus incumbent upon insurers to ask the right questions.

“Sometimes [we] do not know what customers want unless we find ways to ask them,” said Vachon.

For Jason Davey, Digital Customer Experience Executive at Westpac, the complexity of traditional insurance products has proved a significant barrier to effective consumer engagement and, ultimately, the ability for customers to effectively comprehend insurance product offerings.

“When you go to market with a very complex offering that you have to explain over and over to your customers, you are not [starting] on the right foot for a good conversation,” said Davey.

The movement towards ‘human-centred’ product designs and distribution models, which are focused on more personalised, receptive and responsive customer interactions with the insurer, seek to eliminate the inherent

complexities found within traditional policy packages.

“Using human-centred design principles allows us to investigate the ‘why’: why are we doing what we are doing for the customer? Without this approach, we [will] continue to produce products that are complex and require constant upgrades and explanation,” said Davey.

Data-driven insightsPeter Brittliff, Senior Product Marketing Manager at Fuji-Xerox, outlined the vital importance of utilising data to drive product development.

“Insurance organisations have a lot of data to help gain customer insights in real-time,” said Brittliff. “Analytics helps interpret customer feedback, from real-time social channel data, and remains one of the best ways to solicit real feedback from your audience.”

Gaining customer insights has moved beyond a simple data aggregation. According to Booker, collecting meaningful feedback – “asking the right questions” – remains one of the fundamental challenges for successful product development today.

“Unless you ask the right question, you will not know what you are trying to achieve. I think that is where a lot of businesses are struggling: how do we make more intelligent questions to find what we are after?” he asked.

For Vachon, capturing the right customer data that gives actionable insights into individual needs of customers can give insurers the competitive edge in product development and service delivery.

“[The right data includes] things like customers’ life goals. [These are] small data sets, but are really valuable to help us understand what customers are thinking. Having a single customer view is one thing, but the insights you capture in the process can help you differentiate [whether you] are meeting customers’ needs,” said Vachon.

Overcoming organisational challengesWhile data-driven insights are increasingly important to today’s product development process, for Rachel Ashley, Head of Operational Transformation at Zurich Financial Services, without the necessary

cultural evolution meaningful product innovations will be stifled.

For RACQ’s Booker, developing products that appeal to younger, more digitally savvy customers requires a major attitudinal shift within the industry and an acceptance that insurance products must meet changing consumer habits.

“Most actuaries and managers within insurance who have been in the industry for a long time require every nuance to be considered, which drives up technology complexity and slows product development. We need to shift that mindset to drive speed-to-market on products that have less features, but are probably more aligned with our target audiences,” said Booker.

While the panel agreed that incorp-orating capacity to allow for potential product or distribution failures can offer invaluable insights, Ashley cautioned they also need “executive buy-in” to test new product offerings and consent to ‘fail fast’. “Without executive support, it will be very difficult for insurers to move forward,” according to Ashley.

Vachon agreed, saying “from a technology perspective, the ability to quickly test and learn requires a fundamental mindset shift.”

Allowing a certain element of creativity to permeate the product development is also crucial to the success of any human-centred design process.

“The ability to apply something that is really going to engage an audience in a creative way, or utilise messaging in an engaging process that starts a conversation, is really the home of creativity in the delivery cycle,” said Davey.

However, Davey suggested that any creative element must be tempered by the practical need to find measurable value from these creative endeavours.

“To test whether those attributes will work, requires software and a platform where you can obtain and measure continual feedback,” said Davey.

“Creativity is only beneficial to the customer as long as the organisation recognises that pursuit of making something attractive or engaging is more than just a touchpoint.”

While creative design elements provide the necessary edge to deliver engaging customer experiences, Ashley also advised that the industry cannot ignore the critical importance of quality service and customer engagement in shaping today’s insurance products.

“It is great to have a cutting-edge product or proposition to go to market, but you must support it with service,” said Ashley.

Indeed, while you may have the customer “on board” with your solution, it is incumbent on insurance providers to effectively service the customer. If this can be achieved, “customer engagement and loyalty [will inevitably follow],” said Ashley.

The Advance of Multichannel CommunicationThe convenience and accessibility of digital platforms have proved increasingly attractive product delivery models to an upcoming generation of customers. To remain competitive, insurers must ensure their distribution models can effectively service these evolving purchasing habits.

One of the fundamental challenges is the ability to ‘humanise’ digital

interactions, particularly for more complex product offerings.

“If we think about our life [insurance policies] or income protection claims process, we quickly go the digital [route], but customers want to talk to people as well,” said Vachon,

“We must ask ourselves: when does it make sense to bring a human into the conversation, and when can technology augment this?”

RACQ’s Booker stated that assuming customers desire more human interaction in their exchanges with insurance does not always bear out in evidence, saying “we had the two biggest claim events in history in the last four months. In both cases, we had nearly 100 per cent of claims through online channels, which has been an eye-opener and a real challenge for our claims areas.”

For Booker, it was simply a case of practical convenience over the empathetic ear of the claims handler, adding “customers just want certainty that their claim is lodged and then they are prepared to move forward.”

From the consumer’s perspective, Brittliff believes that practical benefits of digital product delivery are increasingly important.

“If I make a claim … it is not so much that I want a transactional experience. I just want to get it done... to fix that problem,” said Brittliff.

“Give the customer choice,” said Brittliff. “If the [customer wants to use a] mobile phone, you should allow this via an online platform. If they want to speak to someone personally, we need to facilitate that.”

Ashley agreed, stating that customers may require different platforms for different stages of the product cycle.

“If you have a life claim, you might want to initially submit it online, but as that claim progresses you probably need to talk to somebody,” said Ashley.

Vachon concluded, “there is no silver bullet.”

“It is all about finding different ways to listen, because the answers will be different depending on what you are talking about, and who you are talking to.” *

“Give the customer choice. If they want to use a mobile phone, you should allow this via an online platform. If they want to speak to someone personally, we need to facilitate that.”– Peter Brittliff, Fuji-Xerox