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Innovating the Insurance Customer Experience

By:  Zoe Zhou

There is a common high-level customer journey for insurance customers. The customer researches providers and policy options. Once a preferred provider and policy are decided, the customer applies for the policy. If they are approved the policy is issued. If they have a claim, they fill out the relevant paperwork and the claim is adjudicated. When the policy is up for renewal, a renewal decision is made. 

While at a high-level, a similar path applies to most customers, customers have different requirements at different stages of their individual journey. Developing a customer-centric view and adopting an innovative approach to delivering a next best offer (NBO) or next best action (NBA) is extremely valuable in terms of increasing customer lifetime value and retaining profitable customers.

Here at Decision Management Solutions we’ve helped insurance carriers in the US and Asia develop innovative approaches to developing and delivering NBO/NBA initiatives. One of the biggest challenges for insurance carriers is that unlike for example, a financial services company, most of a carrier’s customer interactions are limited to an initial policy purchase, handling a claim, and policy renewal. Therefore, carriers need to make the most of each interaction and be more strategic about each customer engagement or offer. This includes integrating the right offers to cross-sell, upgrade, and retain a relationship to its fullest value.

Not only is this challenging for carriers because of the relatively limited number of interactions they have with each customer, but the carrier must also take into account managing these engagements across hundreds or even thousands of agents. The carrier must coordinate these offers, make them easily accessible to agents, and ensure that customers are only presented offers for which they are eligible.

Carriers know that leveraging customer data and predictive analytics at the individual customer level is the best way to accomplish these goals of driving revenue, building loyalty, and increasing customer retention. Adding decision automation alsodramatically reduces marketing and operations expenses by automatically matching customers to those offers they are most likely to accept and renew. 

However, integrating these capabilities into a complex operating environment can be challenging for many carriers. Using data, business rules, predictive analytics, and decision automation adds value across the customer journey:

  1. New leads are assigned to the available financial consultant/agent best suited for timely follow-up.
  2. At the time of initial policy purchase, the NBO/NBA solution presents the financial consultant/agent the most appropriate cross-sell or upsell offer.
  3. During the policy period, behavioral or event-based triggers alert the financial consultant/agent to reach out to the customer with a relevant cross-sell or upsell offer, such as adding a beneficiary to an existing life insurance policy upon marriage or birth of a child.
  4. Just as important in the customer engagement journey are relationship building non-sales touchpoints, such as delivering relevant information and other content. Perhaps sending a customer service survey to help you collect updated or new data about the customer and their family or business.
  5. Approaching policy renewal, the NBO/NBA solution presents the financial consultant/agent the most appropriate offers and activities to help ensure renewal.

The NBO/NBA solution can be integrated across all touchpoints in the customer journey. The solution identifies the next best offer (or action) for each individual customer, based on their propensity to accept the offer and deliver the additional premium to the carrier year after year.

The key design principles for this type of solution include:

  • Designing a decision model that can be called from any touchpoint or distribution channel. A decision model is the backbone of any decision automation initiative. It is the framework for identifying, organizing, and managing the logic used to make a business decision. In the case of NBO/NBA, the goal of the decision model is to effectively match each customer with the next best offer/action for which they are eligible, likely to accept, drive new revenue, and renew.
  • The solution can be deployed to handle offers and actions both in real-time and in batch.
  • The solution uses customer data, business rules, and predictive analytics to determines the next best action for the individual customer at the particular point of time, using a particular communication method, distribution channel, etc.
  • The next best action does not need to be a product offer, but can also be a survey, event invite, data collection mechanism, etc.

As a result, insurance carriers can expect to see an increase in both offer acceptance and relationship profitability. This process automation also improves the ROI on marketing programs. Finally, financial consultants/agents are typically thrilled to have more targeted, relevant offers to make to their clients.