Insurance Industry

Insurers Need to ‘Exploit’ Digital Technologies

Accenture survey shows P&C customers want a better digital experience and more customization from insurers.
By: | August 18, 2015 • 3 min read

Capturing the insurance customer of tomorrow is going to require a substantial investment in digital technology, a new report from Accenture consulting firm revealed.

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A survey of 13,000 P&C and life insurance customers in 33 countries showed that as much as $470 billion in insurance premiums will be up for grabs globally as a result of declining customer loyalty and perceived commoditization of products.

Fewer than one-third of insurance customers indicated they were satisfied with their current provider.

“The study data indicates insurers are not keeping up with rising customer expectations, leading to increased customer dissatisfaction with insurance providers,” said John Cusano, senior managing director of Accenture’s global insurance practice.

“This has created a ‘switching economy,’ which threatens traditional insurers by giving the advantage to companies most successful at exploiting digital technologies.”

Nearly one in four (23 percent) of the respondents said they would consider buying insurance from online service providers, including technology giants such as Amazon and Google.

Nearly half (47 percent) of the survey respondents said they want more online interactions with their insurers.

At the same time, the number of customers who believe that most insurance carriers are the same in terms of their products and services jumped 50 percent in the last year, up to 21 percent in this year’s survey from 14 percent in a similar survey last year.

“Today’s insurance customer is more empowered, more social and has higher expectations of his/her providers.” — John Cusano, senior managing director, Accenture global insurance practice

Furthermore, fewer than one in six customers (16 percent) said they would definitely buy more products from their current insurance provider. In addition, only one in four (27 percent) had a high estimation of their insurance providers’ trustworthiness.

“Today’s insurance customer is more empowered, more social and has higher expectations of his/her providers,” Cusano said.

While many consumers globally are using online tools to purchase insurance products, only 15 percent said they are satisfied with their insurers’ digital experience.

Jean-Francois Gasc, managing director, insurance, Accenture Strategy, Europe, Africa and Latin America

Jean-Francois Gasc, managing director, insurance, Accenture Strategy, Europe, Africa and Latin America

“Leading insurers realize the need to offer a broader range of innovative products and services and create a differentiated customer experience, which will likely require partnering with nontraditional players,” said Jean-Francois Gasc, managing director, insurance, Accenture Strategy, Europe, Africa and Latin America.

“As a result, traditional insurance providers face a stark choice: embrace digital and customer-centricity, or become a highly efficient manufacturing utility, leveraging capital and digital technologies to provide low-cost insurance product manufacturing and servicing,” Gasc added.

“Those who do neither are likely to lose out in this switching economy.”

The report noted that insurers need “a holistic digital business strategy that encompasses the entire enterprise” if they want to remain relevant.

While many insurers have improved their customer-centricity, only a minority — the “digital transformers” — have taken that holistic approach.

The report found that 82 percent of digital transformers have invested in digital channels and technologies to advance customer-centricity and provide tailored customer experiences across all products and channels. Only 56 percent of the “digital followers” have.

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To give customers what they value, many insurers will have to partner with other companies, probably outside of insurance, to form ecosystems that offer a broad and innovative range of products and services.

Sixty one percent of insurers are exploring the possibility of offering non-insurance products and services.

“Building digital capabilities can be challenging, especially for industry players with little experience and complex legacy infrastructures,” the Accenture report noted. “It makes sense, then, that 43 percent of insurers plan to acquire innovators/start-ups to build new digital capabilities, or have already done so.”

Steve Yahn was a freelance writer based in New York. He had more than 40 years of financial reporting and editing experience. Comments can be directed to [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]