Technology is the key to empathy in insurance

Insurance must bring back empathy to close the life insurance trust gap.

Most insurers cite customers as their No. 1 priority and many reference their customer-centric mission statements that, in some cases, date back more than a century. However, one look at social media and recent news stories reveals that customer experience is still a sore spot.

• D. Power’s 2024 U.S. Individual Life Insurance Study found that only 29% of customers say their insurer makes complex policies simpler, and fewer than three-fourths say their policy completely meets their future needs.
• LIMRA and Life Happens’ 2024 Insurance Barometer Study found that only half of American adults have life insurance, while 42% say they need or need more life insurance.
• EY’s 2024 Global Insurance Outlook reported “historically low levels of customer trust” in insurance.

All this reveals a significant disconnect between insurance and its core purpose of being a financial safety net that supports policyholders during difficult times.

The solution? Technology.

Turning to an intangible and nonhuman tool to reinstate empathy within the industry may sound counterintuitive. But the truth is that technology can reaffirm the insurance industry’s commitment to supporting consumers by enhancing customer experience. The fantastic work done by advisors, service representatives and everyone who encounters clients continues to be vital. However, it’s through streamlined processes, improved analytics and diversified communication channels, that distributors can make great strides in helping policyholders once again trust their carriers to support them when they need it most.

Technology can reform manual processes, freeing up agents to focus on policyholders.

Life insurance agents and financial advisors often must juggle multiple responsibilities, such as attending and leading client meetings, doing paperwork, completing certification programs or trainings, lead generation, prospecting, and more. This means that effective time management through optimized processes is essential. However, many life insurance carriers are still reliant on pen and paper. When there’s an important event in the policy lifecycle — such as gathering quotes, binding the policy, making changes or filing a claim — there’s often a mountain of paperwork to accompany it.

Although these documents and their information are important to effectively serve policyholders, the hours advisors spend filing forms takes valuable time away from supporting their customers in their hour of need.

That’s where technology comes in. Life insurance carriers can demonstrate their commitment to superior customer experience by simplifying the underwriting and claims process using electronic applications and forms, and making it as seamless as possible for brokers and policyholders.

The right technology can help carriers better understand and tailor the customer experience.

Today, legacy style carrier-policyholder interactions aren’t enough. With the advent of streaming services, consumers can access libraries of content tailored to match their viewing preferences. Other financial services industries have also caught on, creating fast-paced, on-demand experiences for consumers. A simple check-in email from an insurance carrier every few months leaves much to be desired for consumers who are losing faith in the industry.

Additionally, advisors often work with hundreds of clients, and carriers service millions of policyholders, making it nearly impossible to send individualized outreach emails or touchpoints. But with the help of a strong customer relationship management solution, advisors and enterprises can spend less time maintaining data and more time engaging customers.

When seamlessly integrated with an organization’s streamlined core systems, carriers and advisors can use technology to extract trends and leverage them to help generate potential touchpoint communications. This takes some of the administrative burden off advisors’ shoulders and allows them to redirect their focus to customer support.

Technology-enabled outreach is especially important today as financial literacy in the U.S. remains low. As a result, clients may be unaware of the different insurance products available and how they can be used to best support themselves and their loved ones. By leveraging specialized CRM software to stay connected to clients, advisors will have more time and opportunities to discuss what other insurance products are available to support policyholders’ specific needs.

Diversified communication channels are a must.

Life insurers must meet clients where they are. These days, advisors aren’t meeting with only one type of consumer - they’re dealing with customers spanning multiple generations and walks of life. As a result, a one-size-fits-all approach to customer outreach won’t be sufficient. A phone call may be preferable for older generations, whereas Generation Z and millennials may be more receptive to text messaging or in-app correspondence.

To effectively support all policyholders, life insurance distributors must have interconnected and diversified communication channels that are tied to their core back-end systems. These channels can offer valuable insight into customer behavior that advisors and carriers can use to further improve and tailor the customer experience.

Omnichannel communications are also especially important in today’s bustling environment. According to a 2019 survey by the CDC, Americans 15 years or older have an average of five hours of free time per day. When presented with the opportunity to use that time to socialize, attend sporting or entertainment events, volunteer, participate in religious services or travel, it’s unlikely that they’ll choose to use that time having lengthy conversations with financial advisors, whether it be in-person or over the phone. Insurance distributors can demonstrate their dedication to providing a flexible and accommodating customer experience by offering clients multiple convenient ways to get in touch.

Empathy is integral to the customer experience.

Empathy, at its core, is about understanding. It requires carriers and advisors to put themselves in their clients' shoes and see things from their perspective. Although empathy is crucial for building relationships, the work that advisors and service staff do to build trust is too often eroded by manual missteps in client-carrier workflows.

However, the integration of technology into insurance practices can help carriers deliver on their founding customer-first mission statements. With streamlined administrative tasks, more communication channels, and improved CRM and data analytics, insurance carriers have the opportunity to significantly build their clients’ trust. The use of technology allows insurers to carve out time for more engaging and individualized interactions, fostering stronger and more trusting relationships between policyholders and carriers.

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Brian Carey is vice president, insurance solutions engineering, of Equisoft. Contact him at [email protected].