5 strategies to excel at direct-to-consumer insurance

At the start of 2020, Geico and Progressive commanded 92% of the auto industry’s premium growth because of early investment and adoption of direct-to-consumer (D2C) business model, anticipating heightened market demand for fast and easy service. For certain industry markets, there is recognition that augmenting their distribution with D2C means stronger growth along with lower policy acquisition costs and higher customer satisfaction. Not all insurance markets warrant a D2C strategy, but for those carriers operating in life, personal, voluntary benefits and small commercial markets, acceleration toward D2C has begun and insurers should invest in building those capabilities. 

Early entrants might feel that adopting a brand-new customer acquisition approach is too daunting of a task for their organization to take on, while established incumbents are getting challenged to keep pace. 

However, excelling at D2C policy acquisition and servicing isn’t as hard as it might look. Successful D2C deployments depend on the following best practices: 

Keeping up with D2C champions outside the industry. Expanding omnichannel capabilities. Simplifying infrastructure via the cloud. Utilizing customer data. Embracing a ‘pay-as-you-go’ model while building the deployment.

1. Best-in-class across industry
Today’s consumer wants to research, browse, and purchase insurance products as easily as they stock up on household supplies via an Amazon order. That’s a tall order for insurers since even the simplest policies are far more complex than any transaction with an online retailer. But there’s still a great deal to learn from online retailers and other D2C experience leaders. Market leaders today are successfully adopting this approach by focusing on AI-based technology along with a team that looks fundamentally different, composed of data scientists, insurance advisors, product managers, designers and more.

It’s not just about speeding up purchasing. Insurers must incorporate great user experience in their design, such as easy navigation of websites and applications; an omnichannel approach for addressing questions however consumers prefer to engage. Moving technology infrastructure to one platform for a 360-degree view of customers enables seamless engagement across these multiple channels.

2. Expand omnichannel capabilities
Omnichannel is an especially crucial investment for insurers, as it allows consumers to connect/engage in the manner they prefer – whether it’s via a live phone call, a chat session, a web/mobile app, or other means. Incorporating automation into omnichannel systems ties together all the systems, data, processes on the back-end, no matter what customers use. These capabilities span across channel choice, channel coordination and channel blending, which is more prevalent in high-tech and retail sectors and catching on in insurance. 

In addition to traditional omnichannel capabilities, an interesting example emerging is automated pre-qualification with conversational AI to speed up the buying process. Here’s how that works – a potential customer browses insurance via their mobile phone and then calls to officially start the pre-qualification process. Typically, that takes up too much time for both the customers and live agents. The customer must stay on hold to get pre-qualified and could potentially drop off due to impatience. The live agent’s time gets wasted backtracking through everything the customer already did online. 

Companies should be monitoring all customer touchpoints across channels to ensure data shows exactly where they are in the shopping experience. Utilizing conversational AI and natural language processing, chatbots  can guide the customer through a no-wait, no-lag experience from first contact to sale, pre-qualifying the typical prospective policyholder in less than a minute. Any advanced issues requiring a live agent will have the context of their history to avoid backtracking.

3. Move to the cloud
Be wary of fragmented efforts and unnecessary complexity while building/augmenting your D2C infrastructure. The most efficient way to get a 360-view of customers across all channels is to bring every interaction into one platform. 

Companies that don’t have the infrastructure or staff with the right technical capabilities should seek a digital partner that can build an integrated solution, including an omnichannel platform and a team of highly trained licensed agents. Ideally, this solution is highly flexible, enabling insurers to add/remove features as needed and prepare for future scaling and innovations. Relying on an experienced third-party means avoiding the costs and disruptions of a DIY approach, allowing for swift integration into a secure, cloud-based environment, and enabling them to focus on designing the best solutions and experiences to fit their customers’ unique needs.

4. Embrace customer intelligence
Another valuable component of well-built D2C platforms is analytics applied to customer intelligence. Most D2C companies (not just insurers) analyze only a fraction of customer interactions, leaving valuable information about customer behavior untapped and potentially delivering poor customer experience. Luckily, advanced analytics and machine learning can make it easier to get access to these insights.

For example, cognitive AI, which simulates human thinking to find answers, can provide feedback on recorded customer interactions to let insurers and live agents better understand the pain points and hesitations of prospective customers and get the right answers to offer them the appropriate solution. 

5. Pay-as-you-go
Another advantage of relying on a third-party solution provider is that instead of risking major capital expenditure upfront, it can offer a use-as-needed service via the cloud, or even better, a risk-reward engagement model that bills based on actual business outcomes  instead of promised results. This is especially helpful for advanced features such as chatbots, which can turn out poorly if constructed by inexperienced hands. 

Paying only for the product’s outcomes, not the product itself, makes the initial costs and ROI of D2C much less of a leap for companies just starting out and ones looking to scale at speed.

Most consumers are not experts in understanding the insurance market, and carriers’ products and traditional platforms can be complex for the average person to understand. As a result, they can enter the purchasing process stressed or wary of carriers. Digital solutions should not only guide consumers quickly and painlessly to the right products but should make the experience enjoyable and simple to assuage any concerns a customer might have. 

The easier and more delightful an insurer can make the purchase experience, the more that investing in D2C technology will pay off.