Technology has been a lifesaver during the COVID-19 pandemic as it kept individuals, societies, and economies connected to one another. Among population demographics, Southeast Asia’s youth, which technology already inculcated into their daily lives prior to the pandemic, have been further pushed to the digital forefront.
Companies, especially those selling products and services to the public, have been quick to follow the market and adopt digital practices, given that the world will never return to the old-fashioned way once the pandemic ends.
Revolutionising insurance practices
One industry running to remain abreast with young customers is insurance. Realising the sheer breadth of this youth target market, which includes millennials, insurers have begun inching away from legacy business practices to become more digital. And there cannot be a better time, as COVID-19 has made consumers realise the importance of insurance as a buffer against life’s uncertainties.
Aware of the digitalisation trend within the insurance industry, personal finance comparison site, MoneySmart, recently released the report “Bots Versus Bodies — Insurers in Singapore Can Do More To Provide The “Phygital” Experience That Customers Really Want” which explored the struggle insurers face in refitting legacy processes and products to conform with the contemporary customer. On one side, insurers feel the pressure to add digital channels that enable customers to self-serve, i.e. independently find the information on or purchase an insurance product. Yet, the complexity of insurance products means that the presence of real-life advisors remains crucial, with the report revealing that 91% of respondents asserted overall satisfaction when an advisor assisted the insurance purchase.
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So, where does the equilibrium of the “phygital” — or intertwining of the physical aspects of insurance, notably advisors, with the digital, such as insurtech — experience lie? A survey on customers of four types of insurance products, namely “car, critical, hospitalisation, and home contents” reveals that this equilibrium shifted alongside the scale of the perceived complexity of an insurance product and its purchase stage.
Car insurance, for example, is on the low end of the scale, meaning that customers find these products relatively straightforward to understand. Hence, car insurance will benefit from gaining greater availability of convenient, self-service digital channels. The research shows a strong preference for digital channels among car insurance customers.
Right from the beginning of their purchase journey, 80% of respondents said they used financial aggregators, notably MoneySmart’s car insurance page, as their source of information given the ease of obtaining what they need, including insurance quotes. As many as 52% of customers even chose to get their car insurance online, with 92% saying that they were satisfied with the online purchase process. With financial aggregators also offering online applications, it is not surprising that customers seek this streamlined experience.
Moving up the scale next is critical illness, followed by home content insurance. For the latter, the research makes it clear that there is more of a balanced need between bits and bodies. Customers strongly opt for self-serve channels to learn about the choices available in the market, with financial aggregators emerging as the top pick again at 88%. A benefit of financial aggregators such as MoneySmart’s home insurance listings is not only the consolidated information in one spot, but also the special offers insurers dispense for online buyers. Yet, 83% of respondents would rather make claims through an advisor given the complexity of the process.
The scale ends with hospitalisation insurance in which customers found the assistance of knowledgeable advisors deeply reassuring even during the shopping process given the importance and complexity of these products.
Maximising the best of both worlds
With regards to purchasing stages, customers overall turned to digital channels to gather initial information on insurance, with 73% visiting online financial aggregators. Yet, during the complex claims process, 65% of customers chose to submit paperwork via advisors to secure a successful outcome.
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However, a closer look at each stage shows that “bots” and “bodies” have a mix of roles in every stage. In the purchase planning stage, customers researched insurance products by visiting websites and discussing them with family or friends. Then, in the shopping around for the best product stage, customers start heading to advisors and websites that they believe would give unbiased insights. Next is the actual buying of the insurance product stage where, despite an even split between customers purchasing online and via an advisor, those who chose the latter reported higher satisfaction. In the last stage, which is making claims on the policy stage, customers overwhelmingly preferred advisors who could walk them through the complex procedures, thereby minimising errors.
However, despite the importance of a cohesive “phygital” journey, the report pointed out experiential gaps, whereby one of them appears early on in the consumer journey. Digital channels intended to facilitate the pre-purchase stage often lacked the simplicity to address customer queries, such as on premiums and coverages, in a straightforward language that customers would instantly comprehend. As a result, customers go back to looking for advisors who can personalise the explanation.
Bridging the gap with MoneySmart
MoneySmart shares a number of recommendations for insurers wanting to plug the gaps. First, to solve the lack of simplicity of digital touchpoints, insurers must craft content that speaks with clarity to a wider segment of the audience. Insurers can experiment with embedding bot algorithms that enhance the understanding of questions whilst extensively utilising templated answers. And with customers becoming more comfortable with video conferencing, on-demand video calls with advisors can give customers the exact answer needed.
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With the pre-purchase digital touchpoint solidly serving customers, it is now time to turn eyes to the next stage, which is catering to customers of insurance products with advanced complexity. This class of customers crave a concierge experience in which advisors cater to the entire process of selecting policies, compiling documents, as well as processing and submitting claims. MoneySmart proposes improving interactions by offering seamless omnichannel touchpoints that blend the best of both bots and bodies, encompassing tailored digital content that provides comprehensive pre-purchase information, on-demand access to advisors through all platforms, and an efficient online application process.
The success of insurers in finding the perfect equilibrium for the products will ultimately lead to a stronger industry that knows exactly how to give customers the personalised experience that they want — “bots” that get the job done and “bodies” that help them get through it.
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Photo by Kampus Production from Pexels
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This article is produced by the e27 team, sponsored by MoneySmart
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