BJSS proudly co-partnered Arena International’s Digital Transformation in Insurance conference, a two-day event that ran from the 25th to 26th May 2022 and featured a strong range of speakers from a mix of traditional insurers, insurtechs and technology solution providers. 

From all the sessions I attended, there were several themes that came across as being top of mind for the industry. In this article, I will summarise these main themes, key takeaways and what the implications are for the insurance industry. 

1. top priority is to understand your customer as an individual

Almost every session I attended left a key takeaway to really focus on understanding the customer's individual needs and wants. Building a single, 360-degree customer profile is now possible with data and analytics technology, particularly improved data capture capabilities from sources ranging from third parties to Internet of Things (IoT) devices. This deep understanding of the customer and their context then acts as the focal point to drive actions across the entire organisation. 

Understanding the customer has many facets to it and is something that should be done continuously across the lifetime of the relationship with the insurer. This deep understanding helps identify target markets, develop relevant products, reach audiences through the marketing and social channels they use, help customers understand and manage their risk, and deliver great customer service. 

Defining a target market and developing the product that fits that market starts with understanding customer needs, pain points and how to make their lives better. Tapoly, for example, has focussed on understanding small business customers and creating flexible, on-demand commercial liability insurance that suits the needs of the gig economy. 

Knowing where and how customers like to interact over social channels is also important to get to your target market. For example, Arma Karma talked about how it reaches its Gen Z target market, making extensive use of TikTok videos to market its product in a way that resonates with this age group. Arma Karma also hires a good proportion of Gen Z employees so that the company is representative of its target market and has an implicit understanding of that group. 

Once a policy is sold, the need to know the customer continues. Two additional areas highlighted as important are helping customers understand and manage their own risk and ensuring that they can interact with insurers over preferred channels. 

Helping customers understand and lower their risks has many benefits: it improves customer satisfaction, creates opportunities to interact, and lowers claims. Telematics was used as an example of this, particularly in making young drivers more insurable rather than addressing a broad market segment. Another good example is Vitality Health's use of smartwatches to both monitor customers' health activity and incentivise good behaviours. 

When interacting with customers, it is also important to understand the channels they want to use in order to provide them with options that align with their preferences, and to balance human and machine interaction. This includes understanding which activities customers prefer to do via self-service and for others ensuring customer service representatives are armed with enough information and can deal with situations that require empathy, such as interactions like First Notice of Loss (FNOL). 

Building a knowledge base with intelligent search was discussed by eGain as a way to harness this customer knowledge and make it available and accessible. 

2. technology is driving improved customer experience

Understanding the customer and their context is critical, but successfully using that understanding to inform the customer experience will ultimately drive acquisition, retention and high NPS scores. Insurers are looking to build more opportunities to provide customers with good experiences and create stickiness, rather than interacting only at the time of policy purchase and renewal or claim. 

Thinking ambitiously about the customer experience was a common theme at the conference. Simply Business introduced an interesting thought experiment by encouraging people to think past a 5-star experience to an 11-star experience and then bring it back to 7-stars. Stretching one’s thinking like this drives innovation and makes ambitious goals feel more achievable. 

Technology is clearly playing a key role in customer experience advancements. Self-service digital capabilities have advanced in areas such as policy purchase, policy administration, and claims process. Insurers like Covea have used analytics to look at inbound call volume, identify the biggest reasons behind the calls, and develop tools to enable customers to self-serve, which increases efficiency and enables call centre staff to focus on more complex needs. However, Gartner tells us that 90% of customer self-service journeys are abandoned, so there is clearly a lot of work still to be done. 

Self-service capabilities can be supplemented by automated virtual assistants driven by data and advanced analytics. For example, virtual customer assistants are being deployed to deal with low complexity, high volume needs and inquiries. Data analysis can also be used to identify value-added services that can have customer and business benefit, for example, ManyPets provide video vet calls that have improved customer satisfaction and lowered loss ratios by reducing physical vet visits. The human factor shouldn't be ignored however and, as stated in the last section, it’s important to understand and deliver on customers' interaction preferences. 

Shifting from insuring risk to helping customers understand and manage their own risk is a big customer experience win. It creates a new bond of trust, with an incentive on both sides to reduce risk through changing behaviours. It also creates the opportunity for more interactions that are helpful rather than sales oriented. For example, we heard from Covea that in their motor business they have developed tools to provide customers with data about high-risk parking zones so they can avoid them, therefore lowering their risk and improving loss ratios. Floodflash also told us how their parametric flood insurance and near-instant payouts have led to excellent NPS scores. 

There was also a discussion on how to deliver a customer experience transformation programme, with a number of speakers talking about the need for iterative development and ongoing optimisation of the experience. It can be improved gradually, but customer needs and demands are also ever changing, so a data-driven process is key. 

3. Happy agents and employees mean happy customers

Closely linked to the customer experience is agent and employee experience. It is good for business to ensure agents can smoothly do business with you and your potential customers, that they have the right information and tools to be able to transact efficiently. Forrester survey data showed that the top two customer experience pain points are experienced when agents don’t know the answer to a question (34%) or different agents give different answers (41%).  

Likewise, employees with all the training and tools to do their jobs will be more productive. Ultimately, a happy state of mind for any customer facing role will lead to a better customer experience. A Gartner statistic that 84% of contact agents complain that their tools are not helpful in resolving customer queries is strong evidence that more needs to be done here. 

Technology can free up and empower employees to have more satisfying and meaningful interactions with customers. A customer knowledge base provides an understanding of the customer situation and context, and automation tools like virtual assistants can take care of the routine and mundane interactions. 

Creating the right workplace culture and understanding the needs of Gen Z employees was a key area discussed by Arma Karma, stressing the importance of treating employees as individuals and understanding their different needs and motivations. 

The conversations also ventured into creating the right culture, not only for happy and motivated staff, but also within the wider context of data transformation. Insurers are becoming more customer-centric and real-time, driven by data and analytics technologies. But this also requires a shift in culture and mindset along with technology solutions. 

4. innovative uses of AI/ML are on the increase, but challenges remain

We heard lots of examples of successful use of AI/ML to drive improved customer experience and operational excellence, showing that the industry continues to mature in this area. 

Swiss Re talked about the use of behavioural science in understanding customer behaviours and goals, highlighting its work enhancing customer profiles to improve pricing and underwriting decisions. 

Improvements to customer service have been seen as a new, improved generation of chatbot technology has utilised conversational AI to learn how to interact with customers more naturally and eliminate bias. The ability to take data from the edge to perform real-time analysis also has many uses such as early warning of hazards that can cause issues such as flooding. 

When it comes to claims, we heard about advances in trends analysis for fraud detection and other interesting use cases, such as the use of AI to help determine fault in car accidents, which reduces the number of cases that require investigation and hence the claims handling costs whilst improving customer satisfactions and NPS. 

CausaLens put forward the case and solution for causal AI, focussing on identifying the true cause-and-effect relationships in data to enable a much better understanding of behaviour. This was contrasted with traditional methods, which can throw up spurious correlations.  

In developing and maturing AI/ML, the importance of running experiments, setting goals, and delivering in rapid learn and iterate cycles was emphasised. However, challenges remain and the speakers on a panel discussion highlighted skills and knowledge gaps, difficulty in getting the right data, understanding when you need empathy, and gaining a true understanding of customer intentions amongst the largest. 

5. legacy technology is a big impediment to change, but can be overcome

In the context of delivering the changes described above to achieve advances in customer, employee and agent experience driven by data and advanced analytics, legacy technology was highlighted as one of the big impediments. 

Legacy systems tend to be slow and brittle to change. They are generally centralised and monolithic. They don’t have open architectures and are built largely around a batch mode of interaction. This makes it much more difficult to extract and leverage data, adopt standards, and achieve real-time interactions. 

Covea talked about its journey and strategy to move to a decentralised model to enable improved customer-centricity and business agility. The business adopted a domain-driven approach to model business and customer domains and events and built a cloud-based microservice and event-based architecture. 

Transformation involves many interim states of change as new capabilities are built while existing legacy systems still operate and run the business. To enable the old and new to coexist, Covea built a bridge across the two that allowed data and requests to be routed between existing systems and new services. 

Generali UK also spoke about the six-year transformation journey it is on and the importance of areas like data management and integration as technology enablers, as well as the importance of ensuring business stability during each interim stage of change.  

The importance of Open Standards was also emphasised, as was the great work being done by OPIN (the Open Insurance community). Creating an open architecture driven by open API standards enables both legacy transformation and wider ecosystem integration. 

6. blockchain is still a solution without a problem in insurance

And finally, blockchain. It was interesting to see blockchain as a prominent topic on numerous panel agendas, but the conversations were very hypothetical, with nothing tangible in terms of use cases or even experiments that were going on. 

The possibility of being able to share and manage data on a distributed ledger was mentioned as interesting, and the application in immutably tracking the movements of cargoes along with transparency advantages were raised. It was also speculated as to what possible new insurance offerings may be needed in a decentralised finance world. 

It was, however, acknowledged by almost everyone who spoke about it that blockchain has not really gained any traction in insurance in terms of interest or use cases. It needs more time, so maybe this is one for next year. 

Conclusion

The themes that came out at the conference resonate with the work we at BJSS are doing with our insurance clients. BJSS offers a full range of data services and we are supporting clients to improve data management, governance and insights through building cloud-native data and analytics platforms.  

The BJSS design team are experts in customer research and using human-centred design to develop compelling customer and employee experiences. Finally, our engineering and delivery teams are supporting our clients to transition from legacy architectures and systems into real-time service-based open architectures.  

In the BJSS White Paper, Accelerating Insurance Digital Transformation, we discuss Insurtech partnerships as one of three priorities that insurers must consider when meeting the challenges facing the insurance industry. 

To learn more about all three priorities in detail, including what they look like in practice, you can download the white paper here.