While insurers have rapidly embraced the Fourth Industrial Revolution in the wake of Covid-19, they are well aware that nothing can replace human engagement, and that it lies at the centre of their business.
Driven by the urgency to provide essential support to clients during the times of lockdowns and physical restrictions, insurers rushed to embrace digital operations and systems. Online portals and mobile apps became the new norm, enabling insurance companies to issue policies, receive claims, and renew policies, all digitally.
However, this new normal also highlighted an essential element of the insurance business: frontline staff are critical to a business that, by its nature, puts people first.
While the industry has rapidly moved towards adopting new technologies and enhancing innovations over the past three years, it’s time to go back to basics and find a way to humanise digitisation and the well-evolved business context in which we find ourselves.
Without a doubt, online services can provide a fast way to address customer demands but, ultimately, consumers want to interact with a real person during times of crisis, such as in the event of the death of a loved one. They need someone who can respond with empathy and be there for them when they need it the most.
The outbreak of Covid-19 brought about significant changes, not only for consumers but also for insurance companies. In South Africa, the pandemic has underscored the importance of life insurance and cover, leading to a surge in the demand for new policies. The Life Insurance Industry in South Africa 2022 report published by Research and Markets revealed a notable increase in new policies as South Africans recognised the need for adequate life insurance and income protection cover.
There is a staggering monthly expenditure of R12.3 billion on insurance premiums. Nearly three in five South Africans have some type of insurance, with funeral cover being the most popular product, according to the 2022 Financial Sector Outlook Study by the Financial Sector Conduct Authority.
For insurers, this shifting landscape has prompted a profound transformation in their operations. Automation has emerged as a key enabler, empowering clients to manage their policies online and allowing insurance companies to collect and analyse data more efficiently.
According to McKinsey’s research, 44% of insurance work activities could potentially be automated by 2030. While this may raise concerns about job displacement, McKinsey asserts that digitisation will redefine the nature of work rather than eliminate it. Roles that focus on repetitive tasks and manual processes will undergo significant changes, while workers who possess technological and digital prowess will become increasingly valuable. In this context, emotional intelligence, interpersonal skills, and social competencies will assume greater importance, particularly for customer-facing agents who can adeptly address customers’ evolving financial and insurance cover needs.
Insurance companies equipped with advanced analytics will forge close and trusted relationships with customers, enabling them to offer personalised services tailored to ever-changing needs. This transformative approach will empower insurers and their agents to proactively cater to their customers’ needs. However, it is essential to recognise that online channels must complement traditional offline channels to make sure there is a harmonious integration of both realms, driven by a symbiotic relationship between humans and machines. It’s crucial that insurers and other businesses find a balance, taking advantage of the strengths of both machines and humans, without alienating one from the other.
Power of personalised services
Accenture’s 2022 report emphasises the transformative impact of personalised services on insurers. According to the report, a remarkable retention rate of 81% can be achieved through tailored offerings that ensure that customers receive the exact cover they desire. Furthermore, personalised services have the potential to boost engagement by a staggering 89%, allowing insurers to foster a strong and enduring connection with their customer base.
As the insurance industry evolves, the need to strike a delicate balance between innovation and preserving the human touch becomes essential. Insurers must never lose sight of the fact that with every claim, there is a human being on the other end of the line, possibly facing a traumatic life experience, and in need of support. No amount of innovation, technology, or bells and whistles can ever replace the impact of human interaction and empathy.
While technological advancements and self-service interfaces provide convenience and efficiency, it is crucial to never overlook the human aspect of customer service. Empathy, understanding, and real-time assistance during critical moments are irreplaceable. Insurers who prioritise personalised services and maintain human interaction will build enduring relationships with their customers. By offering customers exactly what they want, precisely when they need it, insurers can solidify their position in a fiercely competitive market and deliver exceptional experiences that go beyond expectations.