The thrust of digitalisation in life insurance is to empower customers and do away with bricks and mortar offices. But what do the customers want? Life insurers need to go digital but must retain the human touch.
The COVID-19 pandemic has accelerated digitalisation by the insurance industry and both insurers and the customers have adapted to the situation well.
An important question has, however, arisen – should digital technology be regarded as anything more than a tool or digital enabler in life insurance? Technology has helped quicken several actions in life insurance, much to the benefit of the life insurance customer, however, there are times when the customer wants the human touch.
Asia Insurance Review spoke with some life insurers and insurance professionals to understand if digitalisation can obviate the need for a human touch? Will we be able to do away entirely with communicating with another human being in the context of life insurance?
Life insurance and life events
Life insurance is often intricately related to milestones concerning life events. At times it becomes very emotional and personal in nature. The process of purchasing a life insurance policy has always required a personal face-to face-human interaction.
Life insurance policies are long duration financial instruments and the customer requires a continuous reassurance from the insurance company. The regular collection of premium personally by the agents was one touch point which used to assure the customer about the continuity of the promise by the insurer.
Birla Institute of Management Technology associate professor of insurance Manoj Pandey said, “Until the pandemic, all the digital adaptions were a part of institutional upgrading to facilitate process improvement but the customer was not a direct party in these and these were not customer dependent.
“The current round of digital disruption riding on the base of social media, mobile connectivity, analytics and cloud computing requires active participation from the customers and hence its success depends on the level of preparedness not only on part of the insurer but customer too,” said Professor Pandey.
Multi-generational customer base
Life insurance companies invariably have multi-generational customer bases. The multi-generational customer base very often becomes a serious challenge for life insurance companies.
Professor Pandey said, “Life insurers will need to have a flexibility in their services offered and the service delivery models to cater the need of their different customers. A rigid set-up can be used only at the cost of alienating one specific segment of the market.”
Aegon Life Insurance managing director and CEO Satishwar Balakrishnan said, “A human-centric business like life insurance requires greater emphasis on the customer’s onboarding and persistency. By combining behavioural data with a deep understanding of consumer motivations, we can minimise friction – resulting in a more pleasant experience for the customer overall.”
Insurance management consultant Ashish Jhajharia said, “Insurance Industry as a whole requires more soul searching. A protection sold with too much fine print with not-so-amazing services and at a lower premium has worsened customer trust and customer experience in the insurance industry. What are the expectations of a customer, low premiums, faster customer services or higher quality protection?”
Mr Jhajharia said, “Helping to reduce customer choice fatigue can be a big enabler. Human experiences have a clear connection with their expectations. Are we really getting what we were really expecting and do we really want to pay paid for those experiences?”
Customers still trust humans more
Consumers overall still trust human advisers more than digital for certain services. Half (49%) of consumers involved in Accenture’s Global Insurance Consumer Study 2021 trust a human adviser in a branch when making an insurance claim while only 12% trust an automated digital service and just 7% trust a chatbot.
Accenture Interactive insurance group leader Todd Staehle said, “Insurers need to master a delicate balance, offering simple, self-service digital options as well as the human touch for more complex issues that require empathy or nuanced advice.”
Great Eastern Life Assurance managing director digital business Ryan Cheong told Asia Advisers Network, “For those who feel that digital in the insurance space means no service or advice from financial representatives, nothing could be further from the truth.
“Digital is the way to empower the distribution network and tip the scale in terms of how to engage and connect with customers. This has involved an integrated set of digital tools to empower its financial representatives to deliver better customer experiences.”
Speaking with Asia Insurance Review a spokesperson for Fubon Life Insurance said, “We are people-oriented and are committed to providing active, moving and professional services. We actively introduce various insurance technologies to create the most humane insurance services.”
Mr Balakrishnan said, “COVID has given insurers an impetus to rethink traditional business models but the challenges cannot be solved by technology alone. Digitisation is an important enabler. A combination of the right talent and technology will enable insurance brands to capitalise on growth opportunities while efficiently navigating new and existing risks.”
Closing the deal with a human being
PYMNTS’ new Life Insurance Engagement Report: Consumers, FIs and the Life Insurance Digital Path to Purchase, published in April 2021 revealed that “consumers want to comparison shop, pay and interact with their providers how they want and when they want,” yet they want to close the deal with another human being.
The study surveyed over 2,300 consumers about their behaviours and attitudes toward life insurance found that “consumers prefer to discuss their life insurance choices in person before purchasing, even when the decision process that brings them to a particular insurance product runs through digital channels”.
More than a third of the participating life insurance customers prefer live human interactions with brokers and advisers over other ways of buying life insurance.
Only a hybrid model will be effective
Insurers, therefore, must provide an effective hybrid model of customer service – one that blends clear product information with live or text chat help for self-directed customers interested in a human-focused insurance-buying experience.
Mr Balakrishnan said, “We are building outcome-oriented teams not only to collaborate across the organisation, but also engage with a range of ecosystem partners. This approach has enabled us to discard old business models and beliefs, and focus our entire business building differentiated value for the consumer.”
Fubon Life Insurance said, “In view of the general public’s lack of awareness of risk management of their own health and the lack of understanding when it comes to the concept of insurance, the company leverages three major themes of health, sports and tourism that are highly connected to the industry and lifestyle as the entry point to communicate the concept of health promotion in the digital environment, give clients more feedback on achievements and to establish interaction and stickiness.”
The dilemma of the insurers is summed up by Swiss Re CEO reinsurance Asia and regional president Asia Russell Higginbotham in an article Harnessing digitalisation for human impact published in October 2020.
He said, “In the rush to embrace technology, we can’t lose sight of the ultimate goal - to better serve customers and society as a whole. Every digital step we take should be designed for human impact and measured in terms of social outcomes. The first step in keeping digitalisation human-centred is to ensure it connects directly to customer needs.” A