Smart insurers will leverage technology to satisfy rampant consumerism

Gareth Stokes, FAnews Online Editor

Tomorrow’s consumer is more likely to buy groceries online than spend hours traipsing the aisles of a regional supermarket. And they are more likely to complete their “online” transaction on a handheld mobile device (think Samsung Galaxy Tab or Apple i-Ph

A consequence of greater internet penetration (already estimated at 20% of the local population, www.worldwideworx.com) is that consumers are flocking to social media websites. Approximately half of South Africa’s mobile-based internet traffic is attributed to the likes of facebook, twitter and LinkedIn. How should insurers respond to this trend? We recently attended an RGA Client Seminar, where Marilda Kotze, Head of Claims at RGA South Africa, shared some of her views on the role of technology in insurance.

A consumer market with exponential growth

Over the next two or three years South Africa will experience exponential growth in internet bandwidth with the result services will become significantly cheaper and internet penetration will increase. The question insurers have to ask is how best to interact with both “new” and existing clients “online”. A possible solution exists in the social media space, with an estimated five million facebook and one million twitter account holders in SA alone. Globally facebook and YouTube boast in the region of 500 million accounts each, with twitter topping 175 million.

“The majority of people have embraced technology, especially social media, says Kotze. “And nowadays being recommended on facebook or twitter is as good as the ‘word of mouth’ recommendation in the real world.” Insurers understand the value of an online presence, but are not yet sure how to leverage the social media phenomenon to best effect. Few of the country’s major insurers have a facebook presence, and those that do use the account for one-way communication with their customers. “Communication is essential in each step of the insurance product lifecycle, and harnessing social media and other technologies can lower the barriers to communication, keep existing customers satisfied and attract the customers of tomorrow,” she says.

Insurers looking for examples of successful social media strategies need look no further than First National Bank (FNB). The group has more than 100 000 facebook followers and is second in the world in terms of banking communications in that space. Chief marketing officer – Bernice Samuels – is frank about the group’s successes. She is on record that the bank did not create their social media presence to exclude or to change their complaints channel, but rather to feed into their existing complaints channels. Interaction on the various social media platforms feed into the bank’s marketing channels too.

You have to be in it to win it

The decision to participate in social forums online requires a rethink of business processes. It does help to have a presence on a consumer website such as Hello Peter (www.hellopeter.com) if you do not provide feedback on each and every complaint. A sea of unhappy faces (the website uses purple-coloured “sad” faces to highlight consumer complaints) will soon create the perception that your company does not care about its customers. “You have to come back to the public arena to let people know that you have dealt with the problems,” says Kotze. To succeed on social media platforms insurers must continuously monitor user posts, feed these posts into the existing complaints channels, move the complaints offline as quickly as possible and provide feedback to the online community as to how the complaint was addressed.

A breeding ground for insurance innovation

Social media, traditional websites and advanced web-based communication technologies create myriad opportunities for insurer innovation. RGA uses video streaming technologies called GUM and VIDDLER to stream presentations to its stakeholders worldwide. These training videos are part of the group’s Global Underwriting Learning Framework (or GULF). If you want to find out about the industry views on grading versus staging, or the results on an Australian suicide study, you need only install the necessary application and log in to download the video feed.

The group’s automated underwriting solution (AURA) is another example of innovation deployed over the World Wide Web. It is implemented at 28 companies, across 12 countries and in six languages worldwide. Unfortunately automated underwriting has not found traction, despite technology advances. Half of the respondents in the 2011 Global Claims Technology Survey had no or minimal automated underwriting capability. And those that had some functionality admitted that only the simplest solutions had been implemented. “The universal outcome is that there are many shortcomings in claims processing and that the industry has quite a bit of work to do to get up to speed,” says Kotze. By investing in automated claims technology and insurer can improve its claims management as well as its interactions with third parties.

Technology – today and tomorrow

The fact that less than 10% of respondents had automated eligibility and policy checks – and that between 64% and 82% relied on entirely manual process for deciding, requesting, chasing and processing evidence requirements – suggests insurers are not ready to service the needs of their future clients. Kotze asks: Are you going to invest in a claims technology tool – and if not – what will the consequences be?

Insurers must avail of technology to improve both claims notification and the submission of required documents. “You can use the many communication tools on offer to communicate with your customers efficiently and enhance their overall customer experience,” says Kotze. You also have the ability to introduce tailored communications for different stakeholders. The ideal is to have a  sophisticated claims management system that allows consumers to engage in the process and to take ownership of their policy and claim. If they can log in – view their claim – and see what stage of the process it has reached – the pressure on the call centre is greatly reduced too.

“Engagement through technology requires ongoing commitment – you have to have a clear strategy and be committed to make it work,” concludes Kotze. Using social media and other website-based innovations is a steep learning curve, but it is a differentiation factor for your future customers. Insurers must adapt how they communicate, what they communication and how quickly. The warning: By doing nothing you risk alienating your future customers.

Editor’s thoughts: Technology and innovation are driving process improvements across business sectors – and there is not doubt social media will play a role as the trend towards consumerism gathers momentum. Are you using social media to create efficiencies in any of your business processes? Add your comment below, or send it to gareth@fanews.co.za