Much of what we see, say and do is powered by digital, and that is spurring rampant change for all industries, including the general insurance market. While most insurers are approaching digital by investing in self-service Web portals and belatedly embracing customer-facing mobile applications, many of these initiatives are falling short when it comes to engaging consumers in their digital moments.
By leveraging social media and messaging apps, however, here’s how insurers can turn digital to their advantage:
Understand the environment.
Most of today’s insurance customers and employees are millennials, who use social, mobile and persistently connected technologies more than any other demographic group. At the same time, insurers must realize they will likely never achieve the same high levels of adoption with their mobile apps and Web portals as other industries, such as banks. Consumer needs are different in insurance; the transactions are more complex, and servicing needs are more intense.
Thus, insurers need to take a different approach, assess the customer’s daily use of platforms, and adopt any and all viable channels to improve engagement.
Assess the future.
Thanks to the exponential rise of digital in most businesses, numerous platforms exist for insurers to engage consumers and employees. These include online, mobile, social, wearables, digital TVs, kiosks and other sensor-enabled devices. Of all these options, social media and messaging apps (often accessed through mobile devices) are by far the most popular (at least among millennials), since they touch most aspects of a consumer’s social life.
Witness the huge interest by enterprises in these apps, which include Facebook (acquiring WhatsApp), Rakuten (buying Viber), WeChat’s owner Tencent (investing in Kik) and Twitter (launching an enhanced messaging product last year).
We believe social and messaging apps hold equal potential for insurers, particularly with feature sets that include the ability to share text, audio/video messages or locations; facilitate group conversations; and enable less expensive voice and video calls (both one-to-one and conference calls). As app providers continuously expand their services, these digital platforms will become an alternative distribution channel for insurers, providing them with immediacy and greater reach to customers.
Examine further business value propositions.
Additionally, social and messaging apps offer further business value to insurers. For example:
They are less expensive than other apps. Because there is no need for a separate platform, development costs are lower. These apps are also compatible with different mobile platforms and thus obviate the need for a platform-specific development approach. Branding costs are also minimized because customer awareness is already high. Further, the platform and its features are managed by the app vendors, keeping maintenance costs low.
They are easier to set up than mobile apps. Social and messaging apps are platform-independent and require only the user’s mobile number to be integrated. Insurers are already collecting this data as a part of new business or servicing initiatives. Social networking, however, does require the social handle and friend acceptance from the user – which many insurers are already seeking for other purposes, such as giving discounts and other value adds.
Pre-built capabilities and software can be leveraged with minimal customization. The vast number of collaborative features provided by messaging and social networking apps enables insurers to carry out several mobile sales and servicing functions quickly and effectively. Most of these apps have a gateway API through which insurers can integrate their back-end systems and technology.
Creating the Strategy
To optimize their current investments in social, messaging and mobile apps and portals, insurers should start by analyzing the relative merits of the capabilities supported by different channels across online, mobile, social and messaging. They should then map these findings to stakeholder needs and then craft a cost-effective integrated strategy for each stakeholder group aligned with the overall business and IT objectives of the insurer.
The figure below depicts a representative functional decomposition across online channels based on the costs/investment required and the complexity of the transaction.
Similar to the retail and hospitality industries, insurers should recognize the importance and untapped potential of social and messaging apps for enhancing the customer experience. Organizations that choose to ignore this important trend will ultimately fail to connect with the majority of today’s — and certainly tomorrow’s — general insurance customers.
For a deeper examination of the stakes along with detailed graphs and notable examples of early successes, please read How Insurers Can Leverage Social and Messaging Apps to Enhance Digital Value or visit the insurance section of our website.