People who buy gasoline generally don’t care for the product or enjoy the experience of pumping gas: They just want to drive.
Chris Colborn, chief experience officer for the Lippincott creative consulting firm, opened with that analogy during a keynote presentation at the InsureTech Connect conference. He said the insurance industry should be in its heyday with rising perils such as global warming and cyber risks, but the industry needs to understand what business it’s in.
“No one wants a quarter-inch drill bit,” he said. “They want a quarter-inch hole.”
Colborn said a French tire manufacturer recognized how to build demand for an experience as a means of selling a product in 1900 and launched the Michelin Guides to rate restaurants in the Paris area. There were only 3,000 motor cars in all of France at the time. He said the insurance industry needs to think in the same manner about what customers want when they purchase a policy. He said by its very nature, the product of insurance creates a disincentive to buy: From the customer’s point of view, it’s a no-win situation. Only the insurance carrier wins if no claim if filed.
Technology holds the means for insurers to connect with customers and meet their needs, Colburn said. He noted how a U.K. homeowners insurer, Neos, markets itself as a smart home product provider: It doesn’t just promise to pay for repairs, it prevents damage by installing sensors to detect water leaks or fires. Similarly, there are life insurance products on the market that award policyholders “mindfulness points” if they take steps to protect their health.
“The goal here is to align your interests very closely with your customers,” Colburn said.
Glenn Shapiro, president of personal lines for Allstate Insurance, said his company is working toward that goal but insurers in general have a long way to go.
Shapiro recalled that when he started in the industry in 1990, it took five to seven days to adjust an auto claim, and adjusters could complete no more than four or five in a day. Nearly three decades later, that hasn’t changed.
“We really haven’t been disrupted,” he said. “We’ve been stationary relative to the industries that are around us.”
Shapiro pointed to the banking industry, which has been able to reduce the number of teller positions by allowing customers to perform transactions themselves. Consumers are anxious to make their own account transfers, deposit checks and withdraw money using technology and don’t miss waiting at the teller’s counter.
Insurers can also let their customers do some of the work, Shapiro said. With current technology, customers can file claims by snapping photos on smart phones. Machine learning has taught computer programs how to recognize whether a car is a total loss. If it’s a damage claim, the same smart phone photos can be used to build an estimate. Shapiro said similar opportunities are available in the homeowners line. Anyone who has perused a real estate website knows detailed data is available. That’s the same kind of data underwriters use to assess risk and price policies.
“The data is there to price every home in America without asking a single question,” Shapiro said.
The Insuretech Conference drew 7,000 attendees to the MGM Grand Conference Center, organizers said. That provided opportunity for tech vendors to demonstrate how technology can help insurers cut costs and better serve customers.
Among them was Salesforce, a provider of customer relations management software. After Shapiro spoke, the company announced the launch of an extension of its Financial Services Cloud designed for the insurance industry.
Eran Agrios, a marketing executive with the company, demonstrated how the Salesforce platform can guide a policyholder who suffers a minor accident through the claim process on her smart phone. A chat bot handles the first few questions and confirms all the customer data needed. The same software directs the customer to take photos with her cell phone, which then generates an estimate.
A similar system within the Salesforce Financial Services Cloud connects a carrier’s agency manager with an agent for a refresher on cyber insurance. Salesforce said in a press release that several carriers, including Pacific Life, Tokio Marine & Nichido Fire Insurance Co. and Amica Mutual Insurance Co., are using its Financial Services Cloud to interact with customers. Its insurance capabilities are available today and start at $150 per user per month, the company said.
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