Moving to a digital first approach is one of the most significant challenges for insurers in servicing the needs of modern customers.
This can require significant technological investment in financial and other workplace resources, but organisations which do not have clear goals and backing from senior leaders run the risk of missing their targets.
That was one of the points that came out from the Health & Protection insurance technology roundtable in association with Comarch.
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Christopher Payne, partner and head of UK/EMEA technology GTM for insurance at EY noted: “There are a lot of CEOs or COOs who just look at it and say ‘Oh it’s too complicated, let’s just keep what we’ve got.’
“But we all agree digital is so important for Generation Z.”
As for putting those changes into place, Payne pointed to the success of Vitality.
“Vitality is a really good example, but it comes from your boss, it comes from your CEO,” he said.
“Real change and real technology advancement needs to come from the top of the company or else it’s going to fall down.”
Dave Winter, head of innovation at Benenden Health, echoed that, adding: “It’s probably about having a clear vision of what you’re trying to achieve.
“Technology is an enabler and it needs to come second.
“It’s about what are we trying to achieve, what’s our vision? What’s our risk appetite? How’s the market going to change? All of those things.
“And then work out what the right answer to the technology conundrum is, based on that lens.”
Focus on business outcomes
Winter emphasised that companies need to have a clarity of mission when undergoing any form of technology change or update.
“Otherwise, you’re just swapping out a shiny box and you get halfway through the project and think, what am I doing here, what have I signed up for?” he added.
Alongside support from the very top of the organisation, the panel agreed that focusing on the business changes being made and the expected outcomes for customers was vital.
Andrew Foley, journey director at Vitality, highlighted two points that were vital for the insurer.
“One is enabling differentiation through technology and the second is obsession with the customer,” he said.
“Our chief executive is not a technologist, but he is obsessed with the customer.
“We invest a significant amount of budget every year in technology innovation and modernisation on a constant basis, but none of it is about the technology. What he is passionate about is customer outcomes.
“If technology change will deliver a massive step in our customer outcome, then he’s 100% supportive and will invest whatever is needed to achieve that goal.”
Stepping out from the pack
Foley then gave an example about the approach the company is taking to underwriting.
“We’re putting a significant investment into improving our underwriting, predominantly because the feedback from advisers and customers is that it’s an area we need to improve on,” he said.
“Our chief executive is very clear, which is to look at this end-to-end experience around clinical underwriting and take it a massive step forward and completely change how we do it.
“We’ve put a significant investment into that, it’s nothing to do with systems and applications and platforms, it’s entirely around our customer experience.
“Technology is the enabler to improve that customer experience around our underwriting end-to-end.”
But Foley noted that many technology providers did not understand the radical shift the insurer was aiming for and could not deliver that change.
“We talked to a lot of providers in the marketplace around this and none of them were prepared to match our innovative approach that we were taking,” he continued.
“They were trying to push the standard solutions, saying that was the way underwriting works and how everyone does underwriting, which we didn’t want.
“So it took us down a different direction to the technology we wanted to implement because it didn’t meet our customer expectations.
“To take that big step, you can’t do that without having an entirely new way of looking at the issue, and all the technology providers in that space in the UK, none of them could do it,” he added.
Regulation driving investment
Another issue affecting the market is the Consumer Duty and the new regulations that have come into place, the effect that has had on business and the technology requirements around it.
Despite the greater complexity that Consumer Duty can bring, the consensus seemed to be there were many positive aspects and it can be an important trigger for funding developments.
In contrast to some perceptions of regulatory work being used as an excuse for avoiding innovation, now it is being used to drive the previous outcomes and push forward the funding model and prioritisation.
Saumya Barber, head of proposition development at Unum, said: “I think it’s been really positive in terms of unlocking the investment into why customer experience and customer journeys are using the right technology as the enabler.
“It has never been more important to have a really clear way of communicating to your customers.
“As we move further and further into digital first, this is the way to do it. What we’ve seen is it’s accelerated it and we’re unlocking more investment to do it right.”
Having this investment and internal desire does not mean oversight is ignored during design and implementation, with focus groups still needed to test and ensure the quality experience is being delivered.
“You can turn anything digital, can’t you?” Barber continued.
“But it doesn’t mean anyone’s going to use it or it’s going to be any good.
“From my point of view, Consumer Duty has been really positive to accelerate where we were heading anyway and putting the customer at the heart of it.”
Data demands
The panel agreed, noting that the Customer Duty shifted the focus more towards outcomes and to know what’s happening.
That importance on taking in more data and having a greater understanding of the overall situation was recognised by Aviva head of individual protection propositions Victoria Francis.
She highlighted how insurers are now relying on data more and this can prove attractive to business leaders in telling the story of the organisation and its customers, whether that comes from the Consumer Duty or other requirements.
“It is the insight,” Francis said.
“That kind of drives that, to enable you to get that across to the senior leaders as well.”
And Emma Robertson, head of customer transformation at Bupa, agreed, noting greater access to data was desired across the business.
“Our account managers really love that access to data, which they can then pass on to their clients,” she said.
“So that’s the angle I’ve seen it from; account managers who really want to understand how this particular service really adds value for our customers, because then that’s a great message. And they can then sell it to their clients.”
Making advisers’ lives easier
But it is not only insurers that are calling out for more digital ability to meet the needs of Generation Z and consumers as a whole.
Advisers too are seeking the digital first approach as it will benefit them and their models, especially as they build out consultancy and expertise in the right areas.
Dr Macarena Staudenmaier, head of clinical product and operations at Simplyhealth, explained the cash plan provider aimed its focus on customer outcomes, health outcomes and how its product is differentiated.
However, she acknowledged that message does not always go through the intermediary channel into corporate clients.
“Brokers need their job to be easier through technology and they don’t have that at the moment,” Staudenmaier said.
“This is the best way that they can communicate value through to the staff. They’re asking, how do I collate all of this information to be able to make the right decision?
“There’s definitely a collective ask for these sorts of systems.”
Differentiating providers
Of course the challenge comes when looking to implement the right technology and insurers have myriad systems and providers to choose from, but this can be a difficult task.
As Bupa’s Robertson highlighted: “There are a lot of businesses now who are selling quite similar products, albeit with a few different nuances.
“Trying to get to the real detail of how that’s going to support your business can be challenging.
“I went to a conference earlier in the year and there were about five companies I couldn’t really differentiate between, so really trying to differentiate what you need as a business can be quite challenging.”
But for Bradley Jones, insurance-business development manager at Comarch, there is a huge opportunity for insurers to bring control of sales back in house.
“It goes back to communication, branding and understanding clients,” he said.
“And given the commission involved and that broker may try to switch the client at the next year’s renewal to earn another commission, I’ve never understood why insurers don’t try and regain control and bring that whole process back in-house.
“Because it gives you access to the clients, cross-selling opportunities, new acquisitions and can drive loyalty.
“With Generation Z wanting things to be digitised and online, here is a golden opportunity for insurers to bring it back in house and move away from aggregators and price comparison websites.”
Download the roundtable supplement for the discussion by following this link.