Expanding options in insurance digital communications

Providing a rich set of insurance communications options is an important ingredient in improving customer experiences.

According to this contributor: Incorporating new communications into the overall digital transformation and improving the customer experience are admirable goals. But, to achieve those goals, it is critical to provide agents and policyholders with new capabilities.

The options for digital communications keep expanding. Insurer’s mobile interactions with prospects, producers and policyholders have become common, while methods like e-mail, web portals, and even fax are extensively used.

Plus, there is now a whole new world of messaging platforms, chatbots, business texting, voice assistants, and more. All of these methods are in widespread use in the world today, but not necessarily in insurance. It raises the questions: How do you determine which methods to employ, for which types of interactions, and for which constituents?

Battling slow adoption

These are important questions since many insurers have implemented various newer communication technologies only to find that the take-up was low. This was a painful discovery after significant effort and dollars were spent to develop and roll out the new digital communication option.

There is no magic answer to this dilemma, but the key to success lies in taking an outside-in approach.

Traditionally, it has been more common to design system capabilities from an inside-out approach — taking into consideration the organization, products, IT systems and channels to reach out to external parties. These are critical factors to be sure. But the better approach is to lead with an understanding of customer needs, customer journeys, and the value that customers place on specific capabilities. It is more than just asking customers what they want. Whether the party receiving the communication is a prospect, producer, policyholder or even an employee, it is best to gain a more thorough understanding of segments, relationships and needs.

Interests and objectives

During our recent Digital Communications Virtual Event Experience, SMA asked insurers about their interest and objectives for digital communications, with nine possible responses to the question. Overwhelmingly, the top two choices were:

That it is a vital part of the overall digital transformation strategy (83%), and;
That digital communications will help to improve the customer experience (75%).

Forty percent said reducing internal operational expenses was a key goal.

Surprisingly, expanding capabilities for policyholders was way down the list, and expanding agent capabilities was even lower.

Incorporating new communications into the overall digital transformation and improving the customer experience are admirable goals. But, to achieve those goals, it is critical to provide agents and policyholders with new capabilities.

Agent and customer needs

This doesn’t mean just throwing out a new option like a chatbot because others are doing it and it seems like a good idea. Decisions should be made in the context of an overall assessment of agent and customer needs. Insights from three lenses should be used to inform the decisions on specific technologies and use cases.

First, look at what interaction methods they are actually using today and throughout the life-cycle. This needs to be done in the context of each segment.

Second, do extensive research to determine what new modes they would value for various types of transactions and interactions.

And third, evaluate what others in the industry are doing — not just what capabilities they have released but what kind of success they have had (to the extent possible).

Finally, be sure to build in flexible configuration capabilities to enable individual users to customize their communication preferences. In the increasingly digital world, placing an emphasis on providing a rich set of communications options is an important ingredient in improving experiences, which leads to both top-line growth and profitability.

Specific Technologies Driving Insurtech Investment in 2024

Understanding the Funding Decline The decrease in funding does not necessarily spell trouble for the insurance sector but instead highlights a strategic shift, the report suggests. “The insurance industry, like many sectors, is focusing on the most promising ventures with substantial insurance potential,” the report explains. “Insurers are directing their investments toward key areas and current trends such as embedded insurance, employee benefits, and cyber risk management. This strategic investment approach signals a forward-looking mindset within the industry.” Three Key Insurtech Trends for 2024 The report identifies three major trends shaping insurtech investments in 2024: Public Insurtech Companies: Financial and Growth Strategies The report also notes that public insurtech companies are prioritizing revenue growth as their main goal. These firms are restructuring their financial strategies to boost cash flow and capitalize on rising revenue streams. Their growth prospects are supported by expanding asset portfolios and strong market demand. “Public insurtech companies are focusing on revenue growth and optimizing their financial frameworks to increase cash flow,” the report states. “The growth potential for these companies is driven by increasing revenue opportunities, broadening asset bases, and a robust market for their services.” In summary, while global insurtech funding saw a decline in 2023, the industry’s focus on GenAI, digital process management, and connected insurance technologies is setting the stage for a dynamic and forward-looking 2024.

Business

Insurer Secures Unanimous Supreme Court Victory in New York Choice of Law Dispute

In the world of sports, a clean sweep, a shutout, or a perfect game is the ultimate achievement. In the legal arena, a unanimous decision from the U.S. Supreme Court is equally rare and significant. In a notable legal triumph, Great Lakes Insurance SE achieved a unanimous 9-0 victory in the Supreme Court on February 21, 2024. This victory follows a protracted legal battle that began in the District Court of Pennsylvania, advanced to the U.S. Court of Appeals for the Third Circuit, and culminated in the Supreme Court’s decisive ruling. Background of the Case: Great Lakes Insurance SE v. Raiders Retreat Realty Company The heart of the dispute was the insurance contract’s clause selecting New York law to govern any future legal conflicts. Although the financial implications of this case were relatively minor compared to the broader marine insurance industry, the insurer’s determination to uphold a crucial maritime legal principle has significant long-term implications for marine insurance. Faced with the insured’s counterclaims—including allegations of breach of fiduciary duty, insurance bad faith, and violations of Pennsylvania’s Unfair Trade Practices Law—the insurer was confronted with serious risks. Such claims could lead to the shifting of attorney’s fees, treble damages, and more, which might normally encourage insurers to settle rather than risk pursuing justice. However, Great Lakes Insurance, supported by The Goldman Maritime Law Group, opted to challenge the Third Circuit’s decision and seek clarity from the Supreme Court. Supreme Court Ruling: A Landmark Decision In a landmark ruling, Justice Brett Kavanaugh affirmed that choice of law provisions in maritime contracts should be upheld by default. This ruling is a major victory for establishing a consistent federal standard in maritime law and avoiding a patchwork of state laws that could complicate marine insurance disputes. The Supreme Court’s decision overturned the Third Circuit’s earlier judgment, which had questioned whether Pennsylvania’s public policy concerns might override the insurance contract’s choice of New York law. By upholding the New York choice of law clause, the Supreme Court eliminated the extra-contractual bad faith claims under Pennsylvania law, thereby ensuring that the dispute could be resolved based on the merits of the insurance claim itself. Significance of the Supreme Court’s Decision This ruling represents a significant advancement in maritime law, affirming that choice of law clauses in maritime contracts are generally enforceable. The decision establishes a clear, uniform legal framework for resolving maritime contract disputes, which will streamline the process and ensure fair adjudication of future insurance claims. Justice Clarence Thomas’s concurring opinion was particularly notable for its criticism of the 1955 Wilburn Boat v. Fireman’s Fund Insurance decision, which had previously influenced maritime insurance law. Thomas argued that Wilburn Boat was incorrectly decided and stressed that a uniform and enforceable set of rules is essential for the development of maritime law. Impact on the Marine Insurance Industry The Supreme Court’s decision sets a “bright-line” rule affirming that choice of law clauses are valid unless there is a strong argument against the selected jurisdiction. By endorsing New York’s insurance laws as a reasonable choice, the ruling supports a more consistent and predictable legal environment for marine insurers. This decision represents a major step forward in maritime law, helping insurers better assess risks, determine premiums, and ensure fair and efficient resolution of maritime insurance disputes.

Expanding options in insurance digital communications