Insurance digital distribution is the strategy of delivering, accepting, and providing insurance products and services through digital means and on multiple channels. This could be a web portal, web apps, mobile apps, and more. Digital distribution could encompass all of an insurance provider’s product experience or some parts of it.
The adoption of digital means of distribution came quite simply because customers were increasingly moving into a paperless world and even preferring to conduct their daily life errands through mobile or web applications.
Digital Distribution is Quietly Revolutionizing Insurance
On the flip side, Insurance Companies have been providing extremely competitive products on the market, but have notoriously been behind in digital channels when engaging with customers. The pain for customers has been exacerbated by Covid-19’s restrictions on in-person meetings and lockdowns in 2020 and 2021. A May 2020 survey by McKinsey showed that almost 50 percent of agents in the United States cited remotely building new customer relationships as the biggest challenge during COVID-19.
Self-service tools have increased exponentially since the COVID-19 pandemic and highlight the increasing role of digital in the insurance business. Insurers are encouraging agents to conduct business online and push platforms to adapt to changing needs.
However, customer satisfaction depended heavily on the ease of use of these tools and hard-to-use and access tools. As a result, customers have quickly shunned any tools that were half-baked and simply knee-jerk reactions to the pandemic.
So, clearly just existing on digital channels is not enough. Digital distribution in insurance is indeed a revolutionary innovation and must be both taken seriously and end-to-end.
Digital Distribution Accelerators
In general, there have been digital distribution platforms for insurance companies, even before the pandemic, but the demand from insurers was quite low as the status quo was acceptable. However slowly as new insurance players entered the market, the competition was soon soaking up clients who sometimes only existed in digital channels.
Engagement through social media, leading to the client downloading an insurer’s mobile app, and then applying, onboarding, and managing their policies and claims only via their mobile phone is one of many digital-only workflows that insurers need to bring to life in order to compete in the industry.
In the past, insurance companies have been able to sell their products through a variety of channels including direct sales and agents. However, with the advent of digital distribution, this model is changing dramatically. As consumers become more comfortable buying online, insurance companies are finding that they can increase revenues by offering new services such as mobile apps, web portals, and social media platforms.
In a sense, as other services and goods are more or less 100% digital nowadays, customers have gotten used to a culture of convenience brought on by digital transformations among many industries, with insurance finally starting to catch on.
Data and Analytics
There is a goldmine of data and user analytics that insurance providers can unlock simply by putting into place digital customer-facing channels. Basic user tracking can already improve a company’s ability to improve customer attraction and retention, and many insurance companies have warehouses of past user data they can lean on as well if it was simply organized and given the data-science treatment.
Insurance companies can use specific trends in their customer’s experience online like understanding how long a customer needs to be on the website before they buy, understanding which external channels drive customers to download their app, and so on. Insurers are starting to invest in building a digital presence by using big datasets to learn from customer behavior and improve their products and services.
Pairing past data with user behavior captured through the many channels an insurer is active on gives a more full user journey perspective that they might not have had before if they haven’t used digital distribution or digitilized their distribution.
For instance, if a customer is looking for life insurance or health insurance, an insurer can determine what this person might be looking for even before they fill in their first online form. Using cookies and adequate advertising platforms an insurer can have ads follow users who abandoned a product application with discounts in a bid to bring back this customer. Creating a WhatsApp business account for users who prefer texting over email, post, and phone calls will get on their good side early on in their customer journey.
These are just some of the many ways digital distribution can help insurers connect with their customers better.
Successful Digital Distribution
The sheer availability of tools and tech coupled with their decades of experience working with similar enterprises makes technology companies ideal for driving this revolution. Simply put, the right tools help bring agents closer to customers. Once the sale is completed, customers will also feel more connected to their insurer, and of course, the insurer will find it easier to engage with its customers. Simply existing on a customer’s preferred digital channel, possibly one they use every single day, already puts the insurer at an advantage.
However, a poorly designed experience can shun customers away from using these tools. It may also lead them to churn to another brand.
Insurance Technology companies, or InsureTech, often take a holistic approach to digital distribution, among other software as a service, so that insurance companies can make the leap to digital innovation without disrupting their current systems and products too much.
With numerous ways to distribute on sometimes very competitive digital channels, it’s essential for insurers to select the right mix that engages their audience. It’s key for insurers to understand their customer segments and then to further understand which channel(s) that segment might be found online.
Selecting the right tools can only be successful if your company has the expertise to use them effectively as well. With this many advances in technology, insurers can create an experience tailored specifically to each customer or segment they’re targeting. That means insurers will need to become experts at operating in these digital channels.
Simply existing on channels where your customers are is a great first step, but if there is competition on these channels as well, it’s a whole new battlefield with a whole new strategy behind it, and understanding how to use technology tools that bring these strategies to life is just as important as selecting the right tool in the first place.
Innovating with Digital Distribution
The difference between a stagnating company and an innovating company can be hard to spot from the outside. But, in reality, it’s pretty easy to tell. A stagnating company doesn’t adapt to changing times. They just sit back and wait for things to happen. Even if a company improves its products, services, and pricing, it’s clear that organizational and business model trends also impact how a company succeeds. A company can still create one of the best products on the market, but if they cannot satisfy customer demand for a digital-first experience, or even bother to reach them on channels they prefer, it still makes this company very stagnant.
An innovative company, however, is constantly adapting to new challenges and opportunities. They make adjustments to their business practices and processes so they can continue to thrive in today’s competitive environment.
Regardless, a complete overhaul and minuscule product add-ons are often wasteful and inefficient. Instead of replacing an existing system, insurers, thanks to an insuretech revolution, have the option to adopt new platforms that can be integrated into their existing infrastructure. Products like CoverGo often meet the mark when it comes to this front-end overhaul that sates customers’ desire for a digital insurance experience without making the insurer bend over backward for such an innovation.
Platforms like this can help insurers deploy product offers on third-party marketplaces for a digital embedded insurance strategy, engage directly with clients through web chat, deploy mobile app-driven applications and claims submissions, and many more key features that insurers either lack or are lackluster in providing.
Whether ancillary products are added all at once or individually, in a modular fashion, your new system does need to be able to handle the distinct differences and requirements for each type of product. Obstacles no doubt rear their ugly heads, but the right partner can help make this process quick and easy. Platforms like CoverGo can help transform insurers in as little as a few days.
A Modular Approach to Obstacles
Dental claims process differently than disaster claims, which are also handled differently than vision claims or life insurance claims, or property & casualty claims. Legacy insurance platforms aren’t equipped to handle any of these claims, at least not quickly enough to be competitive in a quick-changing digital market. Oftentimes, legacy platforms are built around the efficiency of a few core products, which can then be automatically adjudicated.
However, without the key factor of being able to quickly adapt to the market and build products quickly, plug them into channels and invest in their circulation, automation means very little since everyone is already doing it as well. Even if a certain type of claim is relatively easier to handle for an insurer, it just means that any competing insurers are also finding it easy to innovate around that product type.
If an insurer can’t quickly distribute their product digitally, however easy or hard it is to handle those claims, it is destined to fall behind the competition that can distribute.
Modularity allows insurers to quickly build products around obstacles, rather than customizing their legacy system from the ground-up, an often timely and painstaking process. By using modular platforms, the manifestation of innovation can take your business processes in different directions while still integrating with any databases and systems still existing. And if it wasn’t already clear before, modular platforms also make it so insurers can quickly adapt to changes in the market.
Customer Experience at the Forefront
We can drone on forever about features, modules, and strategies that surround digital distribution success, but no matter what, it’s all supposed to impact the user’s experience with an insurer. Regardless of what products an insurer offers, it’s essential to keep the same level of positive user experience at every level of the user journey, from web app, mobile app, online form, SMS messaging, platform frontend, email, and other areas of your customer-facing ecosystem.
Adopting a digital experience as a framework like this manages the flow of users, data, and transactions via APIs between internal systems and user interfaces. A platform that enables richer omnichannel experiences would include making sure that any communication channels (mobile apps, websites, etc.) can be managed within one interface, so they adapt seamlessly across different touch points.
It’s hardly a risk
Insurers, understandable by their nature of being insurers, are risk-averse. Compared to how insurance technology behaved in the past, often twisting the arms of insurers to risk the money and time required to go digital, there is some hesitation to dive into this new generation of insuretech modular platform. However platforms like CoverGo, by being modular, are just that, a risk-averse option for insurers to innovate without ground-up show-stopping transformation.
By enabling existing systems to live alongside new product modules, a new frontend, and other great digital goodies, insurers can quickly innovate in one area and see if it’s for them before pulling the trigger on an organization-wide change. insurers can also innovate slowly, one module at a time if that’s their preference.
Innovate or Die
The disruption that digital has caused to industries across the world is seen every day by the very same customers who need insurance. Insurers who let their risk-aversion mindset keep them from innovating are, in fact, putting themselves at grave risk of losing out to new players or new adopters of digital distribution. It’s simple as that.
Are you an insurer looking to innovate and get into the world of digital distribution? Request a demo with the experts at CoverGo, and we’ll show you exactly how our platform is helping some of the biggest names in insurance completely transform their business without changing their current systems. With over 500 APIs in our arsenal, CoverGo is one of the most flexible insurance platforms in the world.
