My colleague, Emmett Higdon, wrote an article recently on how banks can increase customer adoption for paperless statements. He found that an average of five out of 10 online checking, savings, and credit card customers today receive an eStatement.

Surprisingly, this figure was roughly the same rate as our second quarter 2008 study.
eStatements combine two common themes I hear often from P&C executives: How can insurers increase customer self-service (e.g. eStatements) and tap into the green eco-movement?

The majority of direct and agent-based insurers I speak with are trying to lower costs through paperless statements. The tangible savings from eStatements include obvious decreases in postage and paper costs. The fringe benefit for insurance carriers is the opportunity to tap into the growing eco-friendly customer segment.

We found that green customers are more educated, and earn higher incomes than other U.S. adults— making it an attractive segment. More importantly, there is a small but growing segment of U.S. consumers who “vote with their wallets.”

Our research shows that nearly 15% of U.S. adults would pay more for a product or service from a company that is environmentally and/or socially responsible. The Green Machine (think of big wheels from long ago) makes logical sense for P&C executives to tap into a desirable customer segment.

So how can insurers get more customers to sign-up for paperless statements, billing and policy administration?

Our research shows the nearly four out of 10 new U.S. auto insurance customers choose paperless statements. That includes purchases through all channels including the Web, phone and agent. The number dramatically increases when we isolate Internet purchases (policies binded online). Approximately seven out of 10 U.S. adults who purchase auto insurance online select paperless statements.

But what about the other six out of 10 U.S. auto insurance customers who still receive paperless statements?

We asked U.S. online consumers what financial providers (banks and insurance providers) could do to encourage paperless adoption (see Figure 1). Responses ranged from monetary compensation to planting a tree for every customer who signs up for eStatements.

All of those are good options but here are three best practices we found to tap into the green customer segment and increase adoption of eStatements:

1.    Educate your consumers about their ability to access statements from your site. It's not enough to offer a stored PDF; it's time to explain to your customers that the PDF, printed out, is a legal document, just the same as a mailed statement. Allstate does a great job of educating customers on their public and secure Web sites on the benefits of paperless statements and online bill pay. (see Figure 2).

2.    Give them the option to turn paper back on in the future. For firms looking to cut costs (good for you and your customers) and be a little green (good for everyone), we think it's time to simply cut that paper cord. It's not enough to make paperless an option. Few consumers will bother to take the additional step once they begin receiving eStatements. Make turning off paper the default companion to signing up for an eStatement—all the while assuring customers that not only will they have ongoing access to the archive, but additionally, they will have the option to go back to paper at any time. Few will choose to do so once they understand the benefits of eStatements.

3.    Enroll every customer in your alerts service. Send your customers e-mails, voicemail, or SMS text messages—just let them know that "alerts" means "reminders to pay your bill." Then alert them when the bill has been paid and when the next eStatement is available. They'll wonder how they ever got by without the alerts, and they'll never ask for paper again.

Chad Mitchell is a senior analyst with Forrester Research. He covers trends in global insurance; eBusiness and channel strategy; emerging Web and call center technologies; consumer trends in researching and buying insurance; and best practices and rankings of leading insurers.

The opinions of bloggers on do not necessarily reflect those of Insurance Networking News.

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