Future proofing the insurance sector through guided digital transformation

In a world of price aggregators, digital challengers and more demanding consumers, Insurers face a battle on multiple fronts to stand out in an increasingly crowded market. Here, Ian Allan, Business Director for Financial Services at Adare SEC, explains why now is the time for traditional Insurers to fully embark on their digital transformation aspirations to stay relevant, increase market share and build a communications platform that’s fit for the future.

The insurance market is pretty unique. Whether you’re buying a policy to cover your home, car or pet, what is traditionally a one-off, annual purchase has moved away from the days of long-term customer loyalty and retention to a simple transactional relationship driven by an online marketplace where the cost of a policy is king. Traditional insurers are now facing battles on multiple fronts to win and retain business.

Digital challengers are becoming increasingly prevalent in the market, offering a fully digital experience for on-boarding, customer messaging and claims handling (with the price benefits a purpose-built platform provides). Price aggregators continue to present an insurance policy as a price-driven commodity purchase to be revisited on an annual basis that actively discourages brand loyalty. Add to that the changes in consumer behaviour and a heightened expectation in how, when and why they are communicated to, and it’s a market that has undergone immense change in a short space of time.

These changes have forced a number of established Insurers to rethink their business models and their ability to communicate effectively with existing and potential customers. In order to stay relevant and fend off competition from all sides, building brand advocacy through an enriched customer experience is becoming increasingly pivotal to the success of an insurer if it is to thrive in an ever-changing, increasingly commoditised market place. The need to build long-term relationships has never been more apparent, so how does a traditional Insurer turn an annual ‘transactional’ purchase into something more relevant and rewarding for the customer to drive richer, longer-term relationships?

Evolving digital communications

From notifications giving advanced warning of an upcoming renewal through to ongoing claim documentation, Insurers are responsible for issuing a raft of customer communications and documentation to not only fulfil mandatory legal requirements but also to maximise customer engagement. The simple reality is that consumer preferences and expectations have changed at such a rapid rate that customers who may have been prepared to wait several days for these documents to be posted to them a decade ago, now expect their documents to be immediately available.

The effectiveness and speed of these communications can directly impact customer renewal rates and new customer acquisitions, both of which underpin business growth. Like many industries, the insurance sector is exploring ways it can digitise customer communications and the customer journey itself, a process many refer to as digital transformation. There are a raft of benefits for any business undertaking a transformation of this scale, from cost savings and process efficiencies through to enhanced customer engagement and significantly improved time to market for marketing communications.

So, how do you begin the digital transformation journey and what does a fully integrated customer communications platform look like?

How to embark on your own digital transformation journey

The key to digital transformation is forging links between your business’ primary goals and the needs or preferences of your customer base, which can often vary significantly across demographics. When any business begins to undertake a digital transformation journey, there are two critical factors that will underpin the success of the programme:

Collaboration

An effective digital transformation of a business should be an enterprise level project that’s sponsored and driven from Board level down, rather than attempting to link pockets of isolated transformation driven by various departments across the business. By holding workshops involving representatives from all departments, you will be able to establish your business’s operational, legislative, and messaging needs at a holistic level, ensuring transformation touches all aspects of your business. A third-party customer communications specialist will be able to help you to establish any primary and secondary business objectives and is often best placed to facilitate workshops, interrogate goals, and assess available data thanks to the experience it has in planning and delivering integrated communications strategies across multiple sectors.

Clarity of Vision

No business should invest in a significant digital transformation programme merely as a vanity project, so it is vital that your organisation establishes clear goals that inform your subsequent journey. Does your business’ leadership team have a digital-first target – in other words, the percentage of customer comms delivered via a digital channel in the first instance? Or do you have a predetermined cost reduction target that your business is aiming to achieve? Perhaps the overarching objective is to reduce contact centre times or simply to make your business easier to interact with? Your business may be aiming to achieve a combination of these factors and many more besides – either way, it is vital that these objectives are factored into any tactical planning so the transformation delivers enterprise level benefits as part of a cohesive programme of change.

What does an integrated and agile customer communications platform look like?

While the digital transformation of your customer communications may feel like a major undertaking for any organisation, working with the right communications service provider can help many businesses successfully navigate the challenges and significantly improve the time it takes to build an integrated solution, linking inbound and outbound comms across all channels.

The most digitally adept Insurers are increasingly looking at an integrated platform that encompasses SMS, secure email capabilities and traditional print in a truly channel agnostic output solution, allowing them to deliver transactional customer communications and marketing messaging via the channel preference of each customer. Where one channel isn’t successful (email bounceback or returned mail), this automatically triggers additional comms through another channel to ensure the relevant communications are successfully received.

This cross-channel ability is then replicated for all inbound communications, linking inbound and outbound, ensuring control, increased speed to market and flexibility in your messaging with your  customer base. The most ambitious digital pioneers are building towards platforms that operate in a ‘lights out’ environment, where data and template decision engines determine what template to use, what content to include and what channel to utilise, enabling 2-way, real-time communications to take place with every customer. These are the businesses at the vanguard of the communications revolution.

The experience a customer has during their on-boarding journey sets the tone for the relationship and the likelihood of client retention. If it’s a series of seamless interactions on the channel of choice for the client, it quickly builds brand advocacy, significantly improves the likelihood of client retention and ultimately leads to successful business growth. During a period of significant change in the Insurance industry, embarking on a journey to build a platform that positively influences these three key measures has never been more essential.

Case study: Allianz

With multiple companies, divisions, brands and sites, Allianz manages a range of product types, processes and communications streams. The business therefore identified a need to centralise and rationalise the communications sent to its customers in order to reduce time and cost.

By partnering with Adare SEC, Allianz has been able to devise and introduce an efficient inbound and outbound communications workflow that provides the business with significant cost savings and improvements in operational efficiency.

Today, Adare SEC dispatches approximately five million communications per annum to Allianz customers via print, email, SMS and portal-based delivery, as well as managing a range of supplementary products and services such as cheques, promotional items, publications and signage as well as online assets and office letters. Adare SEC also helps to close Allianz’s communications loop, managing approximately 2.5 million inbound digital and document-based communications, which are received, scanned and transmitted to Allianz via a secure data link.

By optimising customer communications across multiple insurance brands, the partnership has driven savings of £1.25 million over the last five years, as well as reducing Allianz’s administrative load and postage costs.