In addition to its 400 retail stores, Direct General Insurance now has 18 kiosks that enable users to quote, bind and buy auto insurance, as well as roadside assistance, emergency and life insurance policies in as little as five minutes. The plan is to roll out kiosks to supermarkets, malls, gas stations, car dealerships and other locations. INN spoke with Jack Campbell, COO, and product management VPs Josh Jarrett and Marc DiGiacomo about the technology, the retail challenge, fighting the commodification of insurance and the importance of following customers.
INN: What problem are you trying to solve with the kiosks?
Jack Campbell: It's not a problem. It's an opportunity. It's about how we solve our customers' needs: the need to spend less money and time. They need access. A lot of our customers are under banked and under insured. They need to pay in cash; not all of them have debit or credit cards. We tried kiosks in the past with older technology, intimidating user experiences and front-end experiences that were just replications of legacy point-of-sale systems. They worked as fulfillment centers, but they didn't work as an agency-stand-alone in a box.
We're looking to be customer-centric in a cost-effective way. We follow the customer. Mobile, internet, phone centers, stores, partners and now kiosks; they all allow retail customers to deal with us in the manner they choose. We've learned a lot from retailers, not just from insurers, about how to manage the cost of brick-and-mortar in this omni-channel world.
INN: You use the word 'retail' more often than other insurers. Why?
Marc DiGiacomo: It's funny. The insurance industry spends $8 billion a year in measured media; they sell things to the public and don't think of themselves as retailers in any way. But we are trying to solve a lot of the same problems the retail world is working on.
INN: Who are your technology partners?
Josh Jarrett: Meridian. They do self-service kiosks for a lot of retailers. We did a lot of due diligence, but it came down to someone who could help us put hardware in a box. We wanted it to be specific to a kiosk and not just a website. We have a mobile site and a regular desktop site, and the kiosk is a completely different point of sale.
INN: Do all those integrate with the same back-end systems?
JJ: Correct. The back end is pretty much a homegrown AS/400 system with a bunch of recently developed APIs. It's a 20-year-old system with a lot of customization.
INN: How does it help the company from a tactical vs. strategic level? Operational vs. competitive?
MD: Auto insurance is very commoditized and the marketing is saturated. So having kiosks does a lot for our having a local presence and brand awareness. We have 400 stores and this gives us a way to be out there and even more visible. You've probably never seen a TV commercial for that movie rental box or that huge coffee chain, because everywhere you look, there they are. Kiosks offer a lot of potential for brand recognition.
JJ: We view it as advertising. Rather than spend all of our dollars on mass media, the kiosks could offer a gift card to whoever completes a quote; and the card could be tied to the retailer the kiosk is sitting in. It's just another approach to get traffic over to the kiosk.
JC: We want to find high-quality partners that service a similar customer segment. We can work together to fulfill more of those customers' needs in a sensitive way. Maybe it's a title loan organization, or a mall; we can make a lot of win-wins rather than just spending on advertising. We are confident enough in our pricing that if we get enough quotes, we will be able to write business.
INN: How do you quantify the ROI on a project like this?
JJ: We know what our stores cost. We can break it down to a P&L expectation as far as what we would need in terms of quotes and policies; so we know how many policies we need to write to break even and start generating a return; also how many payments it could take and how many marketing impressions it would generate.
JC: The software on this kiosk can identify when people look at the kiosk. That helps us with placement and it helps retailers understand their customers and where the customers flow. This will help us lower the cost of servicing, delivering and acquiring policies. We ran a whole set of sensitivity analyses to see what type of scenarios it takes for a good ROI. It seemed to generate one without extravagant assumptions around growth.
JJ: We don't have to sell the policy on the kiosk. Let the person get a quote on the kiosk and go inside one of our stores to buy the policy.
MD: We have the ability to track things at that level. We can tell where it was quoted and see if they started on one channel and picked it up on another and bought it on another. We can tell when a kiosk is providing lift, even if sales are coming over the phone, the Web, a mobile phone or one of the stores.
INN: You know when people are looking at it?
JJ: Yes. It's a technology provided by Intel. A camera on the kiosk identifies when people make eye contact with it, and we count it as an impression. But there's no facial recognition, it's not storing anything.
JC: It doesn't have facial recognition and prefill. Yet. There's a TED video that shows 20 percent of the population is recognizable by their face. As an insurance company, we could get your MVR, your driving history, the vehicles in your households, all of that, from a picture as you walk by. It's a little scary. But we are not doing that now.
JJ: Mobile, self-service, kiosks, digital signage and the point of sale - it's all going on at once. And this taps into all of those at the same time.
INN: What kind of feedback are you getting?
JJ: So far, we are getting a tremendous amount of positive feedback. Our agents are showing people what it's all about, especially in those areas where there is a younger demographic, they are pretty enthused.
MD: The software and the front-end experience are all new and designed around the kiosk experience. There was quite a bit of focus-group and hands-on user-experience testing. One thing that made us happy was hearing the kiosk described as an 'insurance store in a box.' Now we call it that ourselves.
JJ: Roughly 70 percent of people still prefer an agent, and there's a phone on the kiosk so they can get assistance at any point. From the get-go, we had a goal in mind of giving an accurate quote within 60 seconds. So far, we've had a customer get a quote in 62 seconds and a policy in less than five minutes.
MD: A lot of quick quotes are estimates. They default. This uses prefill technology; we call it the 'lightening quote,' and it can go straight to bind.
INN: What are the integration points?
MD: Prior insurance, credit scoring, if you have current insurance, what your limits are; we set that up so you don't have to rekey anything. All the driver and vehicle information, all that is coming from data calls. All the customer has to do is confirm that it's accurate. Or, to the extent something needs to be changed, it's entirely possible a user could swipe their drivers' license, get a quote and go straight to bind.
INN: You're selling more than just auto insurance through them, too?
JJ: We also have a low-limits term life product, a roadside product and a travel product. In term-life insurance, we are the fifth largest insurer in the country.
JC: We sell term life to 30 or 40 percent of our customers, who tend to be unbanked or financially challenged. We sell with very low limits: $10,000. Sometimes that's all they have if something calamitous happens. Some of our vendors were excited about doing this because so much of the state-of-the-art work goes to the upper class. But we are among the first bringing this level of innovation to those customers who need it the most. Time is so valuable when you're working two jobs. Anything we can do to pull time out of the process is going to help them.
