Canadian P&C Insurers & Digital Transformation: The Wave of Change

2020 was a tumultuous year. North America was marked by civil unrest, a contested United States election and natural disasters; all under the specter of COVID-19. This tumult has driven the consumer to re-evaluate their property and casualty insurance needs and adjust their coverage accordingly. Cars are left parked in the garage. Small businesses are closed during lockdowns. People become caretakers when loved ones become ill or pass away. Throughout it all, they would benefit from interacting with a trusted partner virtually.

The industry had mixed results responding to the evolving needs and expectations of customers during 2020. Insurers with strong digital capabilities across the full customer journey have continued operations relatively unaffected, while others have had to scramble and set up patchwork solutions and workarounds.

Through this lens, we believe there are three focus areas for building operational resilience and enabling growth.

Traditionally, agents relied on physical interactions to generate leads. Whereas agents once met people at shopping malls, hockey rinks or perhaps school functions, COVID-19 disrupted traditional in-person lead generation activities.

Additionally, corporate marketing leads are often not shared in a timely manner with the right adviser.

A January 2020 survey revealed that almost 30 percent of agents believed their biggest challenge was lead generation, with nearly 60 percent of agents willing to pay 0.5 to 2 percent of their gross income for quality leads. At the same time, only 20 percent of agents have seen leads or the support to find new leads from insurance carriers.

These points of friction have a significant impact on conversion. Publicis Sapient's data indicates that effective prioritization and rapid response to leads yields over 10x improvement in conversion rates. Additionally, the top quartile of advisers have close rates that are 8x the bottom quartile.

Insurance companies can mitigate these challenges by managing the lead process with a structured platform. By providing useful content in a digitally accessible manner, insurers can begin attracting prospects to their virtual properties. The usage of Customer Data Platforms (CDP) – integrated with key data sources – can then capture lead information and enable the distribution of a relevant and compelling offer to the lead.

These leads can be routed through a tailored and personalized journey. Each step of the journey may be designed to build trust and refine the likelihood of purchase. Teams can set up triggers to help identify when a human agent could reassure the lead that they are making the right decision – by providing additional context and comfort.

Operationally, the solution platform can manage lead follow-ups and closures. Reminders or notifications to leads and agents as they progress through the journey. By providing relevant information on leads, agents can quickly improve their communication and capture feedback for follow-ups.

Independent agent satisfaction with insurance carriers is low. Carriers have wide-ranging experiences (simple to complex) for agents seeking product information or handling an application. In fact, the application process can take as much as 25 percent of the average agency’s productivity as per research from Applied Systems. This agent frustration and reticence can influence their carrier preference. Conversely, an agent that is highly satisfied with the insurer is more likely to place a greater number of products with that insurer.

Businesses can improve agent satisfaction by making business processes simpler, which can be accomplished a few different ways. Streamlining the agent identification and onboarding process using available data can remove one friction point. By providing product information in a simple, convenient and digital manner, the agent can rapidly validate fit for the customer without extensive digging and searching. Finally, a simplified quoting and binding process that accelerates the commission payout will help agents feel rewarded as they reach the moment of conversion.

Despite insurers revamping their claims solutions, there is still a prevalence of poor claimant experiences and laborious claims processes. Twenty-eight percent of P&C digital claims interactions fail on the first attempt due to claimant confusion and unfamiliarity with the digital claims solution. Additionally, many claims management processes are manual and paper-based (52 percent of claim disbursements are via paper cheque). This slow processing leads to other higher costs, including car rentals and storage fees.

By redefining the entire claims process with a focus on customer experience and automation, organizations can unlock significant savings. Processes with a simple digital-first orientation can reduce claimant confusion and ensure customers do not receive a fragmented experience. The claimant journey may be further enhanced through providing a guided claim journey to trusted service providers that can also help manage costs. Finally, enhancing claims processing with third-party data and automation for low-complexity submissions can reduce processing volumes by up to 80 percent, allowing human experts to focus on higher complexity claims for improved quality.

Publicis Sapient stands ready to help insurers navigate rapidly evolving expectations and build a digital foundation of success.