Key Takeaways:
- It is critical that marketing informs and controls the entire customer journey, even beyond the sale. Changes in customer lifetime value through not just the sale, but improved customer loyalty can open untapped opportunities for scale.
- Having a CX focus and an always-on testing mentality is an answer to elevated customer expectations for digital convenience. Learnings need to extend beyond your industry to meet the customer where they expect you to be, regardless of where you compare against your direct competitors.
- Better customer insights mean more efficient spend, first party data and predictive modeling are more important than ever, as browsers continue to restrict the use of third-party cookies.
Valerie Turpin (00:12):
Good morning everyone. Thank you very much. I think we are going to start, so our topic is the Customer Still Rules and I will have my esteem panelists, I mean to introduce themself and then we will go to the core of the conversation.
Matt Donofrio (00:29):
Awesome. Hi everybody, my name is Matt Donofrio, head of partnerships for a Seed Stage Insurtech called Marble. We are a Super App for all things insurance, like a digital wallet with a full scale brokerage, sort of behind that.
Shelley Yim (00:43):
Hi everyone. My name is Shelley Yim. I am a Managing Principal at Epic Insurance Brokers and Consultants. Been there about a year. I work in our risk management and winery practice, but prior to that I worked to for two global insurance brokerages, working on clients from startups to Fortune 100.
Chaitanya Baddam (01:06):
Hi, my name is Chaitanya Baddam and I am the Chief Data Officer at COVU. It is a startup company and we help customers manage their customer risk and also help the independent agents manage their book of work for BNC. Prior to that I was with John Hancock leading their Technology Division for the life site
Valerie Turpin (01:26):
And I am Valerie Turpin. I am the Chief Founder Writing Officer Property for Arch Insurance. Arch Insurance is a commercial insurance company. We are 80 billion dollar market cap. We joined the SFP 500 last year and in my specialty I do mostly the Underwriting. So customers, I will have a first question for Matt. So today the customers determines their needs for insurance coverage and then they navigate the insurance market to try to find what is the best fit for their needs. They do that by themself or they ask an agent to help them, but however the process is cumbersome and it is not very easy to compare the products between different carriers. So how the access to the data can change and hand enhance the customer experience.
Matt Donofrio (02:23):
And this is really all the core of our business model at Marble. So just to get sort of set the scene a little bit, really what we are trying to do is kind of flip the paradigm a little bit of, okay, let us lead less with sales and more with service. Let us give folks a place to manage their existing insurance picture first, just like a Digital Wallet, your mint personal capital for insurance, centralize it, give them features, utility upfront to manage that and then bring in the optimization on the back half of that. So let us say service first, then sales. So the way that we are doing that is we are plugging into this great sort of infrastructure layer that all liken to what happened with plaid and banking about 5 or 10 years ago. So this great technology has been built to start to loop in all the in bank's case, right?
(03:15)
Bank data, account data, credit card data. And now we are seeing that happen for insurance. So policy data, service data, claims loss runs, all that good stuff. So what we are trying to do is loop that all in, give folks a super easy way to see that all in one spot and then start to leverage that data to create these, I will say more journey based experiences with the customer. And we think that is sort of a win-win for carriers, for distributors, for reinsurers, the really the whole industry to get more personalized products in front of folks to get it at the right time, at the right price, in the right way. So that is really sort of how we think that the data will start to empower users more. And then off the back of that, we can build a lot of cool features using the data. The more we know a customer, again, the more we can engage them.
(04:07)
We are also starting to pay people for that data in a way. So we have a rewards program as well that when you upload your policy to marble, we will give you 500 marbles we call 'em, right? And then you can continue to earn that in our currency and then that maps back to more loyalty. So we think it will also give carriers another way to increase that LTV in this day and age of price shopping where folks are really struggling to retain those customers going to the policy geniuses, they are going to the Jerry's of the world and just rate shopping every cycle. So I do think the more transparent we are, the more aligned I think the more the better off is for each participant in the ecosystem.
Valerie Turpin (04:46):
Thank you Matt. So Chaitanya, I think that your company is also offering options for the customers to better navigate the insurance market.
Chaitanya Baddam (04:55):
Absolutely. So for what we do, we are a B two B for the independent agents who sell insurance. And if we think about their perspective as a customer, they do not have a way to service it. Right now we have 10% of the applications only that are completed online, which means that we would need the help, all the help that independent agents can get to actually help the customers complete that information. And they do not have all the information together. They need to go to Ivan's, they need to go to the AMS Systems and multiple AMS Systems to fulfill their needs. So until this need is filled, we will not be able to help them. And that is where CO comes in helping the independent agents manage them and thus the customers of these independent agents who have all their information in one place. And that is where we are going to bring personalization to the customers and add analytics on top of that so that they can understand risk and thus mitigate their risk overall.
Valerie Turpin (06:01):
Thank you. So we discuss about products, we discuss about pricing, which has been their focus of the insurance company in property, definitely pricing right now because we are on very hard market. Having said that, I think the customers are also expecting some other benefits that would come with better data, better transparency about the information. So Shelly, can you speak about that please?
Shelley Yim (06:26):
Absolutely. I think having worked on a variety of clients in various sizes, one of the things that I hear a lot is transparency of the process. So one of the challenges right now, particularly in California, every time you turn around all states leaving state farms not accepting new clients. So it is availability in addition to pricing and coverage that you can obtain. So I work, part of what I do is working with wineries in Napa and it sounds fabulous and honestly it is. I was at barrel auction this weekend, which was a hoot. You guys should go if you can, but so many of them are absolutely uninsured for wildfire and that is their biggest risk. And when we start looking at, for those of you in the audience who live in California or in any place where there is a climate related hazard, your insurance is going up, your coverage is lessening, your deductibles are going up.
(07:28)
And what we are trying to do is help the customers, help the clients understand this phenomenon and how they can help the process better. Valerie and I were talking that sometimes getting that information is challenging. I say the customer rules, absolutely the customer is not always right. And I say that when I am the customer. So we have to be part of that process. It is a triumvirate. The client has to be part of that process to get information to protect your property because that is going to help the carrier provide you with insurance and honestly try to prevent more carriers from leaving the state because eventually carriers that you have to select from, that is going to be very, very limited and that is going to make things even more expensive.
Valerie Turpin (08:21):
Yeah, no, absolutely. So we identify that today the collection of data information that is needed for the transparency, the better terms and conditions or the ability to find insurance, but the process is cumbersome. There is only 10% of the application that has done online. Otherwise you rely on an agent, you rely on a person to complete that for you because for the clients it is not necessarily identified to be critical or just not available. So what else can be done? She Tanya, to help the customers to get needs met in this very complicated market, but also to help the customer experience to be better and easier and to help well to bridge the gaps about the defiance against our professions and be more partnership.
Chaitanya Baddam (09:12):
So let us think about the customer journey. you are applying for an insurance, you have these 250 fields that you need to fill out a dozen forms that you need to send out. But I think we need to come in from a customer's perspective and think about it more creatively. Why do we need to fill all of those forms? If you have data available, for example, you have a house, you are taking a home insurance, you type in the address, you already have the details available of the home, the structure of the home, the roof, how old it is, all this information is already available. Why do we have to have the customer enter all this information? Again, think about it from a car perspective. If you entered the win number, you have the third party information already available saying what is the the model, what year was it built?
(10:00)
You have this information and you already know the information, you do not have to have the customers type in all this information. You can eliminate the additional steps that the customer has to take in order to complete an application. So once we do that, we reduce the size of the application, which means that the customer will tend to complete the information very quickly, which reduces the service or the support that is needed behind the scenes to support this customer. I think that is one of the ways that we can reduce overall and we should think about it from more of a customer perspective and leverage the data that is available to bring this innovation. And once we have this, we can add more analytics on top of this saying that, alright, now we know that certain area or certain zone is maybe we need a fire insurance on top of that, these analytics can be added on top of that and this information is available. We do not have to ask, have the customer type in every minute. So I think that is one of the ways that we can increase the customer experience.
Valerie Turpin (11:13):
Absolutely. They do not want to type any minutes either. I think this is important, I mean to keep the customers into their identification of the needs and then making the decisions about eliminate the cumbersomeness about collecting this information. Having said that, Shelly, I think that you touch on an important topic is that the customer rules but the customer needs guidance. So can you elaborate a little bit on this? So
Shelley Yim (11:44):
Sure I started to say, I do not think your microphone's on.
Valerie Turpin (11:48):
Oh it is screened.
Shelley Yim (11:48):
Okay, trust me, you guys can hear without it. So the customer needs to be part of the process. So one of the examples and we talked about earlier was, okay, now everybody can hear me that wildfire is a very real issue for the winery industry. But that in order for the broker to go to the various insurance carriers and get something that is remotely palatable for them to consider, we need that information. We need to know that they are investing in some resiliency measures, things like that. So when you think about your car, you are going to maintain your car, you are going to up do the software upgrades, you are going to do all those things. If you are not doing that for your own personal property, the insurance carriers think, well, you do not really have skin in the game and you are just transferring all the risk to us.
(12:52)
So I mean there is transparency in the process there. It is a partnership. Absolutely. So the customer, one of the things I also mentioned the customer rules because we vote with our feet. If we do not like something, if something is not working for us, we will go elsewhere. There is a whole wealth of insurance brokers, consultants, there is direct to market options, there is all of these things. But what we are trying to do is help manage the overall market so that we are talking to the insurance commissioner, we are getting the politicians involved because California as a state has become untenable for some insurance carriers because they view this as not profitable for them. So we need to show them that this can not be profitable if we can get the customer involved in the process, whether it is the direct markets, whether it is managing data a little bit better so that they can do their modeling and understand the risks that they are assuming better on behalf of the insurance carriers. Because the insurance carriers are not non-profit organizations either. And you can not turn on the TV anymore without hopefully there are no lawyers in the room without somebody saying, hey, if you had that auto accident, I can get to 10 million, I can get to 20 million. That translates to increased rates somewhere down the line. It is a circular, it is the circle of life. And so that is going to happen pass, get, pass passed along. So we got to figure out how to manage that better together.
Matt Donofrio (14:27):
And Shelly, that is a really good point. I want to bring that back to the relevance piece too because I think it does benefit both sides. So if we have this great profile built out on the customer right ahead of the sale, we have got not only a better customer experience, less forms to fill out, it is quicker, it is easier. We also have this almost repository of data for the carriers to get to the customers they want to get to. So I think that is super important now, especially as we talk about increasing LTV and loyalty and churn, A question we get a lot from our carriers is are you just going to use all this data to churn our customer? Are you just going to take the X date and take the premium and then put a new policy in front of every cycle? Maybe at some point we might do that if that can help the customer save.
(15:14)
But at the same time, one other thing we are doing is we are saying, okay, no, we are going to get all this data and on an anonymized basis, one thing we are building is what we call this the signal API with marble where the carriers can actually push rates into our ecosystem instead of us pulling rates from the carrier. So we will say, okay, we have got this central repository of a hundred thousand, 200,000 policy holders in a certain market, here are some anonymized data attributes about them and you can start to quote those by pushing rates to us, we will then push those rates in front of the customer at the right time in the right way. So that can start to help you build the book of risk that you want to. And maybe that is a way that we could start to say, okay, maybe State Farm does not need to you to leave California. They could start to target that risk in a more effective way because it is really difficult in the current marketing paradigm to understand those attributes about a house or a home or a car ahead of making that sale. It is really expensive to do so as well.
Valerie Turpin (16:09):
Absolutely. If I may add also on what Shelly said about guiding the customers. So in the book of in property we do a lot of coastal HOA in Florida. So in this market after hurricane here and six years of hurricanes, if you want to be insured, your deductible will move from 5% to 10% and your rate move everywhere from minimum 30% to 200%. That is market reality today and you will be lucky to have 50% of the capacity that you found last year. So this is the conditions and what we do see is that customers not very prepared despite some communication in the medias, but they are not really prepared with the magnitude of the changes that has been implemented. So what we do see as a consequence is that five days before the renewal date of their policy, we receive a broker of record letter, which means that basically they said, I do not like the offer from our broker, so I am going to chase another broker.
(17:17)
But the market is the same. They can change as many times as they want their agent. A new agent is not going to be smarter. Their agent has already contacted 40 carriers to try to find a solution and probably exhausted the capacity of the market. So the customers still rules. It depends on which market you are. Some markets you have competition, you have offers, and then it is really good when they have the ability to compare and to find exactly what is needed. But if you are in a market, there is a crunch of capacity and their competition is absolutely limited. This is why I think that it is very important for us in the industry to help also the customers to understand that there are sometimes limited offers and sometimes no competition and understand in advance how that will affect their insurance solutions. And the more data the better. I think that the more information and transparency they have will give them a little bit more chance to find something, but it is not going to be exactly what they want. So it is a fine balance. So I have a question for the three of you. Is that does the customer really rules and will the customer continue to rules or will they rule much more than you used to in the future? Matt, you want to start?
Matt Donofrio (18:48):
Yeah, sure. I think for us at least the customer always still rules and we will prioritize them and build them into this, the central part of the experience at all points. But at the end of the day, are we actually going to see a industry where the customer does always roll and it is always placed in that it, it is easier said than done and maybe not. So I think there is internal and external factors that we can sort of parse through that I think will affect whether or not we are able to truly place the customer at the center of the experience all the time. I think internally there is for sure regulation I think is a piece that we all need to think about. So in our business model we are compensating folks at points for engaging with our ecosystem. We are giving them rewards for uploading policies, we have got to maintain compliance with rebate law at all times.
(19:42)
So we are not of course saying, okay, get this quote, get this policy and we will give you a hundred marbles or whatever that would be in violation of rebate law. But there is other things we want to be able to do to understand them more deeply, get more data to put more relevant products in front of them that is sort of in that in-between realm right now. Is it a compliant, is it not? And we are starting to see the NAIC create some model law. The states adopts some model law around carve outs for life and health, sort of improving services that we can place alongside these policies and things like that. But I think the more we could free up that paradigm, the better it gets and the more we can place the customer at the center of these experiences. And then there is external factors. So I think macroeconomically right now, it is very difficult for folks to focus on the customer while we have such a challenging pricing environment, underwriting environment. So of course that is out of our control to a certain extent. But I think the political brinkmanship that is going on also out of our control to a certain extent is certainly not helping that macro environment. So we would love to put the customer at the center at all times, but whether maybe it is a bit more of a pessimistic view, whether we can actually do that remains to be seen. I think.
Valerie Turpin (20:58):
Good, Shelly?
Shelley Yim (21:00):
In short, yes, I think that the customer absolutely rules, but their position will continue to evolve. So when we look at solutions that the various direct to market agency efficiencies, what is changing is that, and let us see what artificial intelligence is going to do to help that process and streamline it. I think those will all be beneficial for the customers because there will still be competition. We want to maintain that level of competition so customers have options to evaluate that regardless of where they are. So I do think there are going to be some tools that come over time with the advent of, as we figure out artificial intelligence, I hope the laws that when you have claims keep up with that. That is been some of it that is been challenging when it comes to cyber related claims and other such claims where the laws sometimes are a little squishy. So trying to settle those things can be complicated, but I think that eventually the customer will have those options and will have some efficiencies that come with the tools that are being discussed at this conference.
Valerie Turpin (22:25):
Good. How about you?
Chaitanya Baddam (22:28):
Yes, the customer rules in the shot and the reason for that is the customer can choose if they want to opt in for information for first party data or third party data, there are regulations that are coming, which would say we cannot get the third party data, but just the firsthand data. And that is where I see that companies might struggle or try to wean in customers to provide that information to be able to provide greater solutions for them. And it also embeds the quality that customers can choose if they want to talk to an agent, not talk to an agent if they want to reduce the time it takes to complete an application. So I think overall it depends on the customer and they would still rule, but making their journey efficient, making their journey, keeping the customer at the center of everything and core is the responsibility of us and that is when customer will come to us and will be able to help the customer. So that is how customer rules.
Valerie Turpin (23:36):
Absolutely. And as a carrier, I would say that the customer, we have two customers actually we are the ultimate insurer and we are the agent because all our business is done through the agent. Our product innovation is heavily generated from the needs of the customers. And some companies have tried to do the bluish and items start by figuring what the customer needs created some products. And most of the time 90% of those products are on the market, but they are not sold. I think that the customer roots, because they are the one who can help us to refine and develop our products and then they want services. But I do like what the panel said is that it has to be a balanced relationship. It has to work together. And I am glad that everybody is thinking about how we can continue to integrate the customers into our conversation and do not forget that at the end they make the decision. So thank you very much. We have two minutes if we have any questions to our esteem panel. Yes.
Audience Member 1 (24:51):
Hey, you guys are talking a lot about acquiring a new customer, making sure that that journey is okay, well what about after they already are a customer. So in my world, for example, I have got my homeowner's insurance is through an agent and if I have a question about the policy, I call him up. He never knows the answer to the question right out of the gate. It may take him three days to get back to me and that is slow. So he is got information at his fingertips or not to be able to answer the questions. So I do not hear any of that being discussed. How do you keep me from leaving my carrier and going to another carrier because I just can not get service after I am a customer. My auto insurance policy is direct with the carrier and I will pick up the phone and call them with a question about something and I am on hold forever.
(25:41)
I do not want to be on hold for 20 minutes waiting for somebody to pick up the phone and then to authenticate me. And one of you recent just a few minutes ago said that that data is available to know who I am so that you can already have that data at the customer service person's fingertips to be able to solve my needs. But if you can not answer my questions quickly in this world that we live in today, I am out. See you later. I am going to go somewhere else. Some policies are a commodity and I can just go get another policy from another carrier like an automotive homeowners is a different story for the obvious reasons. Sometimes I do not have much of a choice depending on where I live or how big my policy might be. So I want to hear from you guys about what are you doing to make sure that your customers and your agents do not leave you because you can not support them properly and get them questions, answers to their questions quickly.
Valerie Turpin (26:31):
Excellent Questions. Who want to take,
Matt Donofrio (26:34):
I can chime in on the agent side of that as a brokerage. Some of what we are doing, I think it is to your point about right now, I do not think agents are nearly as digital as they should be. So I think you are experiencing that pain point of we need to be better about the tools that we are giving. Independent agents, they are always going to be around more digital brokerages like us. I think we can also help maybe provide some of those tools to agents. One thing we try to do is the centralization of data is for sure a big piece. When we originate a customer relationship, we try to have all that data in one spot. We try to, when the customer comes in, be there for them, answer those questions. The tough balance is the relationships are all sort of, or we will say the partner relationships, the carrier relationships are not created equal.
(27:26)
So we will have some carriers that do not want us owning that relationship, that is it, that want us to direct you over to them. And I think there is a lot more that can be done in that ecosystem to improve communication between agents, between carriers, so we can service that relationship better. Which I know is probably not the best answer to your question around there needs to be a lot of work done there. On the other side, I think one thing we are trying to do is give folks tangible value for their data and to better service you. And that goes back to the point I am making around some of the regulation. I think we would love to be a bit more free to compensate folks with rewards, whatever that is, gift cards, you know, name it for engaging, coming back with our ecosystem, not necessarily purchasing a policy, but ways to increase that loyalty, get them back engaging with our ecosystem and things like that. So again, I think it really is a tech game at the end of the day from the agent perspective is empowering them with better technology, better databases. I think AI is going to help there. Maybe answering some of those questions that you may or may not have, but you are right, at the end of the day, insurance is a complex game. So I do not think AI is the silver bullet that a lot of people think it is going to be. So yeah,
Chaitanya Baddam (28:47):
I would like to pitch in into that. And this is something we strive for on a daily basis. So what we do at Kohl is we help independent agents manage their book of work, which means that we just not deal with one carrier, but we deal with multiple carriers and we have agents who are trying to get the information to the customers on a daily basis. And what we have seen is there is no standardization in the industry and that is making it really tough. So there are three parts in which we need to handle this. First thing is the service reps need to be dedicated in understanding the processes and supporting the customers. There is no question in that. The second thing is standardization across carriers and agency management systems. That is totally lacking in the Insurtech space and that is why this is Insurtech until we take the step to standardize it where we can access all this information seamlessly through APIs or through direct connections to be able to make those calls and service the customers.
(29:57)
So once we have this standardization, the next piece is to train the systems to be able to present this in an automated fashion. So you do not even have to call us, you know can just type in and we can give that information because now we have that standard information and we are connected to all these carriers. But until we have that standardization, I think it comes, it is not automated anyway. So I think, sorry to say it, but there would be a little struggle trying to get through that and we are striving really hard to get the customers what they need, but that is what we strive for on a daily basis. So that is a three part question, but we need to get there.
Valerie Turpin (30:41):
Okay. I think that we are, do you want to add something? I need to conclude No, what they said, so exactly. Thank you very much attending our session. If you have any further questions, we will be around during the conference. But thank you again. Thanks.