Why don’t people engage with insurance?
‘Insurance is a grudge purchase’. This is the phrase that the industry uses to explain why people don’t want to engage with insurance. But what if I told you that customers do want to engage with insurance and this is just an excuse? Because, while there’s an element of truth to this phrase, it’s not the only reason why customers don’t engage.
The process of purchasing insurance is a chore.
The process of purchasing insurance is painful and needs an overhaul. From a behavioural point of view, the customer experience is focused on getting the cheapest price, which has predominantly been bred through Price Comparison Websites (PCWs). The customer searches for quotes, sees which provider comes out on top as the cheapest and fills out several lengthy forms. If they have questions, they wait in a queue for an answer, only to be rushed by an agent at the other end who is incentivised to keep the call short.
And, once the purchase is complete, many customers are met with tedious follow up and verification checks which can take weeks.
At the end of it, the customer isn’t clear on what they’ve bought or whether they’re even eligible for said policy. Often, this isn’t realised until it’s too late. Time and time again, customers make claims and get caught out because they haven’t fully understood what their policy covers, so much so that regulation has intervened.
Conversational AI is changing this
Conversational AI enables customers to find and understand information about whether a product is right for them.
This is because unlike forms, conversational AI doesn’t have a fixed journey. No customer has the same user journey, creating a truly personalised experience. Rather than sharing blanket FAQ information, the technology can give a very specific answer to a query, removing the ambiguity around the purchase process. Not to mention, it can do this whenever the customer wants, because it’s available 24/7.
A proactive approach
One of the biggest pitfalls of the current model is that when it comes to experience and service, traditional brands are reactive rather than proactive. Conversational AI changes this. The technology can generate a single view of a customer by connecting various datapoints. This has several implications on customer experience. Underwriting, for example, can be done upfront meaning customers don’t need to be followed up and asked more verification questions, saving time, money and creating a better experience. These datapoints can also proactively detect unusual patterns and prompt the customer, to ensure they understand what is and isn’t covered.
Let’s imagine a customer purchasing insurance that didn’t include driving for work purposes, one of the most common examples of when people get caught out. If the AI detects that they work full time and have a higher than average mileage for example, the customer could be prompted.
Not only does this lead to a more informed purchase decision, but also fairer pricing for customers where they’re not over or underpaying. And for providers, it leads to better risks, better claims ratios and more accurate datasets.
At Peppercorn, we’re using conversational AI and natural language understanding (NLU) to drive a seismic shift in customer experience. Will people ever love buying insurance? Probably not. But maybe if the experience changes, customers will at least want to engage with it.
Article by Rob Rushton Peppercorn Chief Experience Officer