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by Insurance Nerds on Nov 6, 2018 9:15:00 AM

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When It Comes to User Experience… The Customer is Always Right

by Sean Harper

 

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Insurance lags behind other industries when it comes to using technology to serve customers. This blows my mind, given what we’ve seen in industries like tax prep and investing: a digitized, customer-centric experience that benefits both users and the companies that make those experiences possible.


At Kin, we make sure our customers are top of mind any time we set out to create a product by remembering three key things.

#1: Complexity Can Hurt Your Bottom Line
One of my biggest issues with home insurance is how hard it is to apply for. Most people don’t know off the top of their head how old the shingles on their roofs are or where the nearest fire hydrant is, but insurance applications keep asking for this information and they don’t need to. It’s publicly available.


Insurance companies can scrape data sources like the Census and real estate listings to not only improve the accuracy of what goes to their underwriters but also save time for prospective customers – a win-win.


When application processes aren’t straightforward and simple, applicants get frustrated. When an applicant gets frustrated, insurers run the risk of losing them or having to (literally) pay for their mistakes because of:

 

  • Abandonment. We’ve all abandoned online forms that go on too long or ask too much of us – and our customers will, too.
  • Confusion. If your questions are convoluted or ask for arcane knowledge, customers might just guess. And that can translate to inaccurate underwriting, which could mean major losses down the road.
  • Extra personnel. Your best-case scenario with a confusing app: people call your customer service line. If you want to serve them all, that means paying people to answer all those calls – and those costs add up fast.
     

The good news is none of this has to happen.
Automate what form filling you can, and your customer service team will have more time to talk through application questions that actually require conversation: “What policy do I really need?” “How does my deductible work?” and “What parts of my home need to be insured?” for example.

#2: You Need to Solve Problems Your Customers Actually Have
When Hurricane Irma hit last year, we realized that our customers couldn’t contact us through the usual channels (like landlines) – most of them were evacuated or without power.
So we tried something different: we reached out via SMS. The responses we got helped us prioritize next steps: sending drones to photograph damage and starting the claims process.
The strategy worked. Our efficiency improved 20 times over and our customers’ claims were addressed quickly because they were among the first filed.
And our experience isn’t unique: updating service offerings to focus on the customer is often the best way to increase returns over an extended period of time. According to a study by Forrester, companies recoup $100 for every $1 they spend on a good user experience.

#3: Reducing Risk Costs Money – But Only in the Short Term
You know what they say: sometimes the cheapest way to pay for something is with money.
Proactively identifying and managing customer risks can save bundles of cash and hassle down the line. For home insurance, this means investing in or subsidizing the technology to weed out potential damage.


One illustration of this is wind mitigation. As we’ve experimented with programs to best serve our customers, Kin has offered various incentives, such as connecting customers with a trusted wind mitigation inspector. The inspector evaluates the home’s resilience to wind damage, paying special attention to the roof and how it’s connected to the home. This inspection typically costs a hundred or so dollars, but can potentially save homeowners thousands on their home insurance.

 

Another example is in the healthcare industry. The rise of employer-supplied wearable devices like the FitBit makes it easier to track fitness for employees suffering from chronic ailments like diabetes. This type of foresight encourages activity and decreases the impact of stationary work or other health conditions, driving down medical and wellness costs for businesses by thousands of dollars.

 

This article appeared in Insurance Nerds.