I propose the following thought experiments for all readers who are also insurance customers. The overlap between these two groups should be approximately 100%. If you are not an insurance customer, you should stop reading, acquire some basic coverage, and then come back to finish this post. Seriously.
Thought experiments:
1.You decide to make some extra money by working as an Uber driver on the weekends. Is your automobile covered while you are actively looking for customers?
2.You received a new drone for Christmas. You take that drone to the local park to practice fly-bys. Your Wi-Fi connection cuts out, and your drone crashes into a nearby home. Does your homeowner’s liability coverage protect you?
3.You visit a local coffee shop for a caramel macchiato. You notice an open Wi-Fi network and connect your phone. You log into your checking account and check the balance. Someone nearby executes a man-in-the-middle attack and steals your credentials. Is identify theft protection buried somewhere in one of your insurance policies?
For most customers, the answer to these questions is “I don’t know”.
This “I don’t know” is dangerous for insurers. First, these complicated questions drive expensive interactions with call centers. Even worse, these ambiguities can lead to denied claims. Denied claims are expensive in more than one way. First, the insurer has to bear the cost of investigating the claims. Second, when the insurer denies a claim for an incident that the insured feels should have been covered, customer experience suffers. Customers who have had an unsatisfactory claims experience are very likely to take their business to another insurer.
Technological changes are steadily transforming the insurance industry. In addition to the ideas discussed above, many other technologies could have a greater impact. Autonomous cars, the Internet of Things, Peer-to-Peer Insurance any many other cutting edge concepts ensure that the pace of change will only increase. Many insurers are taking steps internally to deal with these changes, from adding new coverages for ride-sharing employees to explicitly excluding unmanned aerial vehicles from policies. However effective these changes may be at protecting the insurer, the key point that too many companies are ignoring is the impact these changes will have on the customer experience.
As insurers continue to grapple with technological change, these companies must keep the customers in the forefront of their plans. Competition among insurers will only grow stronger as these trends disrupt the industry. Insurers must make sure that the changes they make to deal with these trends are clearly and quickly communicated to customers. For example, if an insurer decides to exclude ride sharing from their standard automobile policy, it’s critical to inform customers of this fact, and offer them a new coverage to make up the gap. Insurers who fail to incorporate onmnichannel communications into their industry disruption strategy are at risk of creating poor experiences, and driving their customers into the arms of the competition.
