Why digitization should center insurance customers

In the insurance industry, carriers are still learning to transform their business for a digital experience that benefits the customer. I worked in insurance sales, service, and underwriting for 15 years and just a few years ago moved to a position at Jerry, the car insurance comparison shopping app.

Now, I focus on the technical side, working with a team of engineers to simplify standard insurance processes through our app. I thought my biggest challenge would be learning the technical side of things. While there was certainly a learning curve, what I found required the most adjustment wasn’t my technology expertise but rather my overall mindset. I needed to learn to approach every problem from our customers’ perspective, before I could start thinking about the technology-based solution.

For my entire career, I had been solving problems for the insurance company that employed me. I would ask myself, what should we ask the customer in order to improve loss performance or conversion? Or, how could we streamline the process to save our agents time on the phone? I was problem solving for the carrier.

I should have been asking, how can I make a question relevant or a process frictionless for the customer? And, how can we eliminate the reasons our customers have to go to the trouble of calling us in the first place? All those years, I should have been problem solving for the customer. If more customers are satisfied, the number of problems a carrier has to deal with significantly decreases. Now, I solve problems to optimize the customer’s experience and the carrier subsequently benefits. 

Solving for the customer resolves customer retention issues. The faster and easier it is for customers to navigate the process, the more customers will come through your funnel. The more customers that come through your funnel, the more policies you are likely to sell. And when you make that process remarkably easier, through digitization and automation, that customer is more likely to continue doing business with you, again and again. 

Here’s an example of how it works. Jerry, like all insurance brokers, needs to know the driver’s average mileage in order to provide quotes from carriers. We found that asking customers, “How many miles do you drive each year?” often delivered underestimations, which in turn brought inaccurate and lower premium quotes from carriers. Customers were understandably disappointed when they received a higher final policy quote from a carrier based on more accurate mileage. This could cause the carrier to lose that customer’s business.

So we tapped into the customer’s mindset and broke the question into two parts. We started asking “How do you drive?” and found that encouraging the customer to think about how they use their car (commuting, errands, etc.) provided a frame of reference for how often they are driving. We then asked, “How many miles do you drive per day?” This ultimately resulted in a more accurate quote earlier in the process, which made for happy customers and happy carriers.

The same logic can be applied to insurance shopping processes that are automated.

Incorporating digital and automated processes into all aspects of the insurance business should be done with a customer-first mindset. This will ensure the change benefits the customer and your business. There is a direct line from happy customers to carriers’ business success. Effective, customer-first digitization can mean more policies sold and higher customer retention.