It is a well observed fact that when it comes to digital transformation, insurance lags woefully behind other industries. And it is not just a question of technology. Even as the industry advances technologically, developing digital capabilities that rival other industries–from chatbots to IoT–selling insurance direct to consumers (DTC) has proved a difficult code to crack. Even Geico, the darling of online auto insurance sales, still closes the majority of its new policies on the phone, via an agent.
The retail ecommerce industry, on the other hand, has proven that there are very few things consumers are not willing to purchase on the internet. From buying groceries to booking airline tickets, consumers are comfortable conducting all kinds of transactions online, from the very simple to the most complex. Every day, millions of people even do their banking online. So what is the deal with insurance?
At Cake & Arrow, we have conducted many hours of primary research in the insurance industry, talking to hundreds of consumers, carriers, agents and brokers in an effort to help our insurance clients answer this question, and, in turn design better products and experiences. Throughout this process, we have learned a lot about how customers think and feel about insurance, perhaps our most lasting insight being a lesson about trust. The main reason consumers don’t want to buy insurance online directly through a carrier? They don’t trust insurance companies. This is why, even in the golden age of digital commerce, consumers continue to opt to purchase insurance through brokers and agents.
On the surface, fixing this problem may seem simple. All carriers need to do is to gain the trust of their customers, right? Easier said than done. While earning trust may seem like a simple enough idea, it is an issue most carriers don’t even know how to begin to tackle.
In my experience, when you want to learn to do something well, the best thing to do is to emulate an expert. In the case of consumer trust, it’s the retail ecommerce industry which has, over the past two decades, mastered the art of consumer trust. Each and every day millions of transactions happen online, and most consumers don’t think twice about ordering their groceries, electronics, clothing, books, and everything in between over the internet. This hasn’t always been the case! Gaining the trust of consumers has been a hard won battle, and those who have done it well (Amazon) are ruling the industry. If imitation is the highest form of flattery, what lessons can the insurance industry learn from the retail industry that can help them foster trust with consumers and drive a truly digital offering?
1. Establish consistent workflows.
The retail industry has the benefit of a consistent process across products, stores, and platforms. For the most part, everyone basically understands the standard steps in a checkout flow. Select your product, fill in your shipping and billing information, and purchase. And while there are of course optimizations that can be made to make an experience better, in general, consumers know exactly what to expect when purchasing a product online.
The same cannot be said for insurance. Unlike a book or an item of clothing, insurance is not a static product sitting in a warehouse with a pricetag. Insurance products are complex. Coverage and prices are variable based upon any number of risk factors, and complex underwriting rules and changing regulations can make it difficult for consumers to understand what exactly they are buying and how it is priced.
This leads to confusion in the process of quoting and buying insurance, and to a lack of standardized practices across the board. From a UX and design perspective, one of the first steps the industry can take toward gaining consumer trust, is to simplify and standardize the quoting process, so that consumers know what to expect when buying insurance online, and understand each step of the process.
And while underwriting rules and regulations will need to be streamlined to establish an effective industry standard, insurance companies can start by being more transparent with users about what to expect in the quoting process, including informing users about how their personal information is being used. This will help customers better understand the quoting process, feel more comfortable dispensing with personal information, and give them general confidence in the process by establishing clear expectations.
2. Invest in quality visual design.
Over the past two decades, we’ve seen retail ecommerce design evolve, following a general trend toward customer-centricity. Flash sites, cluttered home pages, and flashy fonts have given way to clean, simple designs that streamline the shopping process, communicate the brand, and are organized around customer needs, interests, and behaviors.
The insurance industry needs to follow a similar path, leveraging user-validated design to create trust with customers. A modern, usable, well-designed website is a signal of legitimacy. It tells customers that a real company is behind a product, and this company cares enough about its customers to invest in the experience.
A strong visual design that implements best practices removes that cloud of doubt in the mind of a customer and builds confidence and pride in the end product. In the same way that a strong brand is a promise of quality, a great visual design is an early demonstration that a carrier cares enough about a customer to invest in a quality digital experience that will translate into a quality product.
3. Implement a killer content strategy.
Content strategy is just for news sites, magazines, and blogs, right? Wrong. Content is an important piece of the sales process. For our retail clients, we have learned that crafting and executing a killer content strategy is critical to helping customers learn about a product, understand occasions for using products and gaining insight into the actual value of a product. Effective education about products and services demonstrates a company’s willingness to keep its customer informed. And the more a customer feels they understand what a company does and what their products are about, the more they will trust it.
While we often see short marketing messages on insurance carrier’s sites, few insurance companies invest in content on their website to help explain to their customers the value of a product, the differences between products, and to educate them on when and where to use the product so they feel empowered when making purchasing decisions. Educational and informative recommendations will help insurance companies establish a rapport with consumers as a trusted advisor. Companies must even be willing to tell a customer when a product isn’t right for them and demonstrate that they care about more than a sale, but about helping their customers make informed decisions that benefit them. A killer content strategy will help insurance companies do this effectively.
4. Enable the right level of customization.
The best retail experiences allow for just the right amount of customization. When buying clothing online, for instance, we can choose colors and sizes and have a choice of different delivery options. Subscription services like Trunk Club allow shoppers to input information about personal style preferences, including color and pattern preferences, set price points, and decide upon frequency in order to receive a custom selection of clothing recommendations when, where, and however often they desire. This kind of customization breeds customer loyalty, and, like a good content strategy, can help customers being to think of a company as a trusted advisor with their best interests in mind.
Insurance companies should explore enabling similar types of customization. While easy packages are just that–easy–they don’t drive stickiness with customers. Giving customers the ability to modify and tweak plans according to their unique needs and circumstances will drive a connection between a customer and a product. In the same way that these types of customizations breed loyalty in retail ecommerce customers, giving a customer more control over choosing the kind of coverage they need at a price they can afford, is a powerful way of building loyalty, and competing with other carriers on something other than price.
And while enabling customization is important, it is really critical that companies don’t take things too far, allowing customers too much customization and in the process, sacrificing the experience. In speaking recently with a carrier, I learned of a story of customization gone wrong. Their data showed that customers who were able to customize a package were more likely to purchase a policy. Emboldened by this piece of data, they created a new quoting page that allowed customers to customize every aspect of their policy. Lacking the qualitative info on how and why people were more likely to convert when customization was enabled and without user testing on the new custom design, they missed some essential information. By allowing their customers to customize everything about their policy, it made the experience overwhelming, and rather than increasing conversion, conversions ended up falling off significantly.
I tell this story as a reminder to companies that testing and validating every design decision with users is critical–and one of the reasons the ecommerce industry has been so successful at digital.
5. Play around with promotions.
Promotions are one of the most reliable and time-honored means of staying competitive for retailers. Promotions can make or break a business. Free shipping on big orders, Black Friday sales, and BOGO (buy-one-get-one) offers are all commonplace in the retail ecommerce industry, and are incredibly effective at creating consumer loyalty and trust.
While in the insurance industry, it is nearly impossible to offer dynamic pricing or let customers actually play with coverages to get a fully custom price due to regulations, discounting isn’t something to be overlooked. Bundling is a real thing and customers are more likely to purchase a policy if they see a real deal–and understand it’s benefits.
For example, I’ve seen many insurers combine rental insurance with auto insurance at a discounted price. When customers see deals like this, they oftentimes don’t fully understand the full benefits of the deal. For example, they may not know that rental insurance protects not only their property but also against liability, and considering the coverage, is incredibly affordable. Developing a robust content strategy to better inform customers about deals and the benefits of coverage will not only increase sales and stickiness, but help customers begin to truly appreciate the value their insurance company is bringing to their lives.
6. Leverage user generated content.
When shopping online and in store we have come to rely upon ratings and reviews to help us evaluate products and make purchasing decisions. User generated content, such as Instagram posts of real customers wearing clothing or jewelry can help us see how a dress might fit a certain body type or how a piece of jewelry looks in context. This level of transparency sends customers a clear message that as a company, you have nothing to hide–further inspiring trust.
Just like in retail, user generated content can be integrated into your content strategy, and can do the work of educating customers about your products–explaining the difference between certain coverage offers, for example, or why as a carrier, you stand out from other companies offering similar products.
Real content generated by other customers helps customers understand how a certain policy works. What the service is like, what the claims process is like, what kinds of scenarios are covered. It can be scary to leave your company and offering open to negative user feedback, but if you are doing your job, it will end up being more useful than it is harmful.
Insurance companies still face many hurdles to getting consumers to trust them, and to earning the kind of rapport with customers that the retail industry has established over the years. Anything short of a truly standardized process across all carriers and products will continue to cause confusion and suspicion among customers. But there is nothing stopping insurance carriers from taking strategic steps toward customer centricity, and looking to more mature industries, like retail ecommerce, who have done it well, and doing their best to emulate them.