A Disconnect in Connected Insurance

Apr 6, 2023

A Disconnect in Connected Insurance

Almost everyone has heard the adage, “it’s not what you know, it’s who you know.” For me, it was an integral part of my upbringing – whether you needed goods or services, we were part of a connected community. In my extended household, it was (and still is) always expected that one of us “knew someone”, who could provide you with what you needed.  I was raised with, and continue to carry, a strong belief to be of service, to my family, network, and all those in my circle, even as it has continued to grow.

When I first ventured into the #insurance space, the connections I maintained were my lifeline, helping me learn about everything from the lifecycle of policies, underwriting and pricing — to the technology constraints that carriers faced. I absorbed and appreciated the opportunity to expand my insight, understanding and exposure.  Having had (and still have) incredible mentors, from architects, analysts, CFO and CEOs, visionaries, and pioneers, each of whom I considered an indispensable influence. Even now, more than two decades and several gray hairs later, I continue to learn and grow, thanks in large part to my network; and the amazing acumen shared by a wider collective of individuals who are champions of change, catalyst of the new and next, and deeply invested in sharing their incredible intellect. This “connected insurance community” is what I envision when I hear the term connected insurance.

Vanity would have me say I have always been ahead of the curve, but humbleness requires me to admit that its actually because of those personal connections and the increasing pace of #digital technology that inspire my continued learning. This has also helped me focus on new possibilities, especially in understanding the possibilities surrounding connected insurance and the modern conveniences that have been designed to support P&C lines. Advances in tools and technologies like telematics, autonomous vehicles, and AI/ML, are also supported by the growth in the sharing economy, which continues to increase the opportunities to create and design data-driven and bespoke insurance products, conveniently suited for the shift in expectations and customer demand. This avenue also seems to be driving more carriers to the shift with headless engagements and architecture.

When executed correctly, headless architecture should provide true value in the current experience economy. Using technology to deliver more personalized customer experiences, while simultaneously automating routine tasks for staff and agents, is merely one of a myriad of benefits, as well as differentiators for connected insurance. Technologically driven businesses continue to set the bar for great customer service by adapting to and exceeding the ever-changing demands and expectations of today’s customers. I mean look at companies like Netflix, Spotify, American Express (and for the socially savvy folks, Instagram and YouTube) who all leverage big data, innovation, and capitalize on each on-demand experience.

I have often heard that the insurance industry is slow to modernize and reticent to change, however I have seen more fast-tracked ideas, adoption of new technologies and digital transformation in the past decade than many industries achieve in a century. In fact, the number of devices that deliver insights to P&C carriers that have become available in two clicks on Amazon demonstrate just how quickly companies (and consumers) have embraced change. However, the disconnect seems to be coming from the companies who are leveraging technology to deliver superior experiences, but then expecting those to be digitized as well.

I’ll use myself as an example, perhaps my “profile” indicates that my preference is for digital interaction, and while I expect consistent, integrated experiences across all communication channels, if I were alerted to an unlocked door, or worse, leaky pipe, by both a telematic device and my carrier, the preference of delivery, whether agent of automated alert, would be irrelevant. I would feel not only more secure (and truly protected) but astounded by this new definition of customer service & convenience, and grateful for the preventative measures of what could have a costly and complex claim.

When I purchased my latest home, the realtor kindly left us with a parting gift which included a hefty bundle of materials — including an ad with a ‘new homeowners discount’ for Wi-Fi enabled lock — which also connected to our other devices, upgrading my smart home to PhD level (I feel as though I now have a doctorate in digital living). To help deter theft, my lights can be set to go on and off while I am in flight, or I can see which of my three favorite Amazon drivers is delivering to my door, while simultaneously keeping up the pretense of me doing housework, with my robot vacuum.

Had I been aware of possible discounts or better rates for having a smarter, more secure home, I would certainly have been delighted by my carrier, or possibly even used it as an opportunity to change carriers, because let's face it, the last time I had a personal connection with my carrier was well, never.  Considering that the foundation of connected insurance is the ability to data points to identify risk on a granular level, enabling carriers the intel and agility to provide accurate insurance is what the next level of customer experience is.  Eliminating annual premiums based on old risk models and instead providing the opportunity to benefit from real-time, data-driven, AI-powered risk classifications that reveal the exact exposure for every transaction delivers the assurance that as an insurer, customers have come to not just expect, but demand.

In fact, during my tenure as a policyholder, I cannot recall having any engagement with my carrier, that I myself had not prompted. For someone who recalls having dinners with our family agent who would often inquire about changes in situations to help my parents or grandparents get better rates or offers, its puzzling that insurers are still not pairing the value of combining data and personal touches to design experiences that support each interaction across the policy lifecycle.  

Once my Uncle Chick “left the insurance” game, insurance became a disconnect. We did not have anyone coming to our home to tell us which policy was right or what the various types of coverages could mean, individually and commercially. Many of the agents we had been assigned were more solicitors or call center support, than intermediaries acting on our behalf – able to shop around for policies – for my cousin and his thriving construction business or even my Nonna, who simply stayed on her husband’s policies because she was of the generation that insurance was a “man’s business.” Being the newly appointed “insurance expert” of family meant that I reached out to my own network and learned about the various BOP policies, the shortfalls in commercial coverage my cousin had faced, and all of the intricacies that could be entwined with a more personalized, connected insurance experience. The irony that “Customer Experience” continues to be a driving trend for carriers is not lost on someone like me, who can posit 1,001 ways (in a day) that would enable insurers to truly reevaluate, redefine and design experiences to meet the needs of consumers in almost any situation or circumstance.

For instance, the consumers, like myself, who find those devices that empower us to control and monitor our homes an integral part of our modern convenience, and appreciate the benefits that they provide; imagine being the carrier who not only partners with those devices, but with other technology liberators, who enable them to focus again on the core of their business, the people and the policies that protect and support them. Delivering real time insights or personalized messages become meaningful and relevant, and just as I am engaged with my home, I could envision myself being engaged with my carrier, to the point of being an advocate and evangelist. This applies across the industry, whether a specialty lines or life insurance provider, the access to information and ability to leverage technology is the next step of evolution and relevance in the connected era.

It's also worth noting that my first draft of this article was written partly on a plane and partly on a train, while enroute to @InsurtechNY. I was able to meet and reconnect with so many of my #Insurtech brethren and actually had some amazing conversations surrounding the new and next in digital progression. Many minds, far more brilliant than my own, seemingly agreed that yes, is it is indeed ironic that Customer Experience has been a top priority and catalyst for change (especially for P&C carriers) for the past several years. However, in all the informative sessions, not one married the importance of designing connected experiences from the customer to the claim, because at its core, insurance is about building and maintaining connections.

Written by Nikki Dugan, AVP of Marketing

Quote 4

“If I had to pick a word to describe NLS it would be empowerment. This organization is made of highly skilled individuals who are empowered to go do what they do best.”