Relieving customer pain points in insurance

The introduction of digital technologies has impacted on businesses in a real and measurable way, feels Adam Ikdal, managing partner at BCG.

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As innovation continues to speed up exponentially, it is going to reveal yet more opportunities for early adopters to gain a competitive advantage. Nowhere have we seen greater evidence of this than in the banking and insurance sectors, where growth has taken place at an unprecedented rate in pursuit of operational efficiency to drive better customer service. Customer service lies at the heart of what organisations in these fields do, providing financial services and products designed to improve people’s lives.

In a previously published BCG article, companies that prioritise customer-centricity are able to exceed expectations in several areas: product selection and availability, interaction experience, service quality, channel accessibility and communications. This remains true today.

But it is here that the disconnect often comes in. The most common mistake companies – South African and international alike – can make is focusing on the technology to achieve those aims, rather than the customer using that tech to access or engage with their product or service. Only by prioritising the entire customer journey from start to finish can banks and insurance companies truly understand pain points that those consumers face and actively map out and develop on-demand solutions that meet their customers’ needs.

Read more: Converting digital disruption into a competitive advantage

Digital is currently one of those pain points in South Africa, where there is still fairly substantial skepticism surrounding its uptake and use – particularly to access financial services and products. This is driven largely by three factors: penetration, usage and price levels.

Although mobile penetration continues to grow rapidly in the country, with research showing that smartphone penetration has surpassed the third mark and sits anywhere between 37 and 45%, the challenge emerges in that there is a lack of financial literacy that continues to hamper even the most ground-breaking solutions.

Combined with price levels that are beyond reach for many segments of the population, a fear of being scammed also prevents mobile financial services solutions from reaching their full potential in South Africa. To fully embrace the introduction and rollout of more pioneering solutions that fit seamlessly into customers’ lives, banks and insurance companies are going to have to ensure that they address these concerns while simultaneously creating innovative tools for their customers to overcome their pain points to provide better service.

There are already examples of solutions like this that are revolutionising the financial services sector that companies can take heed of and learn from. A notable case in point in the life insurance market is the combination of an app with Uber to set up appointments and enable the almost instant dispatch of a health professional to conduct the necessary health tests required for cover.

In the past, there would often be a long wait between completing the application for life insurance and the physical medical examination that is a necessity to get approved for cover. It could take anything from a few days to a week between lodging the application and the actual drawing of blood for testing. Digital has proven to be a game changer because the app allows customers to set up appointments immediately and for the qualified nurse to use Uber to get to the appointment.

By understanding their customers’ pain points, the company in question was able to roll out an on-demand solution that meets their needs and improves their satisfaction levels. In fact, because of the solution, the company has reported an increase in customer satisfaction levels across all income brackets.

Although it might appear a seemingly simple example, it illustrates the power of digital as a means of improving customer service by eliminating pain points. While digital is by no means a blanket solution or silver bullet to solve all business or customer service challenges, and businesses need to adopt an omni-channel approach to how they interact and engage with their customers, it is a critical step in the right direction to introducing innovative solutions that answer real customer needs.