The past 18 months have uncovered a major vulnerability in the insurance industry, as companies have struggled to maintain consistency in their processes in the face of remote working. Communication processes, in particular, have suffered and as a result, traditional insurers now face the real risk of losing customers to insurtechs and other more technologically advanced companies.
Here we’ll look at how and why companies have fallen into process chaos, and the importance of maintaining and driving process consistency and how they can get there.
The pandemic set the stage
Historically, many industrial processes have developed through the ability to communicate internally. Insurance in particular is a field that runs on a great deal of in-person training, where much expertise is gained simply by watching and learning from more experienced colleagues or supervisors. When a new employee is onboarded, the process of learning begins, off-site at a location with other trainees and on the job, often by a more seasoned staff member. On-site training, person-to-person instruction and learning consistency are how the process gets communicated across an entire company.
With office shutdowns last year and work-from-home being the only viable alternative to shuttering business completely, the virtual model of working—especially onboarding new people—has made camaraderie near impossible.
For a new hire in insurance, the ability to ask questions and share information or even receive informal advice in person is essential. Learning a company’s processes around communicating with customers, particularly in an organic way, is a far bigger challenge to do remotely.
In this new environment, people are working in virtual rooms, cut off from the ability to check in with a colleague at the next desk if a question comes up. This can create a gap in learning and result in inconsistencies in how processes are managed. In short, process chaos.
Risks of inconsistent processes
Process chaos can soon lead to inconsistencies in interacting with customers. If several employees are new and haven’t had the benefit of in-person training on the complex processes involved with client interactions, there can be big trouble. If there is inconsistency in how a process is carried out—for example, if two different agents are paying claims or writing policies differently—the customer senses that they’re getting a different experience each time. If variation happens, customers could get upset and be disappointed. That all is without even touching on regulatory issues.
Similarly, if, through a loss of process consistency, an agent misses key moments that matter with the customers—whether from loss, an event, or a life change—this can lead to a loss of client trust and loyalty.
The weak chain in the link in the current environment is when a company relies on manual processes, and even more personally, on the outcome of the customer interaction. This is possibly the biggest value driver in the insurance world, considering the all-important relationships agents have with their clients. It’s also where the greatest risk happens—when the consistency is missing customers may have a poor experience, let’s say because of a new person or trainee who hasn’t learned the process.
Barring regulatory errors, which is a whole other issue, the biggest risk of process chaos is losing clients. If clients aren’t feeling the consistency they’re used to from the person-to-person and process-to-process interactions, it doesn’t take too much before that inconsistency can create dissatisfaction. From there, it’s a small step to dissatisfaction with the company. In such a competitive industry, without those key process touchpoints and meeting consumer expectations, many customers will go looking for other options if they’re not happy.
How insurers can address process chaos
To avoid this downward spiral, insurers should first address the onboarding of new employees and make sure that their training is carried out as consistently and clearly as possible.
Ensure that standardized processes, consistent operating procedures and training models that stress consistency is carried out. There are many remote support tools that can help drive that consistency. There’s online collaboration, technology and software that can come close to creating the feeling of being in close proximity to a coworker, as opposed to leaving the trainee to learn from a manual on their own. There are also business process management tools that ensure processes have been accurately documented, are updated consistently and represent a single source of truth for how work should be completed. Having invested in these technology tools, the best thing insurers can do is to understand how to use them effectively.
Another way to drive consistency is to invest in automation tools. By automating some of the processes, a company can ensure a consistent experience every time they interact with the client. Companies that have moved forward with automation have a leg up on everyone else.
Some insurtechs, over the last 18 months, have accelerated their seamless, touchless, automated and highly personalized offerings. These companies have moved forward faster on technology and automation and are cashing in on consistency with their clients—not missing those moments that matter, communicating clear processes and making it easy.
Invest now, or forever hold your peace
Insurers need to learn from new approaches like collaborative online sessions that allow lasting connections with colleagues and peers or provide a reasonable platform for training. There are new ways, new systems, new technologies and new software that can drive and actually improve process consistency. But in order to get the benefit of them, you have to invest in them. If companies are not investing in technology, automation and collaboration with employees—especially the new employees—companies risk getting further and further behind the pack.
Companies that haven’t moved forward with technology and automation must make sure they’ve standardized their processes. Companies also need to spend extra time and effort in onboarding and training new employees to drive consistent processes from the beginning by quite frankly, investing in it, and not assuming that it’s going to work the same way it has in the past.
