The Insurance Elephant Is Not High Maintenance – Even If Innovators Think So

“I’m just a regular customer,” the Elephant muses. “I don’t need fancy or complicated, I simply need attention when I need attention.  Sometimes I don’t even know what attention I need; I am uninformed to the point where I trust those who help me in providing me what I need.  I’m a casual trouser and polo shirt guy.”

It’s true- insurance customers are not complicated- for the most part.  Insurance customers have been on the sidelines of insurance ‘doings’ for decades; almost placed there purposefully by the industry based on the limited insurance education customers have been afforded and on the gradual exclusionary evolution the industry has experienced.  Innovation has been continuous for those decades. Innovation that has primarily focused on the operations, underwriting, and processes carriers utilize in conducting business.

So the Beast wonders, “what is this innovation and disruption I hear of in snippets and rumors?  My policy renewal hasn’t changed, my agent (for the most part) contacts me if pricing changes are pending and he is worried I’ll shop around.  The Gecko, Flo, Mayhem, Lady Liberty, State Farm beat the advertising drum about the price I should pay for my coverage. Status quo, baby! Some of Junior Elephant’s peers are consuming Lemonade while they shop for insurance, and from what Junior says there are new ways to buy insurance. But those kids have apartments, can’t really know too much about what they are doing (although I am secretly pleased that the kid even knows what insurance is), and, like idealistic approaches to politics, are of the age to experiment on these things, right?”

What is the industry doing to move the analog insurance customer into the digital world?  Up until 2018 investment in insurance innovation was active ($30+ billion on a $6 trillion industry) but not significant in terms of dollars spent, and direct to customer information marketing has been minimal.  If 2018 innovation investment is in the $115 billion range to date, it suggests that either larger markets are getting more deeply involved (China), or investment activity is broadening beyond R&D and getting into product/market distribution.  

Customer service, or the actions at the ‘Moment of Truth’ (hear the ominous music in the background) is what drives insurance for the customer and is where the service vendors (towing, repair shops, board ups, damage mitigation, contractors, restorers, ALE services, etc.) interact with the customers.  “Yes, there have been many efficiencies built into accessing these vendors,” the Beast ponders, “but in what way have those innovations helped me? Getting a vendor assigned doesn’t get my auto towed. It may allow market-priced costs to the claim file, but Vinnie the driver is still Vinnie. And sometimes Vinnie is distracted, is late to the scene, and I don’t know how to get in touch.  AAA has a pretty good system for emergency auto services, communication of the driver’s expected time of arrival, sharing of cell numbers, etc., but AAA is not who my carrier calls. Carry that thought to all the rest of the possible services I might need and no wonder I get frustrated! The carriers have organized and ‘efficientized’ all the vendor work but seem to have overlooked the part I need- control over and understanding of what comes next.”

I wonder if carriers were able to better understand what we customers really need, would that change how their innovation efforts were designed?  Coding and development operations can create cool applications and back-office processes, predict what I am doing next (that would be a real trick), hint at whether I am being a naughty insurance customer, track my driving performance, give my agent automated reminders and so on. But who is watching if my complex claim is progressing well, if the efficient parts of the process are playing nicely together, if my repairs are underway, if a contractor is disputing my claim estimate, if the claim adjusters are properly attending to my service?  And more importantly, is there artificial intelligence that can TAKE ACTION when the response sections are not acting within two standard deviations of expected performance? Here’s a secret- as customers, we really don’t care how great service is provided, we simply want and need great service.

Need an example of what I mean?  Let’s discuss the poster child success of claim innovation: the auto photo claim.  Different names for different carriers, but in essence it’s a descriptor for having minor auto claims handled via online claim filing. Customers capture damage images using smart device camera software. Carriers then use the images to generate a damage repair estimate and issue actual cash value using direct pay to your bank account software.  Intuitive, easy to access (kind of), easy to estimate using operations centers, and pretty quick turnaround time for the estimate and payment.

Use of the method suggests some assumptions- the customer is reasonably tech savvy to use the application, the customer agrees to use the method, the customer has agreed to the method of payment, and the customer is reasonably confident that the method will produce an outcome that gets him/her on the road to claim resolution.  Most often, the customer needs to agree to these steps in advance (toggling options in an online policy profile). They agree to it. OK. On with seamless, automated delivery of repair cash to my account!

Or not.  “If I recall,” thinks the Beast, “I did sign up for all the tricky tech; in fact, I had completed a prior claim using all the same auto processes.  So why was I called by a human claim processor to confirm a claim was initiated, that the company had these options available to me, and that her contact information was XXXX?  She interrupted my day, didn’t add any value to the claim handling that I couldn’t have seen online, and simply served a legacy role- initial contact. That served the carrier’s process only, not mine.  Next, I received a call from an adjuster who had completed the estimate, confirmed who I was, advised an email would come that had the estimate for my review. What? What value did that adjuster add, what value would I add reviewing the estimate, and yes, it was courtesy, but I. Didn’t. Need. It.  I followed their rules, signed up, and simply wanted resolution. We won’t even talk about the body shop experience, the supplement experience, or wrangling rental cars- those industry benefiting processes are for another day.”

Yes, it’s early days in claim service innovation (or at least it seems so), but if innovation is to take hold in the analog service world, it needs to be clear in its application to be a benefit for the customer, and not simply be layers of cool applied to the top of the existing claim process.  Clear thinking must be had- who is the process helping- the carrier, the vendors, or the customers? If it’s not the customers, better rinse and repeat. There must be a realization that the companies and customers who are handling claim service entirely within a digital world will in the not too distant future be the majority participants in claim resolution.  At this time they are the relative exception, but they are learning to serve and be served through innovation. All the rest of us who are still analog Elephants want to benefit from change but do not want to have complications from our carrier playing with change.

“We are simple,” the Elephant is reminded, “not dumb or resistant, but simple.  I just want service that is easy, and that helps me understand what is next. If your AI, machine learning, API, chatbotting CRM model can give me that, bring it on.  And I still like checks, if that’s possible.”

About Patrick Kelahan

Helping those who need to use technical assessments of property insurance claims, environmental events, and risk analysis of facilities, partnering H2M expertise with end users, providing training to staff, and providing guidance in compliance with regulation. Helping bridge the gap between technical expertise and claims expertise. Property insurance appraiser. Customer service evangelist. InsurTech observer and customer experience defender. Insurance claim improvement advocate.

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