Conventional wisdom suggests that making your customers work to buy something is a recipe for losing business. After all, the history of the rise and fall of the dot-com era is punctuated with cautionary tales of businesses that used technology to shift operating costs onto customers.
Add to that the fact that most consumers view insurance as a necessary evil and its easy to see why so many early attempts at online insurance sales failed. So, how will the insurance industry shift some of the “work” and its associated expenses to customers?
We already have two factors working against us: (1) the technology needed to enable “click-to-close” in a multi-carrier environment isnt available yet, and (2) insurance buying is too complex to expect customers to change their buying behavior overnight.
SEMCI (Single Entry Multiple-Company Interface) will have the most impact on how technology will disseminate the front-end administrative burden among carrier, agent and customer in order to reduce expenses while improving speed and accuracy. SEMCI will make it possible for trusted advisors (agents, banks, accountants) or, in the case of a portal environment, customers to fill out a single application and submit it to multiple carriers without modifying it for each individual carrier.
To the customer, SEMCI is available today, in that they can fill out a single application and get multiple quotes from a backroom care center. This is a practical first step in delivering SEMCIone that may not reduce costs but still teaches customers and trusted advisors new behaviors. When the connections to the carriers are finally built, margins and accuracy will improve.
The best potential for expense reduction today is customer “self-help” on the back-end, and this technology will be available soon. So rather than sit back and wait for SEMCI, it makes much more sense to put efficient manual processes in place for front-end services and combine them with the back-end technology. Then it just becomes a matter of “flipping the switch” from the manual process to the automated one.
At the same time, youre keeping a close watch on customer buying behavior and coaxing trusted advisors and customers toward the technology as its being turned on. For example, you start with something thats relatively simple to do online, such as obtaining auto ID cards or certificates of insurance. Then when SEMCI becomes a reality, youre a few steps closer to asking them to research, query and self-serve online.
You may lose a small percentage of customers who want to cling to the old ways, but the lost business will be more than offset by reduced expenses and the additional “new age” customers who will be attracted to your faster and more efficient service.
But even in cases where were using end-to-end automation, buying behavior isnt changing all that radically. Whether the user is a customer in a portal environment or an agent venturing into a new market, a well-staffed care center supplying knowledgeable and encouraging “real person” support is a necessity. The care center becomes your catalyst for gradually changing the behavior of the customer.
Care center expenses are higher at first, as you must hire top quality people to help “train” trusted advisors and customers to use the technology. But the cost of maintaining a care center will decrease as customers become more adept at using the technology. And by making the care center “virtual,” you can reduce expenses right from the beginning.
A care center helps you shift behavior at the right time and be more pragmatic about how you introduce technology. A new class of Internet insurance providers”online agency enablers” (OAEs)has emerged that builds its platform on a combination of technology and human service. The goal is not to simply automate processes, but to provide a Web-based platform that enables carriers and trusted advisors to add value and to shift cost only where its appropriate.
OAEs have distribution relationships with multiple carriers and therefore offer trusted advisors a broad selection of products in multiple markets. Instead of spending hours completing and routing paperwork, trusted advisors fill their time counseling customers on making the best purchase and selling a wider range of products to each customer. If the trusted advisor is not skilled in a particular product, the care center agents can coach the customer and make the sale. In this way, Web technology enables trusted advisors to focus on bolstering buyers confidence and satisfaction.
Considering how much of the insurance sales and service process involves the transferring of information from customer to carrier and back, its easy to see where Web technology will help carriers and trusted advisors save time and resourcesand therefore expenseas customers share in activities. The problem is its easy for customers to see this too. When carriers and trusted advisors fail to translate some of their savings into better service or reduced cost, customers perceive no value in their Internet labors.
Confidence and satisfaction equal assurance, and assurance is the heart of the insurance business. Carriers and trusted advisors work to provide assurance, and customers dont mind doing a little work to receive it. Using the Internet, OAEs are in position to facilitate this relationship, perhaps better than any other players in the marketplace. To tap this potential, what our industry must realize is that working on the Web isnt a threat to carriers, trusted advisors or customers. Its great opportunity for us all.
is President and CEO of Financial Keyosk, a Web-based platform for insurance and financial services, based in Carpentersville, Ill. He can be reached at firstname.lastname@example.org.
Reproduced from National Underwriter Life & Health/Financial Services Edition, January 28, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.