By Stephanie Griese, Dirk Schmidt-Gallas and Nick Frank
In a study last year, German-based insurer Signal Iduna Group found 80% of its customers had at least one digital interaction, including a visit to the insurer's website or online product page as part of their supplemental health insurance purchasing process.
However, only 12% of the 1,500 customers surveyed completed a policy purchase entirely on digital channels, even though it was possible to do so.
Like Signal Iduna, many insurance companies are struggling to convert online visits into bound policies. Despite consumers' widespread adoption of digital channels to engage with insurers, most insurance sales still finalize offline or in-person.
Selling insurance digitally can be challenging because insurance the insurance purchase is complex. Consumers are easily confused and often require guidance and assistance. As many as 75% of insurance customers have trouble understanding commonly used insurance terms and definitions, according to Simon-Kucher research. Buying insurance also can be intimidating as it requires a commitment of time to learn, understand and choose the appropriate product.
To meet the challenge, successful carriers and producers must adopt a behavioral-based approach to integrate human interactions, cognitive considerations and personalization to appropriately transform the insurance buying experience for an omnichannel world. This is an evolving area, so data-driven capabilities will be necessary to ensure continuous improvement.
Guide, Support And Boost Confidence
Insurers must identify junctures in the digital buying journey where guidance and support are needed. AI technology can detect a confused customer based on their browser behavior and introduce a chatbot or option to talk with a live person. Digital tools such as progress bars and interactive elements can also be critical to keep a prospect engaged especially in a multistep buying process. Similarly, understanding the appropriate moment to introduce an anecdote or customer story to tug on the heartstrings for an emotional connection will greatly impact digital conversion rates.
The need to boost the online insurance shopper's buying confidence is often overlooked. Consumers need an easy-to-understand path leading them to the right product option. Presenting a customer with 14 variations of a product only serves to overwhelm and confuse them. Experience tells us the optimal number of options should be at least three and no more than five.
Similarly, overly complex pricing can create mental strain. For example, when Signal Iduna reduced insurance product and pricing complexity on its digital channel, it saw an 11% jump in online sales for supplementary health insurance in the second half of 2020.
Leveraging data, advanced segmentation and machine-learning technologies, insurers can dynamically tailor content, product recommendations and promotional offers to the visitor based on their insurance needs and where they are in the buying process. Intelligent personalization can lead to higher online conversion rates.
To improve digital selling, insurers must address common obstacles that add friction to the digital customer journey. Lengthy forms and onboarding processes are tedious and mentally taxing. People are also sensitive about sharing their phone and Social Security numbers online, so insurers must question every form field. Using third-party data can reduce the form-entry burden on the customer.
In the digital setting, we no longer have the benefit of the customer's undivided attention. We are competing with real-world and digital distractions one click away. Insurers must be relentless when it comes to minimizing the steps needed to get to the purchase icon.
A fresh look or simplified representation of products online is not a guaranteed path to success. Ultimately, insurers must let customers dictate their purchasing journeys.
Data collected from eye-tracking, click patterns, online account-opening behaviors and other conversion studies can provide answers. Customer purchasing behaviors on an insurer's mobile app may be dramatically different compared to the insurer's website. Research might reveal other insights, including consumer's preferences to buy insurance on certain days of the week or certain times of the day.
Finally, insurers must find ways to integrate the analog and digital worlds. In the Signal Iduna customer study, 20% of customers became aware of the company's insurance products through a human intermediary such as an agent or advisor. To enable a smooth journey across channels, insurers must provide their sales force with a viable path that can end with a purchase on digital sales channels, especially if that is what the customer wants.
Successful digital insurance sales will come to those who can harness digital technologies to better understand customer's evolving buying behaviors, reduce purchase friction, and build satisfying and delightful experiences.
Stephanie Griese is the vice-president of health insurance at Signal Iduna. She may be contacted at [email protected].
Dirk Schmidt-Gallas is the global head of insurance at Simon-Kucher & Partners. He may be contacted at [email protected].
Nick Frank heads the North American insurance practice at Simon-Kucher & Partners. He may be contacted at [email protected].
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