Insurers should adopt user-first, omnichannel approach to improve insurance – report

By Zainab Iwayemi

All around the globe, organisations are fast co-opting technology into modern strategies to facilitate business activities. Seemingly, insurance firms have joined in the race to expand product offering channels through digitalization to improve services rendered to customers.

Property and personal insurance products are increasingly being purchased through digital channels. According to a Mckinsey report, one in four motor insurance policies is sold online in Germany. The increasing pace is however heightened by the outbreak of COVID-19 pandemic, which has further accelerated the number of people that transact remotely using digital platforms.

In an October 2019 report, 38 per cent preferred sales of life insurance through a digital medium. However, a second tranche of survey which was held after the first few weeks of the lockdown revealed a surge in the number up to 54 per cent.

Over the past few years, lessons have been learnt; traditional insurers are well aware of how their peers in the banking industry lost some of the customer interface to new entrants such as PayPal and TransferWise. To avoid a repeat of the same fate, established insurers are investing hugely in taking their businesses digital especially as new, purely digital insurers, or insurtechs, have entered the market.

Adopting the user-first, omnichannel approach

Coronavirus has taught everyone that to remain in business, traditional insurers need to adopt a user-first, omnichannel strategy. To effectively implement this strategy, there is need for insurer to first focus on the customer journey that is enabled by selecting technologies and organisational capabilities which could be achieved by prioritising three elements: availability of online purchasing capability, ease of navigating online customer journeys, and seamless integration of sales support and advice capabilities.

The insurance primarily relies on face-to-face interaction for purchasing, which translate into a steady increase in the insurance industry even though several carriers and agents have made incremental progress in their efforts to digitize their business models.

However, the COVID-19 pandemic has driven many business models that relied heavily on direct human interaction online. This could be seen in the telemedicine industry – telemedicine players are flourishing and proving that doctors can diagnose patients online.

Similarly, the financial services sector is seen to be making progress. The sector has successfully digitized complex products and customer journeys, such as applying for mortgages or signing up for brokerage accounts or investment advisory services.

According to McKinsey’s survey, one in two customers seeks advice offline before purchasing an insurance product. As a result, most insurers now have some type of lead routing from their landing page to their offline.

While it is assumed that personal advice necessarily has to be delivered in person for effectiveness, experts need to make available, advice to help customers navigate the several options. Also, trade-offs products need to be simplified and transparent while product information improved upon.

To ensure smooth navigation, it is important for insurance to enable speed of the insurer’s website, quality and performance of the landing page, and quality of user experience across respective product journeys.

While experts and those that are well acquainted with insurance matters have oftentimes, submitted that the insurance atmosphere in Nigeria requires digital skills to help speed up the rate of transformation in the industry, as well as increase insurance penetration, stakeholders patiently awaits NAICOM’s decisions as the year unfolds its potentials. Will NAICOM shake off the shackles of recapitalization which has held it down for long and blinded it from grabbing yet opportunities right under its nose? Well, that is left for the remaining days, weeks and months left of 2021 to decipher.