Sizing Up Self Service

Held up against the maturity of the Web as a platform, the rate at which customers have embraced self service seems wanting. Yet, inexorably, carriers are seeing an uptick in adoption for self service in areas ranging from bill pay to policy renewal.

A report from Cambridge, Mass.-based Forrester Research Inc., “Increasing Online Insurance Self-Service Adoption,” delves into why many property/casualty and life insurance companies have been slow to develop online self-service capabilities or to persuade their customers to employ them.

The report, authored by Forrester Senior Analyst Chad Mitchell, says one reason self-service adoption rates are so low is that insurers haven’t given customers sufficient cause to conduct business online.

“Insurance online self-service in both North America and Western Europe is often characterized by ineffective or nonexistent promotion, limited content, lack of online functionality, and poor processes like online authentication,” the report states. “Depending on which insurance company they do business with, customers often have few incentives to adopt online self service.”

Indeed, given the benefits both to consumers and carriers enabled by Web service, the lack of push around self service seems all the more confusing. The report says insurers need to formalize a program for self service in order to make it a higher corporate priority come budget time.

“With competition for funding tighter than ever, a low priority means no budget,” the report states. “Lack of budget is a major roadblock to many online self-service initiatives.”

Another potential hurdle to adoption is push back from producers who fear that expansion of self service will cut them out of the sales process.

These obstacles notwithstanding, carriers will eventually need to build up self-service options in the face of shifting demographics. In an online survey conducted in 2009, 27% of respondents 18 to 29 years old acknowledged having paid an insurance bill online, almost twice the percentage of seniors (15%) that had done so. If these seem low, consider the fact that 50% of Gen Y and 64% of seniors said they have not been to their insurance company’s Web site within the last 12 months.

Nonetheless, 46% of respondents of all age groups indicated that the ability to check policy status and make changes on the Web influenced their choice of providers.