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Insurance Customer Experience Innovation: 5 Disruptive Examples

Published February 16, 2016

Today, virtually every industry is ripe for disruption. The $3.7 trillion insurance industry is no exception. In many ways a perceptually commoditized business, those companies that win – like the famously customer centric USAA – are those that create differentiation through the experiences they deliver, and the ways their customers feel as a result.

insurance-customer-experienceYet USAA and a handful of others like it are the exception. As most established companies tend to move slowly to use their current size, information and resource advantage to better serve their customers, smart entrepreneurs and the start-ups they run are attacking the insurance business with innovative customer experiences that drive value and solve problems.

The fact is, the insurance industry hasn’t much evolved since the concept was first introduced in the late 1700s. Here are five ways that innovations in insurance customer experience are changing business and challenging the status quo for insurers and their customers.

  • Pay-as-you-drive, usage-based auto insurance policies reduce insured costs, and insurer risk. Most car insurance policies charge you based on age and history. Now, the distance you drive – and how you drive – can result in lower premiums. Zubie is working with Progressive Insurance to put recording devices in your car, while Censio uses an app to collect much of the same data. A bonus? Some of these can tell you when your car needs attention as well.
  • Digital insurance managers help you manage all your policies (and will sell you insurance as well, if you want…). How many insurance policies do you have? While I can’t make an accurate guess, I’ll venture 10 or more. Between life, auto, health, umbrellas, property and more… it’s a lot. And I’m not alone. Now, startups like Knip and FunctionFox make it easy to manage all your policies, from you smartphone. And if you need more? Hey, they’re brokers too…
  • Video-enabled doorbells discourage burglars and lower homeowner premiums. A motion detector records who comes to your porch – and immediately saves it to the cloud. American Family Insurance customers who use the Ring system get a 5% premium savings, and a deductible refund if a burglary occurs. Vivent lets homeowners know if a window is broken, for example - and gives Liberty Mutual customers discounts when they install it.
  • “On-demand” insurance provides mobile-powered, micro-insurance coverage only when consumers need it. Do you need all your insurance policies to be active all the time? Of course not. For years, we’ve been able to buy travel insurance as needed, covering airfare or hotel fees if something went awry. Now, Companies like Metromile offer “revolutionary pay-per-mile car insurance for the modern driver.” In other words, customers are going to be able to pay for insurance as they need it, and only when they need it.
  • Property and auto-insurance claims made easier and more enjoyable (and virtual). Let’s face it. For most of us, when we deal with an insurance adjuster it’s after something bad has happened. That’s why companies like SnapSheet see an opportunity to for a true mobile claims solution, enabling customers to settle the claim virtually. Results? Exceptional insurance customer experience – while faster and easier for adjusters as well.

Every one of these companies, services and products exist for a single reason: they have been designed to eliminate an existing customer pain point. At heart, that’s what customer experience improvement is all about: finding and removing those areas where friction adds up to wasted time or frustration – like in the examples above.

This article is the first in a series I plan to publish irregularly over the next year or so, building on the ideas published in the 2012 book Smart Customers, Stupid Companies. They’re also built around the knowledge we’ve gained working with companies around the world to improve customer experience.

So stay tuned as we look at experience innovation across the banking, retail, B2B and healthcare sectors among others in the months to come. Thinking up ways to change “how things are done” is a blast. In that spirit, I hope you enjoy thinking about ways these kinds of things could apply to your business - and to your customers.

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