This is the sixth of eight every-other-week blog posts excerpts from my book: “Stone Tablets to Satellites: The Continual Intimate but Awkward Relationship Between the Insurance Industry and Technology”. The publication date for this sixth post is May 18, 2022. The fifth blog post excerpted from my book was posted May 4, 2022. The last blog post of excerpted content will be June 15, 2022. Wells Media will publish the book on June 28, 2022 as a hard cover, paperback, ebook (Kindle), and audio book.
The excerpt of this 6th post is from the Insurance Commerce Section of the book. This section includes seven chapters which encompass a discussion of risk landscape perspectives; of customer perspectives; of carrier perspectives; of product development perspectives; of channel management perspectives; of producer productivity perspectives; and of claim management perspectives.
Let’s get to the excerpt …
Insurance carriers exist to mitigate or otherwise manage risk. They have been accomplishing this societal value-add for hundreds of years through wars, depressions, recessions, strong economic times, and weak economic times. However, insurance carriers are facing one of their largest hurdles to continue providing their societal value-add: the transition from conducting commerce on a terrestrial basis with a sales and service mixture heavy with physical artifacts augmented with some digital artifacts to conducting commerce through the web with a sales and service mixture heavy with digital artifacts augmented with archaic physical artifacts which should have been relegated to the insurance industry history books at least a decade ago.
In the Fifth Technology Era, insurance firms have to come to terms with that reality that not only are the ground rules of customer expectations different but the ‘ground’ is rapidly disappearing into the mist of yesteryear.
In this chapter focusing on carriers, I discuss how commerce is being redefined by smartphones and the concomitant smartphone apps, the Digital Divide, and the ‘Red Queen Dilemma’ and how insurance carriers could resolve it. I also discuss a suggested framework to manage the insurance customer journey, the evolution of customer-insurance carrier interaction paths, virtual assistants, and real-time video solutions all in service of making it quick-and-easy for insurance carriers to enable customers to purchase insurance and consume service.
Digital Divide defines the split between digital dreams and reality
The arrival and global spread of the COVID-19 pandemic in late 2019 and throughout 2021 exacerbated and amplified a societal pre-existing condition: the digital divide. As the number of positive cases of exposure and associated infections grew throughout almost all of the countries on the planet, governments shut down the physical facilities of businesses, schools, places of worship, and other places that groups of people usually gather to stop or minimize the spread of the virus.
One solution seemed to be the smartphone: a mobile device chock-a-block with web-accessible, cloud-enabled apps that provide people with a way to fulfill a variety of required and nice-to-have economic, education, entertainment, and other objectives of daily life. Instead of meeting face-to-face in real life (IRL), people could meet ‘in the app-filled smartphone-enabled space.’
However, this is when the reality of the digital divide for employees, students, and customers exposed a painful truth: If an app-filled smartphone represents a societal mechanism to adjust to the ghost town-enforced restrictions of the pandemic, then the digital divide represents a sledge hammer that shatters the hope of accomplishing objectives enabled by the mobile device-shaped digital dream for many people.
‘Red Queen’ Dilemma for insurance carriers
“‘Well, in our country,’ said Alice, still panting a little, ‘you’d generally get to somewhere else — if you ran very fast for a long time, as we’ve been doing.’ ‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!’” from a chapter where the Red Queen takes Alice by the hand and begins to run faster and faster, Through the Looking Glass, by Lewis Carroll
Insurers are finding themselves in their own ‘Looking Glass’ world shaped by technologies and concomitant applications in the Fifth Technology Era. Marketplaces are being continually reshaped by the increasing consumer access and use of mobile devices; web-accessible, cloud-enabled apps for mobile devices; audio and video streaming services; and the growth of voice as a channel to fulfill a variety of searching, sharing, streaming, and shopping objectives.
The staid, seemingly-straightforward, terrestrial-based marketplaces of decades past are, indeed, decades past. Insurers that are doing all the running they can to keep in the same place are discovering that is insufficient to be successful during the Fifth Technology Era.
Resolving the insurance ‘Red Queen’ dilemma
Insurance carriers can resolve the ‘Red Queen’ dilemma by, in part, deploying technology applications to support the current marketplace and simultaneously prepare for the future marketplace. This will require insurance firms to deploy applications which customers are familiar with but that simultaneously improve the effectiveness and efficiency of the insurance company’s operations.
In the Fifth Technology Era, this means insurance carriers should consider using:
- a holistic framework of the customer journey to manage customer experience
- virtual assistants to service customers and agents
- video solutions to service customers and agents
- communications and collaboration solutions to strengthen product development
- new go-to-market solutions such as creating or participating in digital commerce platforms, whether used for internal purposes (i.e. product development), customer-facing purposes (i.e. helping producers find coverage for commercial lines clients more effectively), or decision-making-focused collaborative initiatives with risk managers of commercial P&C insurance clients.
These five actions enable insurers, at a minimum, to strengthen the ability to more quickly target and meet customer expectations, manage the changing risk landscape, alter the firm’s risk appetite as needed, and develop new products on a more timely basis.
The next blog post will be published on June 1, 2022. I will excerpt content from one of the other chapters within the Insurance Commerce Section. Specifically, I will excerpt some content from the chapter titled Channel Management Perspectives. The last blog post of excerpted content will be published on June 15, 2022. The book will be published on June 28, 2022.