Pushing beyond apps

It struck me while I was driving this morning: First-gen mobile apps are fine, but virtually everyone is missing high-volume opportunities to engage with their customers.

Allow me to back up a step. I was stuck in traffic. Not surprisingly, that gave me some time to ponder my driving experience. I found myself thinking: Why can’t I give my car’s navigation system deep personalizations to help it think the way I do? And how do I get around its singular focus on getting from Point A to Point B?

I explored the system while at a red light. It had jammed me onto yet another “Fastest Route,” disguised as a parking lot. My tweaks to the system didn’t seem to help.

I decided what I’d really like is a Creativity slider so I could tell my nav how far out there to be in determining my route. Suburban side streets, public transportation, going north to eventually head south, and even well-connected parking lots are all nominally on the table when I’m at the helm. So why can’t I tell my nav to think like me?

I’d also like a more personal, periodic verbal update on my likely arrival time, which over the course of my trip this morning went from 38 minutes to almost twice that due to traffic.

The time element is important, of course. But maybe my nav system should sense when I’m agitated (a combination of wearables and telematics would be a strong indicator) and do something to keep me from going off the deep end. Jokes? Soothing music? Directions to highly-rated nearby bakeries? Words of serenity? More configurability is required, obviously, or some really clever automated customization.

Then an even more radical thought struck. Why couldn’t my nav help me navigate not only my trip but my morning as well? “Mr. Weber, you will be in heavy traffic for the next 20 minutes. Shall I read through your unopened emails for you while you wait?” Or, “Your calendar indicates that you have an appointment before your anticipated arrival time. Shall I email the participants to let them know you’re running late?” Or (perhaps if I’m not that agitated), “While you have a few minutes would you like to check your bank balances, or talk to someone about your auto insurance renewal which is due in 10 days?”

What I’m describing here is a level of engagement between me and my mobile devices which is difficult to foster, for both technical and psychological reasons. And it doesn’t work if a nav system is simply a nav system that doesn’t have contextual information about the user. But imagine the benefits if the navigation company, a financial institution, and other consumer-focused firms thought through the consumer experience more holistically. By sensibly injecting themselves into consumers’ daily routines—even when those routines are stressful—companies will have a powerful connection to their customers that will be almost impossible to dislodge. Firms like Google have started down this path, but financial institutions need to push their way into the conversation as well.

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You Ought to Be In Pictures – Policy Information Delivered by Video??!!

An article posted by Reuters pointed out that this week, YouTube celebrates its 10^th anniversary and Facebook reported that there are now 4 billion videos viewed on its site every day (up from 1 billion in September http://ift.tt/1biK5X2 ).

These facts reminded me of our 2015 Celent Model Insurer case study about Security First Insurance (see Celent Model Insurer 2015: Case Studies of Effective Technology Use in Insurance ). Realizing that their insureds do not read their policies and often do not understand what to do in case of a loss, the company offers personalized insurance videos as a service to policyholders. They are sent to new homeowners insurance (HO3) policyholders to help them better understand their insurance coverage and the steps to take if they need to file a claim. A data file is passed from First Security to a video production vendor. This information allows the video system to customize and determine the appropriate segments based on the specific coverage and location information for each policy.

To date, 75% of the customers who open the invitation email watched the video. Approximately 35% view it to the end (nearly eight minutes of content). Compare this to the number who read the policy (probably zero per cent?)

The demand for information in video content will push insurers to make video an integral part of their customer communication and content management approach. It is good to see Security First Insurance leading the way.

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The First Step of Customer Experience Transformation

The easiest way to grow your book of business is to keep your customers happy. Retention goes up, cross sell goes up, and you will get referrals. This isn’t a big revelation. Carriers know this. The key to keeping customers happy is to create a top-notch customer experience.
But insurance is complex. Consumers have a greater number of choices today than ever before and consumers are accessing carriers through more channels than were ever available in the past. This complicates the picture at the same time that expectations are increasing. Customers expect that the carrier knows the details of every prior interaction they have had. That is hard to do when customer data is fragmented across multiple systems.

Customer experience includes many facets – advertising, the acquisition process, claims and of course, the quality of customer care. Carriers are looking for tools to help them provide a superior customer experience regardless of the channel the customer chooses to use at the time. That is probably why we are seeing a huge increase in the interest in Customer Relationship Management tools especially by small and midsize carriers who haven’t invested in this type of software before.
Customer relationship management systems are one of the components in many insurers’ application maps. Although CRM solutions are not unique to the insurance industry like policy administration or claims systems, they are still key technologies used to manage relationships with customers, whether customers are defined as agents/distributors, claimants, end policyholders, or prospects.
There are literally hundreds of CRM solutions available today from firms large and small, well-known and obscure. I’ve just published a report focused on enterprise solutions for larger-scale organizations similar to most US insurance firms. The report does not include CRM solutions that are appropriate for small organizations such as independent agencies or advisors. It also does not address horizontal solutions that are not specifically targeting the insurance industry with tailored capabilities.
There are a wide range of CRM solutions on the market for insurers to choose from. A wide range of features and functionality are available. These systems are used in various capabilities within insurance carriers — from producer management, to call center support, to managing leads and campaigns. Integration with other systems will be needed to provide the most value to a carrier.
There is no single best CRM solution for all insurers. There are a number of good choices for an insurer with almost any set of requirements. The right solution for a carrier depends on how the carrier plans to use the solution. Some carriers use CRM solutions as a front end to all the core applications. It is the entry point for a call center representative to access all data for those who are calling. Other carriers use CRM solutions to manage interactions with the distribution channel. Still others use it primarily to manage outbound marketing campaigns and may extend this capability to the external distributors.
System selection also may be driven by how the carrier defines “customer.” Some carriers define the customer as their agency or broker-dealer firms. Others define the customer as the final purchasers of the insurance policies and annuities. Some solutions may be better at handling some business models than others (e.g., 20 million end user clients vs. 200 agencies), though most would claim to be able to handle all levels of “customers.” Therefore, the ability to build and maintain appropriate hierarchies (agency or broker-dealer, agent or advisor, household or individual) within CRM solutions is an important aspect to examine.
An insurer seeking a new CRM solution should begin the process by looking inward. Every insurer has its own unique mix of distribution channels, geography, staff capabilities, business objectives, and financial resources. This unique combination, along with the organization’s risk appetite, will influence the list of vendors for consideration.
Some vendors are a better fit for an insurance company with a large IT group that is deeply proficient with the most modern platforms and tools. Other vendors are a better fit for an insurance company that has a small IT group and wants a vendor to take a leading role in maintaining and supporting its applications.
We recommend that insurers that are looking for a CRM system create narrow their choices by focusing on four areas:
• The functionality needed and available out of the box for the way the carrier plans to use the system and the customer types desired. Check to see what is actually in production.
• The technology — both the overall architecture and the configuration tools and environment.
• The vendor stability, knowledge, and investment in the solution.
• Implementation and support capabilities and experience.

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The best Policy Administration system I have ever seen

Those that know me well know that I am a generally upbeat guy, but can also be piercing in my analysis of technology. This is something that the vendors with which we work expect — absolute honesty in reviewing their systems and technology. They don’t always like my position, but they’ll hear it.

Our insurer clients expect the same, as they are often betting their company on vendor technology.

So let’s just say I rarely gush over a system. I can usually find a pretty major flaw at least in the presentation of the system.

Today I had the opportunity to see a system that was new to me. This is a part of a research report that our team is writing and we are seeing a number of demonstrations. They’re short — just an hour — and scripted to cover some pretty focused areas.

Some of the vendors have nice technology, but really struggled with the hour limitation.

Other vendors manage quite nicely within the hour, but don’t excite me with what they showed.

A demonstration I saw today managed to do both — they managed the demonstration into the time flawlessly and, more importantly, I was just blown away by the system.

There are some fundamentals that we review. Among these are:

Configuration

This is the heart of any system. Many systems are very configurable, but most of them that I have seen are so clunky, or confusing, that configuring them is a chore. They may be advertised as configurable by the end-user, but not any end-user I have ever met.

The system today was incredibly flexible, but they configuration was done in such a way that it expressed the business need to the user in their own terms. There was a lot to configure, but everything was easily reuseable. Even better, it handled the complex chores like multi-language and multi-currency simply, even in the same transaction.

Contact/Customer management

Many systems try to aggregate people, but this system treated every relationship as a powerful contact. Providers, agents, insureds and  companies are managed in a powerful CRM and the information maintained seamlessly changed depending on the relationship.

User experience

So many systems we view look like they screens were designed by a programmer and, worse, could only be used by a programmer. I saw a system recently that was powerfully configurable, but almost indecipherable to use. This system has an easily understandable UI, complete with integrated workflow and management of attachments to any contact. Better yet, it is all HTML5 and seamlessly adapts to mobile devices, particularly tablets.

Reporting

Have you ever dreamed of a system where the end-user could easily pull information out of the system? This is that system. The query tool was simple, but powerful and the entire user experience revolved around personalized dashboards. I can’t comment on whether it can scale with this power, but it was very impressive.

I’ll leave it there, as I could go on, but my colleague and I were both very impressed. The one area for improvement is the cloud — the current release does not run in a major public cloud, but they indicated this is on their roadmap.

I’ll finish with one observation — I’d buy this system for my company. I don’t have a stronger compliment.

If you’re reading this, and you’re with a vendor, and I didn’t see your demo today, well, you have a fierce competitor.

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P2P Economy and the Uberization of Insurance

We are getting used to the sharing economy to an extent where the term uberization is becoming part of our vocabulary to refer to the effect of disruption in a given industry by some sort of peer to peer business model, which seems to defy the rules by which incumbents compete.

In the essence of this shared economy, motorized by peers connecting directly between them, is the concept of disintermediation.

Disintermediation in news: Twitter. Disintermediation in travel: Uber and Airbnb. In the financial services industry there are plenty of cases around lending and crowd-founding, leaving banks wondering if they have to (or will) participate.

Under this concept any industry where intermediation is heavily present should be looking into its next Uber…

Insurance is no exception. Insurance is about risk sharing, so what better model to bring in technology and make that risk sharing as efficient and effective as possible?

Insurance started in many cases by peers getting together to offset the consequences of a loss. This reminds me the story, told to me by an old friend, about how underwriting was born at Lloyds bar in England when captains started betting against their own ships to cover the potential loss of their cargo and vessel. The bookie would take note of the bets entering them one beneath the other on the chalkboard, hence the term underwriter was born. I hope my friends underwriters, whom I have just assimilated to bookies, continue to talk to me after reading this.

Mutuals were created with this same concept of peer risk sharing. Risk management in the base of the pyramid has been found to follow the same scheme.

More recently a German broker introduced the concept using the power of social networks and group risk sharing: Friendsurance. By the way great case study by Mike Fitzgerald: http://ift.tt/1PILXrn.

In Colombia a very interesting initiative to take this concept even further: Wesurance, an initiative backed by Suramericana – the leading insurer in Colombia – looking to create groups of people to insure almost anything you want. Please check this video: http://ift.tt/1FpotVi.

Disintermediation by peers connecting between them directly, easily, efficiently, looking for those that share the same concerns (and risks) and being able to create a product as personalized as it gets. I don’t know about you, but to me it raises a lot of questions about how this will change intermediation in insurance as we know it and, much more, it raises the question of which is going to be the role of insurers.

Want a hint? Banks are slowly starting to embrace the adoption of P2P as part of their business models. Suramericana in insurance is doing the same.

My advice: get involved, try, fail, learn, adapt, and shoot for the moon. Even if you miss, you’ll land among the stars.

 

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Living with the Internet of Things (and crowd funding)

Earlier this week some users of the Wink smart home hub found that their smart home hub was more useful as a door stop or brick than as a hub. A fix is being worked on and rolled out to customers but for me this looks like the teething problems of the still nascent Internet of Things movement and one of the hurdles Apple is trying to jump with the Apple Watch.

Earlier this month i received a portable handheld scanner from Dacuda. It’s not unusual for me to receive gadgets in the post but this one was particularly interesting to me as I had been one of the kickstarter funders of the item and have been following it’s creation with some interest. It piqued my interest particularly because I’d seen the technology almost two decades ago in a research lab but not seen it come to market at a reasonable price – a scanner that one moves over the page and software builds a picture of the underlying document.

This isn’t the first item funded via crowd funding I’ve bought. My keys have a tile attached to them and I’m still wearing the original Pebble wrist watch (with e-ink display). I guess this firmly places me as an early adopter in the Internet of Things, wearables and crowdfunding space. I don’t have a Wink hub although it’s sort of appealing but not available in the UK yet.

So far though it hasn’t been all clear pastures and dreams ideally realised. The Internet of Things has it’s teething problems. Let’s take the Tile for instance, a small device that emits a bluetooth and short rage wifi signal so you can track it’s location from a phone or tablet, thus, never losing it. I used to have 3 of them and now have 2, that’s right I lost one. I was rushing out the door, the school run running a little behind schedule and forgot my phone. Somewhere on the brief journey I dropped the Tile and what it was attached to. Had I had my phone with me it would have given me the location of the last place it connected to the Tile, as it was it told me the last time it saw the Tile was at home. No matter, in theory if I retrace my steps I will come in range and be alerted that it is found. This didn’t work either so I assume it was picked up. Since the battery lasts two years perhaps someone with the app will go near it and it may yet find it’s way home – but not yet. Part user error and part an unfortunate series of events perhaps, but another technology found fallible and a dream not quite realised.

The Pebble has been more successful. The fact I answer the phone when it rings is largely down to my smart watch rather than the phone these days and the wrist-borne notifications are hugely helpful. I use the misfit app on it to tell me I’m not doing enough exercise and a Withings smart body analyser at home to let me know the end result of not having done enough exercise – all great fun!

I may still invest in the Apple Watch. I have a standing desk so do stand, something misfit on my pebble doesn’t track and I feel I want to be recognised digitally for this at least.

The little handheld scanner is more work in progress. My son’s somewhat fascinated when it works and hugely interested in the errors it makes and where they are made – such is life as an early adopter. More teething issues there.

No doubt though we as a population are moving to a world where anything we buy could be connected, where we can buy a $50 hub that controls our lighting from an app and it’s failure is covered in the global (technology) press and where we can fund and follow the development of gadgets we’ve dreamt of owning for a couple of decades (even if the software needs a little more work).

So what does this have to do with insurance? The fact is the Internet of Things appears to be running apace, smart homes are being tried out by the early adopters and bugs are being squashed. Did you know with the Wink hub, the app on your phone and this $40 quirky+ge water sensor you can get alerted in real time regarding escape of water events? Ever been out of the house and come home to find the kitchen, bathroom or basement flooded? Indeed just yesterday Karen pointed out this article suggesting insurers are getting involved with smart homes.

There’s a lot of buzz around health and life insurance in part driven by the Apple Watch launch. I’m looking forward to Apple doubling down on the HomeKit API or someone credible getting there first; I’m looking forward to the same boom around the Internet of Things and insurers handing out moisture sensors to home owners. I’m looking forward to prevention and intervention products, rather than selling services after a loss.

Perhaps we just need to squash a few more bugs first.

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Duh – Consumers Don’t Want to Crash Their Cars

Shocking results in J.D. Power’s 2015 U.S.Tech Choice Study released today – consumers want crash avoidance technology and are willing to pay for it!

We discovered a similar view in our recent Celent report Targeting Innovation: How Your Customers Might Respond. The data pointed to the fact that consumers want to see innovation in service before sales. Consumers are saying: “Help me, before you try and sell me.”

So, why do many insurers continue to show a preference to innovate in the online quoting and the traditional product areas before service or risk avoidance? To be fair, customer experience is attracting much attention and investment. Also, some insurance providers are influencing the way their insureds drive, either directly (Ingenie) or indirectly through pricing (Progressive). But many of the efforts are not in line with the consumers’ wish that we hear over and over: “I don’t want to experience a loss and it would be very valuable to find a provider that would keep me (and mine) safe.

For example, insurers know which roads are risky and which aren’t just from the frequency of their claim data. What if they provided this information to their customers to alert them to the dangerous routes?

There is space here for leaders to innovate in loss avoidance, both in the commercial as well as the personal lines of business. The reputation for “the innovative insurer that helps its customers avoid loss” is still up for grabs.

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Could this be the kick the industry needs to take mobile seriously?

Today marks one of the most significant changes to Google’s algorithms seen in recent years. As of this morning, Google’s search engine will favour mobile friendly content over traditional website content. Many firms who have not invested in mobile will get caught out as they start to slide down the search result list when viewed from a mobile, possibly moving from page 1 to page 2 or 3. For firms that are reliant on online sales and service, such as small businesses and retail, this change could have a significant impact on their revenues, probably resulting in either frantic tweaking of Search Engine Optimisation (SEO) routines, a rapid investment in redesigning their site for mobile, or some other more radical action such as simply scaling back operations to match lower revenue streams.

Within the insurance industry, the greatest initial impact is likely to be felt by insurance distributors, aggregators and direct operators who increasingly rely on online sales for retail products. Many of these operators have been investing in mobile-ready sites for some time now. So, to test the progress made, I thought it would be fun to conduct a quick highly unscientific test just to see how far down the results list you had to go before you reached a site that was not listed as ‘mobile friendly’.

For simplicity (and being based out of the UK), I chose the UK personal auto market and the UK individual life market as my test case. I thought that trying to action this for other markets such as the US, France or Japan from within the UK would produce some strange results owing to my IP address location. So, excited to get going, I simply typed “Motor Insurance Quote” and “Life Insurance Quote” into my mobile.

What were the results of this unscientific test? Well, I guess that it will come as no great surprise to readers of Karen Monks’ series on the state of the web/mobile capabilities in the life market; there are more ‘mobile friendly’ sites in personal auto than in life insurance. Ignoring sponsored advertisements, I got to result #13 in personal auto before I hit my first ‘traditional web-site’, which to be fair was not a bad lay-out for a traditional site. With Life, the story was quite different. I only managed to get to #3 before encountering my first traditional site, and this time it was tough to even see where you needed to press to get started on the site from within a mobile device.

What do the results of this highly unscientific test tell us? Well, I guess you could argue, that it tells us little new about the UK personal auto insurance market. It’s a highly competitive market that has been subjected to multiple disruptions over the decades, starting with direct operators in the 1980s, then by the aggregators in the 2000s, and now by the telematics insurers. Investing in mobile capabilities, although first seen as an innovation by insurers, has rapidly become a basic requirement for survival in recent years. Consequently, this latest change by Google is unlikely to have a significant effect as the market has already moved. Insurers within this market need to just continue with ‘keeping ahead’.

However, for Life insurers, it feels like the situation is still very different and potentially ripe for disruption. There is, of course, an argument that says that Life insurers do not need to invest at the same rate in mobile capabilities compared with personal auto as customers still rely more heavily on intermediated channels. However, the counterargument to this is that even though customers may not choose to buy on-line, they may still choose to research a product online first (estimated as c.29% by Celent in 2011 – now likely to be higher). So, could this change by Google be the catalyst the life industry needs to start taking mobile more seriously and invest for the future? Sadly, only time will tell. I think I’ll diary the same unscientific test for a future date to see if there has been any movement…..watch this space!

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Next step in the Internet of Things for life insurance

The last seven days have been exciting for the next wave in Life insurance (and Health). Last week we saw John Hancock introduce the Vitality program into the US.

This week we have a collaboration between IBM, Apple and Medtronic, the huge maker of medical devices.

Just yesterday we had an inquiry from a major Life insurance company asking about a service that consolidates data from multiple users of wearables. We were not aware of a major player offering the service, but that same afternoon, this partnership was announced. As the use of wearables increases, particularly for use beyond an individual’s fitness, it will be critical for standards and services to emerge to bring this data to multiple users.

Including Life insurance companies.

Of course, we still have the obvious challenge of competition in the industry. This is great for users of Apple and Medtronic’s products, but what about people wearing a Moto 360 or Fitbit? We are not quite there yet, but everything happens with a first step.

I commented the other day to a colleague that this is the most excitement we have had in Life insurance since the introduction of Universal Life in the 1980s. The pace will only increase.

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