A Key Misconception on Digitization

Andrea Masterton, June 7, 2016
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The insurance industry knows today’s customers are ready for digitization. It knows the expectation for anywhere, anytime responsive service is dictating how customers choose service providers. But are insurance professionals stepping up? Based on what we are seeing, they still need some convincing.

How often is the digital path chosen?

An interesting trend emerges when we look at technology that enables digital insurance, namely e-signatures. E-signature adoption rates approach 100% in unmediated channels, including online portals. As processes become mediated, though, especially in the hands of captive and independent agents, adoption declines.

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How do we explain this behavior when we know customers want to transact digitally and are doing so when managing transactions on their own? The answer is the belief by many captive and independent agents that digitization implies self-service, compromised personal attention and less of a role for agents to play in the transaction.

We have seen enough e-signature implementations to know that the key to high opt-in rates, especially among independent agents, is change management.

Managing digital change to get the highest agent adoption rates

Here are some of the ways insurers can manage the transition to digital insurance and ensure agents adopt new technologies:

Involve key stakeholders early

This is obvious, but it’s a practice that is not always followed. Early involvement from select agents or staff members, for example, will ensure that their feedback is captured and accounted for and that they will then have more personal investment in the success of the project. It also gives the project more credibility when key stakeholders are on board.

Gain executive buy-in

It is not uncommon to encounter resistance when moving processes off of paper into the digital domain. Legal concerns may arise; perhaps IT will weigh in, and other lines of business may voice apprehensions. Without executive commitment, initiatives can get sidetracked. To gain that buy-in at the executive level, it’s imperative to focus on the business improvements the technology will bring.

Implement e-signatures in phases

It’s best to start with a smaller, hand-chosen group of early adopters – your technology evangelists. Get them using the new solution, gather feedback and tweak processes if necessary. This is your opportunity to recruit champions and advocates, and to document testimonials that will be helpful in your communications efforts to roll out the project on a larger scale.

Provide comprehensive training

This can be as simple as watching tutorials, but, in truth, nothing beats hands-on practice. Training should be designed for staff and agents in a way that allows them to gain comfort in the new process. You can create an operational sandbox account for your users so, when they are in front of a client, the process is practiced and smooth.

Offer incentives

Incentives can be very effective in gaining rapid adoption and helping to ease learning curves. Gamification is a new trend that lends itself nicely to training. As an example, insurers can award points for every new business application submitted electronically and offer reps the ability to redeem points toward prizes. By delaying the eligibility for rewards and incentives until after a specified number of transactions is attained, you can ensure the initial learning curve hump is overcome.

Communicate a lot and often

People need advance warning when big changes come, even if they’re good changes. Anticipate questions and answer them in advance. Make the process personal. Provide real examples of how it will help individuals in their day-to-day jobs. Don’t focus on the benefits to the company but rather emphasize the time saved, the convenience factor for both agents and their clients.

Use testimonials from the champions you recruited during your earlier phase rollout to help encourage adoption.

Show the value of metrics

Monitoring and leveraging analytics from transaction data is a convincing way to maintain executive support for the new, digitized process.

The "on-demand" customer mindset is changing the insurance business fast and fundamentally. A recent poll of insurance providers and insurance brokers shared at an industry event revealed "digitization" as the top response to major industry game-changers (or threats). Are you ready? This article first appeared in InsuranceThoughtLeadership.com