Insurance is and always has been a relationship business, but the technology of the business, until recently, has been focused predominantly on enterprise level applications, which are heavy on data collection and used to support internal processes patterned on traditional supply chain management models.
Now collaborative and social technologies, including smartphones and tablets, are radically changing not only interactions with consumers, but the ways in which internal processes can be conducted as well.
In "Collaboration and Insurance 2.0: An Overview of Social Software and Enterprise 2.0 for Insurers," Celent Analyst Craig Beattie describes the collaborative cycle, which he says broadly consists of three steps: search, which includes the hunt for information and subject matter experts within a network; presence, referring to the availability of the knowledge and subject matter experts; and, finally, collaboration, in which knowledge is shared through the network and added to by the group. In short, the ability to source, exchange and publish information in near real time, and through comparatively inexpensive tools, has encouraged a proliferation of exactly that.
"The level of collaborative activity is unprecedented," says Michael Costonis, executive director of Accenture's insurance practice for North America. And while that creates many opportunities for innovation, he says, there are actually only two goals for most business people: to grow the business and reduce expenses. Social and collaborative technologies can help companies do both, he says, by removing or reducing the latency in internal operations - by breaking down barriers to information and making new, better data available to promote best-use cases - and by enabling more and better interactions with customers and prospects, also based on access to new and better information, much of it created and volunteered by those customers.
"Banks have been doing this for 30 years; it's not new to them," says Michael Boyle, CEO of Perseus Technical Consulting, an insurance consultancy. "It's new to insurers, who were generally ambivalent to customers until recently, when customer experience became such a big deal." From the consumer's perspective, nearly instant access to formerly proprietary information, such as pricing, he says, may or may not increase sales for individual insurers, but it has changed the point of entry for interactions with many customers. "It used to be that if you were an auto insurer and your name started with 'A,' when people went to the Yellow Pages, they would find your name and call you first. Now they Google prices," Boyle says.
As a result of collaborative and social technologies, those consumers have almost immediate access to multiple potential insurers, customer experience stories and can both give and receive referrals, which help steer purchase decisions. That's a level of transparency and speed that is new to industry and forcing insurers to try new ways to become, and stay, important to their customers.
Opportunities to become more important to customers range from the comparatively simple to the complex. Many insurers now are publishing weather reports, as many insurers did during Superstorm Sandy. State Farm and American Family Insurance actively collaborated with customers through Facebook, Twitter and other social media platforms in response to tornadoes in Illinois, publishing answers to customers' frequently asked questions, the availability and location of CAT response vehicles and geo-location data to navigate the disaster areas. Others use those same tools to publicly interact with customers and prospects in affinity groups and to build consumer awareness.
At the other end of the complexity spectrum, networks of agents, underwriters and carriers have been formed to facilitate the speed, accuracy and profitability of underwriting processes, says Neal Baumann, principal of Deloitte Consulting's global insurance practice. The collaborative mindset also is being used to better match prospects to agents, based on an understanding of the customer or customer segment, and in claims processes, to put the most experienced claims people on the most difficult claims, for example. "It's not about having Bronze, Silver or Gold customers," as when customer relationship management applications drove interactions with consumers, Baumann says. The opportunity is to consider an individual, understand their needs and respond most appropriately based on context and those specific details.
The collaborative mindset in fact is being applied to a host of other technologies, Baumann says. Insurance telematics, for example, becomes a collaborative technology when insurers offer feedback to drivers to improve driving habits, which in turn could lower premiums for drivers and lower risk to insurers. The same also could be true for personal performance tracking technologies, such as the Fitbit, Nike Fuel and Jawbone wristbands, assuming behavioral check and balances are included in the customer, risk and pricing considerations, he says.
Collaborative and social technologies have found resonance with consumers, empowering them in their interaction with corporations and each other. Whether insurers will fund success with the collaborative and social mindset, however, is not a foregone conclusion. Success is predicated on consumers' willingness to continue sharing and engaging with them. Consumers can and do, sour on companies that get social wrong. Messages that belie concern, are considered intrusive, or that push product will be as easily ignored as spam e-mails, telemarketing calls and direct mail are now.
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