Think omnichannel is just a tech industry buzzword? Think again. Insurers are increasingly turning to personalized and omnichannel experiences—providing customers with a seamless experience across any channel they use to communicate: from in-office visits and phone calls to website visits, applications on mobile devices and more.
The benefit of this approach is two-fold: it both attracts and retains digital-savvy consumers.
What is Omnichannel?
Oftentimes the terms cross-channel, multi-channel and omnichannel are used interchangeably, but each has unique attributes and creates a different consumer experience.
- Cross-channel means that a consumer can use two channels to achieve a goal.
- Multi-channel refers to having multiple channels for interaction, but they are not integrated.
- Omnichannel offers the consumer an integrated and seamless experience across all channels.
Why Does it Matter for Insurers?
Some sectors, such as retail, have long been reaping the benefits of an omnichannel presence. Their foray into this realm of sales and brand presence has heightened the consumer’s awareness. There are two main factors motivating this omnichannel trend: the necessity to improve efficiency and distribution, as well as consumer’s digital expectations.
1. Improving Efficiency and Distribution
Due to high overhead costs such as offices and staff, insurers need to maximize their digital channels and, at the same time, use customer data to increase conversions and grow their business. Companies whose omnichannel approach focuses on the customer experience see higher and faster growth levels than those that do not. To provide consumers with a solid omnichannel experience requires a commitment to the regular training employees, properly managing data arriving from various channels and maintaining effective communication.
Economic factors also play into the growth challenges insurers face, meaning that insurers are looking for new ways to generate income. Maximizing the profitability of channels through smarter marketing and sales policies should lead to a higher conversion rate. Automation and digitization will be increasingly important to achieve improved sales efficiency ratings. Technologies related to data analysis, as well as the influence of social networks and mobile technologies, will drive the future of transactions.
2. Meeting Consumer’s Digital Expectations
Demographic changes are a major motivating factor in this shift. Millennials represent the future of insurance and have grown up in a world that allows them to buy products and services instantly through any channel or device. According to a Pew Research Center survey, 51% of U.S. adults have used their mobile device to make an online purchase, and 45% “have used their phones while inside a store to look up online reviews or to try and find a better price online for something they are thinking of purchasing.” This is the new normal for carrying out transactions with any type of company.
If insurers are not able to offer their clients an ideal digital experience when it comes to accessing and managing their policies, many will go to companies that pay more attention to customer experience. A recent report highlights that millennials contact their insurers up to 2.5 times more than other customers through social networks and two times more through mobile. However, these interactions do not necessarily translate into positive experiences. In fact, the satisfaction rating that the millennial generation notes of its experience with insurers is typically lower than that of other clients, which suggests that this generation has higher expectations about the quality of service expected through digital channels.
The behaviors of customers are changing. The use of multiple channels to make a single purchase is quickly becoming the norm and it’s important that insurance companies innovate to meet this new culture. Although digital disruption is already being experienced, the traditional insurance sector must prioritize meeting the expectations of new, digital-savvy customers. An omnichannel model will allow the insurer to maintain its competitiveness, retain its customers and facilitate growth.
Start now, as the demand for omnichannel experiences will be even greater as the millennial generation continues to age into insurance needs.