Insurance service platform – there is so much to offer

Those in need of a good dose of reality and humour should have a read of a recent Mark Ritson article in Marketing Week where he discusses brands and the Covid crisis.

With all the talk of human behaviour bifurcation in 2020, we need to remember that through Covid-19 many of the success stories from businesses have been from those who have continued to serve their customers, often by expanding existing channels or by offering services that fit the situation.

We may have shaken our heads disapprovingly at Amazon as it gobbled up our pounds but when high street shops shut it was somewhere we knew we could turn to get the things we needed and wanted.

It was surprising how many retailers who have had years to put good digital systems in place struggled when people turned to online shopping. Websites crashed, delivery times increased, and some retailers who should have done better simply shut their doors altogether. Of course, I understand that in some cases businesses felt it was not safe for their staff to work in warehouses and distribution centres, but as Ritson points out, customers simply don’t care about this.

Woman On Phone After Car Accident

Insurers need to offer their customers more than than claims processing services

Insurance is no different.

Over recent years, many consulting services have published reports suggesting motor insurance providers need to move to a model that is more customer focused.

A summary of findings include:

  • Motor insurance is a commoditised industry. 84% of insured drivers in the UK shop around for a new insurer each year. Retention is a major cost when margins are already tight. 
  • Insurers currently have limited customer interaction. The once-a-year interaction at policy renewal does not build a relationship or loyalty. Evidence suggests more interactions can enhance customer satisfaction levels, and good customer service during the claims process can increase retention rates. 
  • Motor insurance plus a service, which may provide valuable data to the customer, is not necessarily commoditised. 

Reading deeper into this 3rd party research, one thing Eloy has identified is that insurers are not blind to this challenge.

Over the last few years, a number of insurers have developed apps to provide additional services to customers. However, I feel they have not been particularly customer centric or tried to solve some of the challenges experienced by drivers.

Telematics lite app

LV= teamed up with OctoTelematics to build an app that provided motorists with usage statistics and a list of trips. The aim was to educate drivers and improve behaviour through rewards.

Octotelematics LV= App

LV= & Octotelematics app

An app that rewards drivers for ‘good’ driving behaviour

The difficulty with this sort of app is that we all think we are good drivers. If we thought we were a bad driver, then we probably wouldn’t be driving at all. Scoring a driver on how they accelerate or brake based on potentially inaccurate GPS coordinates has its own difficulties too. What are we meant to do with information that tells us that we may only be a good, and not great, driver? Take more driving lessons?

Compare this with VitalityHealth, a health insurance company with a business model based on changing customer behaviour. Their approach towards a health score is much more objective: counting steps or trips to the gym. They don’t attempt to assess how many calories you are burning and therefore how much weight you are losing while out on your daily lockdown walk.

With the subjective assessment provided from a typical driving app, I expect motorists will eventually become disengaged and delete the app. There is also the concern that users may start to believe their driving behaviour could have an impact on the price of their premiums, which is another reason to stop using the app.

One segment of customers for whom an app like this could be useful is for nervous drivers or those with low confidence. Reassuring these sorts of drivers could be a useful service for insurers to focus on and aligns neatly with what insurers are already trying to do already; add confidence in the face of uncertainty.

Roadside example

Recently I heard from someone who had a minor road accident. Their rear car tyre exploded, damaging the rear axle and the rear windscreen. The driver and his family who were in the car were unharmed but needed assistance for roadside repair. It was also likely he would need to make an insurance claim. Having not needed either of these before, he was unsure what to do, and so like most people, turned to Google. 

Unfortunately he fell for a scam similar to the one recently highlighted in Katie Horley’s Consumer Champion column in The Telegraph where a man phoned a fake customer services helpline for TransferWise and ended up losing £168k.

AA Screen Shot

'AA Recovery' search results

Google results show 3rd party premium rate numbers 

Most people would probably claim that they would have been able to identify that this is an advert for a premium rate helpline rather than a direct number for the AA*, but it’s all too easy to say that when we are not standing by the side of the road in the rain in a panic. And although the driver didn’t lose thousands of pounds as some victims of these sorts of scams do, by phoning the wrong number he still managed to rack up a phone bill over £100.

The AA arrived, and although the driver was not a member he was able to join on the spot so they could replace the damaged tyre and the driver could get home.

However, repair for the car was still required, and due to a suboptimal claims process the driver needed to wait 28 days for the invoice to arrive before he could make an insurance claim. During this time he did not have access to a car as he did not have a replacement car as part of his insurance policy.

Insurance to assurance

I believe there are a number of services that an insurer could offer in a scenario like this to improve the customer experience.

Firstly, a claims management app would help drivers through the uncertainty. This would be somewhere that drivers could safely store policy details and have access to relevant phone numbers, as well as a tool to guide them through all the information they need to collect such as incident details, witness statements, and photographs. The app could also provide advice on what action to take and give feedback on whether it is worth making a claim with no impact on your no claims bonus, similar to how borrowing assessments don’t affect your credit score.

Secondly, although breakdown cover is helpful many drivers choose not to include it in their insurance policy. Despite this, insurers could make it really simple for drivers to request roadside assistance within an app. The driver would still need to pay the call out charge and/or joining fee but the level of stress would be reduced.

Finally, the entire claims process could be digitised and sped up. Make it obvious and easy and pay claims as soon as the insurer has identified the claim is valid and is confident about the cost of repairs. This can be achieved by ensuring the driver supplies better information through the claims management app.

To this end, in our app we have built a simple walkthrough guide so that in the event of an accident drivers can collect the information they need to make a claim. This will improve roadside wait times and should speed up claims processes as drivers will be able to supply relevant data, including geotagged images.

Talking to our driving customers more

Offering more to insurance customers can go far beyond accident management. An enlarged suite of services – including smart parking solutions, coordination with passengers and pedestrians and tools for local authorities and communities – are all valid, offer value, and increase the interaction with drivers.

Insurers spend hundreds on millions of pounds on marketing every year but fail to engage with their own existing customer base in a meaningful way. EY’s research (“European motor claims Is customer satisfaction enough?”) shows that interaction for claims enhances the customer relationship.

Adding a greater array of services would make customers stickier and – who knows – solve many problems that still exist on our roads. Just looking for parking spaces accounts for 30% of all wasted time and pollution on the road. These are areas Eloy is investigating in much more detail.

Upcoming app releases and research

Next year will bring more Eloy App updates. We will be adding the option to request breakdown cover. Using GPS data recovery vehicles will easily be able to find the cars’ locations, and drivers stuck at the side of the road will be able to verify the approaching roadside assistance vehicle.

We will also add more options around pedestrian interaction, building on our passenger pickup feature. Our own views on better parking solutions are advancing well – we have just completed a research project wi tha UK university and will look to share the results soon.

*The AA were very helpful during the example above and the driver would recommend their service.