Ecosystem. We hear the term a lot these days. We know this to be a digital environment which encompasses all (or at least a lot) of the items we use or want in a particular genre of services. In some cases, we are talking about our music, games, and videos. In others, it’s social media.
However, I rarely hear about the insurance ecosystem. Why is that? Isn’t the customer experience in an insurance transaction at least as important as their experience with their apps, music, and videos?
I don’t think we hear about it because the insurance industry is still going through its technology renaissance and the product evolution and experience on a technical level hasn’t yet caught up. Too few insurance executives are thinking about the digital components of their products from a customer-centric viewpoint. Even fewer are thinking about how to leverage technology to nurture the customer relationship. This oversight needs to change.
So what does an ecosystem mean in the context of an insurance transaction? More importantly, what does a provider have to include in their offering to ensure a comprehensive array of services such that a prospective customer is compelled to become an actual customer – or a current customer is served so well that they don't want to look elsewhere?
And let’s not forget, the ecosystem can nurture the customer experience, the broker experience, and the carrier bottom line. If properly thought out and fully equipped - everyone can benefit.
I am not an expert in every component of the insurance transaction. I have made my career perfecting the billing component of the business, so I am going to speak about billing in the context of the insurance ecosystem.
Billing is usually near the end (or off to the side) of any diagram showing all components of the insurance ecosystem. Billing is usually not the most important consideration of the insurance sales process. But it should be. Billing is a significantly important part of the customer experience as well as a highly valuable information source.
Here are some things to consider:
- Flexible billing options can attract new customers and bind existing customers to you by providing a payment schedule that is best for them (think about how Apple can get millions of people to buy a $1,000 smartphone – it’s certainly not the price…it’s the payment plan!!)
- Cross-selling: The ecosystem should contribute to the welfare of the customer and the carrier. Customers often need a variety of insurance products. In the effort to sell a customer one product and close the deal an agent may forget to introduce other product offerings – thereby limiting wallet share, which could have been achieved at a lower acquisition cost. When billing your premiums, you have an ongoing dialog with your existing customer. Use your ecosystem to better serve your customers and your organization!
- Billing is a looking glass into the tendencies and behaviors of the customer and the broker. Knowing how often customers call or email with questions, when they pay, and how they pay can help you improve the customer experience and raise earned premium. Awareness of the broker’s involvement in the transaction can help you understand their needs more completely (are your digital communications helpful to the broker? Is your reporting clear and can the broker fully understand the performance of their book of business with you?). If you look into how customers and brokers use your service and listen to their feedback, you can make sure your environment always meets their needs – thereby creating a lasting relationship based upon open communication and trust.
- Billing systems that use big data can demonstrate product and broker performance. What products retain the most premium? Which brokers are responsible for the highest quality customers? What types of payment plans, product lines, and geographic areas demonstrate the fewest cancellations? Which channels of communication and what timing of those communications can improve payment histories? Using data properly can help improve product quality, reduce costs and increase earned premiums.
Self-Management Tools as a component of the ecosystem
Comprehensive self-management capability is a fundamental component of an ecosystem. Banks, online brokerage firms, video services, music streaming services and other retailers in virtually every industry are providing a smartphone app or a mobile website to their customers that includes extensive self-management tools.
With respect to billing, this means the ability to view account and policy information in summary and detail, make a payment, see historical notification activity, update information, change the medium of communications, chat with a service team member, etc…ALL of this is critical to the future of customer relationships. Everyone appears to know this, but most carriers and MGAs face an uphill battle in not only providing this but in keeping it modern, functional and intuitive.
Your ecosystem must include a well thought out and designed mobile component that provides the customer and the broker with the same ease of use that they have with many of their other core relationships.
We all want our customers to remain our customers. We all know that competition is fierce. We can only compete on price for so long and then someone else will drop the bar again. Well-thought-out-billing and the communications that go with it will enhance the insurance ecosystem and enrich the customer experience. It can also improve product performance and product sales.
Take the time to build a better environment for your customers (policyholders and brokers) - make your offering competitive, intuitive, useful and informational. Your customers will thank you with their loyalty.
Written By: Todd Greenbaum
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