MetLife Auto and Home had a problem: The company wanted to increase the amount of auto insurance policyholders it acquired through its relationships with employer groups on dental and life insurance products.
But the process wasn’t nearly as simple as selecting a dental insurance price from a menu of options. Even though the outreach and acquisition is through a group, auto insurance policies are the same individual contracts one would acquire in the standard marketplace. That meant if employees were interested in getting a preferred rate, they still had to complete the standard application for insurance, which involved about 50 data points.

“We wanted to take advantage of 20 million eligible customers in our universe, and auto is the biggest thing we offer,” says Scott Kuczmarski, senior vice president of the group business for MetLife Auto & Home. “But what’s the problem? Dental is price ‘A’ or ‘B’, and auto has a thousand questions. So we thought: How can we more effectively communicate?”

Kuczmarski and his team realized that when it came to auto insurance, there were three key things that consumers are looking for:

The first is cost. In an increasingly commoditized auto insurance industry, it’s hard for insurers to get prices much lower than they already are. But that was the point of the group insurance strategy: Just by being a member of an employer group, a prospect’s risk profile was softened

Next is convenience. “No one wakes up saying, ‘Yay, I get to shop for auto insurance today!’” Kuczmarski explains. But if it’s offered through the employer, especially during benefit renewal when employees are thinking about insurance in the abstract anyway, there is an opportunity to take advantage of that awareness and drive purchases, he says.

[Buying insurance: Then and Now]

Finally, consumers want confidence that they are getting a fair deal. “They don’t want to know the nitty-gritty of how we get at the number, they just want the number,” Kuczmarski says.

In a world where click-to-buy is a reality for all sorts of products, prospects were already being asked to pick up the phone or fill out an online application for insurance that involved dozens of questions. Process abandonment had to be reduced.

Forging a new path

The solution was Xcelerate, a proprietary technology project that MetLife Auto & Home introduced earlier this year. The company tied together several of the data sources it already had access to – not the least of which was the customers’ name and address information, since he or she was already a member of a group policy with the company – and the same data sources that had to be pinged to validate the information anyway.

These include the various state motor vehicle record bureaus and the national CLUE (Comprehensive Loss Underwriting Exchange). Armed with that capability, MetLife is able to pre-fill most of the demographic information of the prospect who indicates interest in getting a quote, with that consumer asked only to make changes if information is incorrect. Then, once submitted, the company accesses the data bureaus via API and comes back with a quote in a short time.

“At a minimum, it takes the process from 20 minutes down to two,” Kuczmarski says. And the carrier was preparing for it to be longer than that: MetLife Auto & Home experimented with playing videos during the wait period, but the waiting time was so short much shorter than expected that the idea was abandoned.

Originally, MetLife planned to prospects to supplement information that it couldn’t get from data bureaus or group information with a short questionnaire. The idea was that giving customers a quote without asking for more information than a confirmation of their name and address could backfire if the end user didn’t believe it was sound.

“Convenience and confidence can contradict sometimes,” Kuczmarski says. “If you don’t give enough insight into the process, people don’t believe that you’re doing it right and they are hesitant to pull the trigger on a final purchase.”

But rather than turning to an input mechanism to enhance consumer confidence, MetLife decided to stick with its original plan of asking for confirmation of data rather than switching the experience up. Now, on the way to confirming a quote, consumers are asked to review some more information about their cars and drivers.

That still left the matter of the information that the company had traditionally asked, which was unanswered in this new paradigm. But a funny thing happened when MetLife reviewed its rating system: It turns out they didn’t need that data after all.

“We re-engineered our rating algorithm to blend what’s available with the reports, and anything you can’t get publicly, we cut out,” Kuczmarski says. “When we looked at the predictability [differences] it was so minor, the convenience trumped segmentation.”

Breaking out

Auto insurance is an easy nut to crack because the kinds of data that are needed to write a policy are relatively easy to find and analyze in short time, Kuczmarski says. But for other lines of business, like homeowners insurance, there’s a lot more that has to be collected, and a lot more nuance. Yet, customers still demand a shorter process, and an Xcelerate-style process might not be that far off.

“I know there’s a company trying to stitch together all the municipal databases [that are needed for homeowners insurance] out there,” he says. “They have a pretty fair amount of the country covered. Once it’s gets to 85 or 90 percent, we can start to look into it.”

For life insurers, the application process is famously long and arduous, with an entire medical exam including blood work required for coverage. But as big data proliferates, less invasive means are emerging that allow life insurers to underwrite policies confident in the mortality risk. Lincoln Financial Group chief digital officer Tricia Blair, like Kuczmarski, is keeping an eye keenly on the data service market.

“There’s a component of this business that’s looking at all this unstructured data that’s in the marketplace” and seeing where it could go, she says. “We’re definitely aware of and monitoring those types of technology solutions, looking at what applies to our processes and correlating that with consumer behavior and what we think people will and will not accept.”

In the meantime, Lincoln has made major steps in taking some time out of its application process. But it’s not just about cutting out the company’s stable of financial advisors. Nathan Brown, VP of new business technology, says that the company’s distribution force is just as adamant about making the process easier on their customers as the customers are at having an easier process.

“If you think about an new customer sitting down with an advisor talking about a need, they’re expecting the process to get easier and faster – a 45-minute meeting is not their expectation, they want something a lot faster than that,” he explains. Even other financial services disciplines, like lending and investing, are taking time out of the onboarding process, Brown says – and that’s not even counting the interactions with the fastest retailers.

“[Producers] are a very good voice for the expectations of the consumers and helping understanding the need for innovation and driving change in the process,” he continues. “A lot of the ideas we get on simplifying the process are things that they identify and bring to us.”

Lincoln has moved away from asking producers to walk customers through a full application to what the company calls a ticketing system. Before, an advisor would ask a customer an entire series of questions – and certain questions would beget other questions if answered a certain way, making the process unpredictable.

Now, the advisor collects some key demographic data, then ships that data off to a call center where that data is used to call APIs at major data bureaus and are correlated with the medical information that would’ve had to confirm the information anyway – similar to the MetLife approach for auto insurance.

“We are ultimately getting the same amount of information, but in a way that is most convenient for the consumer in the way that we collect it,” Brown says. Distribution partners have been instrumental in developing the call centers and identifying the kinds of data they want the centers to go after as well, he adds.

“These call centers are basically just completing that life insurance application,” he says. “It is about making different options available to the advisor and the consumer in terms of the way they do business.”

More to come

This is likely just the beginning, especially in the life insurance industry where middle-market penetration is low and consumers are general underinsured. Even though a quarter of consumers surveyed by LIMRA and the Life Insurance Foundation for Education (LIFE) think they need more life insurance, more than twice that many have no plans at all to purchase life insurance in the near term. While cost is cited as the largest barrier to purchase, significant portions of respondents to a 2014 survey said they felt they “wouldn’t qualify for coverage” (19 percent) or simply “hadn’t gotten around to it” (30 percent).

With a long application and full medical exam waiting for those customers that do show up, the industry is working hard on making a better initial impression by leveraging emerging technologies.

“There’s this whole concept of the growing use of sensor technology that we are all experience as consumers in the marketplace,” Blair says. “As an industry we are all exploring how to best leverage sensor technology in relationship to defining a better customer experience – but we’re really in the early stages.”

[Ed. note: Shortly after this interview was conducted, John Hancock announced an initiative in which it will offering life insurance premium discounts if a policyholder uses an insurer-provided FitBit device.]

Even if things like blood tests are still required in the short term, there are less invasive ways to get the needed information coming down the pike, Blair notes -- especially in the medical device industry, where a focus on lowering healthcare costs is driving innovation.

“Startups are working on things where customers can just walk into a pharmacy and prick” their finger for a little blood and get the same information from a draw,” she says. “These are potential game-changers in any industry, and we do have dialog with various startups through venture capital relationships to stay abreast of what they’re doing and what the business plan is.”

[6 Insurance Startups to Watch]

But it all comes down to listening to what customers are comfortable with, and marrying those findings with available technology solutions, Blair concludes.

“Our approach to customer experience is really driven by enabling the customer voice and making sure we’re focused on customer-centricity, making sure all the decisions are driven by what will provide the customer the best experience,” she says. “That’s the progression in the industry, taking that lens and wearing it all the time, instead of a product-centric view.”

The voice of the customer is a major project at Philadelphia Insurance Companies as well, under the leadership of Seth Hall, SVP of customer experience. Working with voice of the customer vendor Confirmit, Hall and his team survey the company’s commercial insurance customers on a regular basis.

Initially, customer surveys were only sent out when a customer called into the call center or interacted on the company’s website. But the data is so important that the company has begun regular surveys and expanded the amount of triggers.

“Over the past few years, we’ve moved into covering the entire lifecycle of an agent or policyholder,” Hall says. “From us courting them through the sales process, all the way through when they do call in, or when they work with their account exec, underwriting, sales, or through the claims adjudication process.”

But the important thing isn’t just getting the data, but analyzing and acting on it in short order, Hall says. Through the survey results, the company has identified times when it thought it was safe to run server maintenance that actually weren’t (because customers were attempting to access the site) or when product or regulatory changes are making business processes longer than they had been in the past.

“Our threshold is pretty low in terms of what would trigger us to look at something and take action,” he says. “If we get a negative response, we’re calling that person the same day. There has been a big push on ease of doing business -- ‘How easy are we making things for you?’ ‘Effort spent on this transaction’ is a big data point for us.

Ultimately, insurers have to think about customer experience from the top to the bottom of the organization. Hall liases with the C-level and  regional VPs of the company, and presses a message of fast action.

“We want customers to know that we get it and it’s not a black hole,” Hall says about customers reporting their experiences and expectations. “It’s a swarm mentality -- let’s act on this now.”

Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access