4 reasons why insurers must adapt to the omnichannel world

Life insurance has never been an industry associated with rich consumer experiences or even customer centricity. It has generally been believed that low-frequency interactions and routine communications (around policy renewals, for example) were enough to sustain customer relationships, meet regulatory requirements and service customers.

But, over time, the life insurance industry has come to realize that the expectations of its consumers are now shaped largely by the experiences offered by other industries, including some whose products or services are vastly different from insurance. Nowhere is this clearer than in omnichannel servicing, an approach first developed and mastered by the retail industry. This article is part one of a three part miniseries we will be running weekly in July.

See also: 21 emerging risks for the insurance industry and global economy

The omni-channel reality

Omnichannel servicing is about:

1. Providing customers with consistent information, tools and functionality regardless of touch point, channel or device.

2. More than just offering the traditional service channels, such as agents, call centers, self-service or assisted-service online.

3. Allowing customers to perform a variety of contextually aware transactions across channels — so that transactions may begin in one channel and end in another; and

4. Helping present customers with the right information at the right moment in time based on context and their preferences.

Because such capabilities are standard operating procedure in retail, banking, telecommunications and other industries, life insurers are just now viewing omnichannel as a business imperative.

Demographic changes are fueling the shift. Millennials represent the future of life insurance and they have grown up in a world that enables both purchasing and servicing to be done instantaneously and digitally through any channel or device. For them, this is the norm in interacting and transacting with all types of companies.

This evolving perspective is good news, in that omnichannel servicing can pay dividends in the form of stronger customer engagement and loyalty, increased process efficiency and lower costs. All of these benefits equate to a competitive advantage for early adopters within life insurance.

But the cloud within that silver lining must be acknowledged: life insurers face substantial challenges in modernizing their technology infrastructure, reworking processes and aligning the entire organization to operationalize the omnichannel vision. 

Extensive consumer research underscores the urgency for the life insurance industry, with multiple generations of policyholders now expecting greatly enhanced service. According to a 2014 survey from LIMRA, 78 percent of millennial consumers, 68 percent of Generation X consumers and 63 percent of baby boomers believe the integration of services across all channels is important (LIMRA, Pinpointing Preferences 2014). These majorities will only grow in the coming years.

The starting point: seamlessly shared information

Omnichannel servicing differs from multi-channel servicing. Multi-channel servicing focuses on the availability of multiple touch points to engage customers regardless of channel integration; omnichannel servicing, enabled by integrated data, allows a customer to seamlessly move across channels within the context of one or more transactions and receive consistent service. Customers expect to be recognized and remembered for all of their interactions, regardless of service channel.

For example, policyholders may raise queries on existing life policies through call centers or other available channels. If they follow up through a different service channel, the information regarding their account and transactions may be incomplete or unavailable, forcing them to repeat or re-enter information.

That is a limit of multi-channel servicing. In an omnichannel setting, all service touch points are current with customer and transactional information at all times. All data — from the initiation point to the query to historical interaction records — is available, providing the flexibility to service customers based on their preferences.

To realize the vision, business processes must be designed to retain the context of a transaction so that it may be continued later and, if necessary, through another channel. Both call center systems and customer portals must be populated with the same accurate, timely and consistent transactional information. This is the baseline for improving the experience overall by reducing the need for customers to repeat or re-enter information.