Advancing technology in the insurance space cannot be viewed in linear terms. Service delivery processes and advice processes require two different strategies and solutions.
The one is how digital transformation can speed up and improve business processes and service delivery efficiencies. And the other is the impact digital transformation has on how we interact with our customers and the long-term effects this has on the advice process.
Adviser-customer relationships have traditionally been developed through face-to-face interaction. But the Covid-19 pandemic has changed all this with advisers being forced to embrace virtual communications with their clients.
So, what is the future of advice going to look like when the Covid calamity finally subsides? Will we continue on the current trajectory of virtual interactions or will we go back to face-to-face meetings? In our view, it will not be one or the other, but rather an integration of physical and digital channels. We’re already headed in that direction.
This view is supported by a study1 that shows that as Artificial Intelligence acceptance has grown as a result of Covid, satisfaction levels have decreased, largely due to individuals wanting human connection. That’s why we believe the future of human advice is secure. People want a personal interaction, whether it’s over a Zoom call or face-to-face.
To understand this more fully, it’s important to delve into key consumer trends shaping our industry landscape. The biggest driver of change is a changing customer mindset. This will have the biggest impact in how we approach advice, the products we offer, and our service delivery processes.
Millennials are no longer in their late teens or early twenties. The older individuals who fall within this generational group are turning 40 this year. And they form the largest segment of today’s workforce. They’re also the most under-insured group, which offers immense opportunity if we take the time to understand how this target market thinks and behaves.
Millennials have a completely different mindset to previous generations. Which means they can’t be sold insurance in the same way as previous generations. They’re delaying traditional milestones such as marriage, children and property ownership. They’re individualistic, self-reliant, well-educated and tech savvy. They want autonomy, flexibility and financial freedom. This mindset is also moulding a new employment landscape as we see an exponential growth in the gig economy.
This market segment was born using digital technology, so digital platforms are simply a way of life for them. Technology is inextricable from the qualities that define them and how they live their lives. They expect service delivery to be customised, seamless and immediate; and they are unforgiving of any business or service provider unable to deliver on this expectation. That’s why embracing evolving technology in our service delivery processes is so vital, simply to remain relevant.
However, trust is still the number one factor when it comes to buying life insurance, no matter one’s age or generation. Almost half (47%) of the respondents in a recent Beyond Life Global Consumer said they always prefer human interaction, and this figure varied very little across the different age groups. Only 7.6% South Africans said they’d prefer to do life insurance online first.
Technology such as digital forms, electronic signatures, intuitive and reflexive application questionnaires, automated data entry, and reminder notifications all have a massive impact on the speed and efficiency on processes – which translates into a better customer experience and ultimately a better return on investment for your business.
But no matter how times change or what technology is introduced, trusted advice can only be earned through human interaction – because trust needs real people to flourish.
So, what are the two biggest challenges you face going forward as an adviser? According to a recent McKinsey survey, generating leads and building initial client relationships remotely are the two biggest challenges identified. That’s where insurers like FMI can step in and assist by introducing digital platforms and processes. This will relieve advisers of the disproportionate amount of time spent on customer service and administration thus allowing you the time to spend one-on-one with your clients, whether that be face-to-face or virtually.
While technology serves as a primary enabler to modernise complex legacy systems, differentiation comes from relationship building and loyalty. Authentic, emotional connections with customers will never become out of date. To deliver true value, keeping the customer at the centre of any innovation is key.
What can insurers do to remain relevant? We need to adapt our offerings to allow for different occupations, increasing morbidity rates, and changing life stages. We need to focus on how we can simplify and streamline the risk assessment and underwriting process to reach a younger market on their terms. Finally, we need to make sure insurance is simple, relevant and accessible by investing in the right technology to support advisers and changing consumer trends.
1Capgemini Study 2021
• Itonics - Plugged in. B2C Insurance in the Digital Age
• GWI - Connecting the dots 2021
• Remark - Beyond Life Global Consumer study 2019 - 2020
• McKinsey survey October 2020 - How COVID-19 has pushed companies over the technology tipping point—and transformed business forever
• The South African Customer Satisfaction Index (SAcsi)