Midsize carriers are trying to stay afloat as the industry shifts to meet new demand
Midsize carriers and MGAs can find themselves in a precarious position due to evolving client demands and an onslaught of new business with larger insurers trimming their books, according to Steve Johnson (pictured), the founder and head of product at insured.io
“Customer expectations have totally changed,” he said.
In a bid to keep up with customer needs, some of these mid-size businesses have looked to up their technology game.
“Insurance has been slower to adapt new technologies, but as large players in the field drop out in areas like California, midsize carriers and MGAs are needing new solutions to deal with a lot more business than expected and field all the incoming calls they have,” Johnson said.
However, upending a company’s entire operating system and bringing in an internal team to manage this transition can be costly.
In an interview with Insurance Business, Johnson spoke about what mid-size MGAs and carriers are doing to help streamline their internal processes without a full technological overhaul and why omnichannel businesses have more successful retention.
“Insurance needs to meet consumers where they are”
In comparison to insurance industry brands that have wide recognition and well-funded insurtech startups, mid-size carriers and MGAs may find themselves at a disadvantage when trying to stay afloat amid digital transformation and market challenges.
With the instant connectivity that is afforded by cellphones and other smart devices, Johnson noted how consumers want real time access to their insurance policies, “even though most insureds don’t care about their policies too much, to be quite honest.”
“it’s not a thing that they’re interacting with on a daily basis because it’s fun.”
What they do expect, though, is to be connected to key dates and timelines that are tied to their policies, such as the renewal date, when it is going to expire, when a payment is due and if they have automatic payment set up for their coverage.
“Insurance has to continue to get on board with this and meet the customers where they are, versus continuing to just send them a letter in the mail to let them know something’s happening and hoping they even open it,” Johnson said.
For example, insured.io recently partnered with Bridger Insurance Services to help the company meet increased demand from consumers.
Being a California-based insurer and dealing with the pullout of major carriers from the state due to increasing weather events, Bridger found itself with more business than it ever expected.
“They had two things that they wanted to kind of figure out,” Johnson said.
“How do they not increase our customer service staff to be able to field all of these incoming calls that they’re getting and how do they keep the policyholders they already have.”
A simple solution was implementing interactive voice response (IVR), which allows for inbound payments and policy status checks, as well as automated phone and text outreach to reduce late payments and policy cancellations.
With IVR, the goal is to not eradicate the need for customer service individuals, but to shift some of the less important calls and inquiries to free up a representative’s call log.
“Some of the most asked questions and actions are ‘what’s my payment? How much do I owe? Is my policy still active? Can I make a payment?’”, Johnson noted.
“Those are easy items and shouldn’t take customer service time to address.”
While there are customers who will still prefer the more standard approach to accessing customer service care, most people prefer speedier interactions and instant connectivity.
“Small little steps like this can take some of the heavy lifting off of employees and be able to better manage incoming calls,” Johnson said.
Consumers highly favour omnichannel engagement
One of the main concerns in the industry right now is the lack of retention of consumers who are constantly looking for the next best product that suits their needs, according to Johnson.
“While rates are a big factor in why a consumer may switch to another provider, they are also looking for companies that give them the tools to be able to do what they need to do quickly and easily,” he said.
In a study of over 250,000 insurance customers, insured.io found that insureds who frequently use IVR services exhibit a 24% higher retention rate than those who rely exclusively on live customer service agents.
This can also includes self service methods, as well as having personalization and localization options.
“Localization is super important, giving information in multiple languages to make the customer feel more comfortable,” Johnson said.
“Through personalization, you can let a consumer know that they’re more than just a policy number and give them information and other news that is relevant to them and their situation.”
Being omnichannel does not mean a company has to completely renovate its internal processes and identity to seem modern.
“We have a couple of customers that have been in business since the 1800s and still use the green screen technology to run their operations,” Johnson said.
“It’s more about finding solutions that create a better customer experience and are complimentary to the way you function rather than trying to overhaul everything and create new problems costs.”
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