The insurance industry has been slow to see things through a customer lens, but now it needs to quicken the pace, says David Williams, AXA’s MD of Underwriting and Technical Services. And with the help of Axa’s insurtech partners, it is…
The Insurtech Magazine: How has the customers’ experience of dealing with insurance companies changed, compared to the relationship they now enjoy with the banks?
David Williams: The industry was very process-driven and efficiency ruled the roost. But we recognise now that people expect an excellent customer experience; their interactions with other organisations set that standard, so we’ve got to be up there. There’s massive investment in making AXA’s customer interaction better. We’re appointing people as customer advocates and seeking feedback about better ways of doing things.
But it’s true that we were slow to get started and you have to understand the nature of the industry’s interactions to understand why. Customers communicate with their bank regularly, through holes in the wall or mobile apps. We sell them something then don’t hear from them for another year, unless they have a claim. This meant we weren’t rushing to invest in customer-facing technology. The advantage is that we’ve been able to go at it at the perfect time, learn from others’ mistakes and really raise our game.
TIM: So what customer experience improvements is AXA making?
DW: We need to increase our customer contact and we’ve also got to address a reputational issue – in the past, insurers were known for relying on lengthy wordings and small print, so we’ve got to find ways to remind our customers that we are there to help them. Technology such as mobile communications and social media give us great opportunities to interact with, and understand more about, customers.
We’ve always employed lots of actuaries, clever mathematicians and data scientists who focus on pricing in an incredibly competitive market, but how about using those skills to understand what customers really want? There’s lots of external data we can tap into, much of it free of charge. If we can understand what really makes people tick and shape our interactions around that, we’ll stand a better chance of building that relationship.
TIM: How critical is mobile technology to the insurance industry?
DW: You could almost argue that the web, while one of the most transformational things that ever happened, was just an interim stage. If you look at analysts’ predictions around when and where people are buying, it’s absolutely a mobile future. More importantly, from an insurer’s perspective, when we have an interaction – when there’s a claim for a motor accident, for instance, or while travelling – people don’t have a PC around, they don’t want paper and pens, but they always have a mobile device.
We can also use apps and social media to connect with people on their mobile devices, to provide information that’s helpful. If we sell somebody a travel policy and we know they’re going to Europe, then with their permission we can link to flight data and, using blockchain technology, know when a flight has been delayed, so that they automatically get a payment without making a claim.
However, it’s easy to get excited about ‘shiny toys’ and the future, and we must prepare for that, but we also have to recognise that not all our customers want to interact with us that way. We want to give them choice, making sure they can submit a claim by sending an email, writing a letter or submitting a video clip. Working with clever financial tech startups, we can assess damage to vehicles or property just from a video clip or photos. However, while these things are very exciting, if somebody wants to speak to us or have a motor engineer or surveyor come round, we will do that as well.
TIM: Does digital technology allow more efficient onboarding?
DW: In the past, we might use different techniques for marketing but then force people down a specific route – like filling in a form. Now, we’re trying to understand what they really want, rather than assuming they’ll like our newest way of doing things, or looking at their age and assuming they want a paper form, for example. We’re trying to tailor our products so we know we’re selling them something that brings them value, and using data to model what we think will be the most effective, most appreciated way of interacting. Customers interact with insurers much less than anything else, so whether it’s how they buy their groceries or do their banking, we need to see what’s working and make sure we stay up to date with those trends.
Some people are time-scarce and want to do things really quickly, and we can do that using technology. But other individuals like to feel they’re being taken care of more. For example, we sell commercial insurance products, including professional indemnity, and we worked out that, using external data sources and information we already knew about businesses, we could just ask them one or two questions and give them a policy. Then we noticed that conversion dropped off when we were expecting it to rocket. From speaking to these customers, we learned that they didn’t think the product could be that good because we weren’t asking sufficient questions or taking enough interest. In the end, we put some questions back in that we already knew the answers to so that they felt this product would provide the coverage they needed.
TIM: How are you using digital technology to help prevent fraud?
DW: Fraud detection is massively helped by the digital world we live in and the devices we use. Everybody leaves a digital trail. The industry currently spreads the cost of total claims over everybody’s premiums, so if people submit fraudulent claims, it’s other customers who bear that cost. So, we’re reducing the cost of insurance for honest customers through all sorts of tracking technology and external databases. I know some people don’t like the idea of some of this, but if they share their information, we can provide them with the benefit while making sure we never take their data for granted.
TIM: How does AXA collaborate with insurtechs?
DW: The vast majority of the people we employ are great at insurance, but not necessarily at the cutting edge of technology or customer experience. We are very focussed on compliance and regulatory issues, which is vitally important, but isn’t necessarily the sort of thing that will accelerate new development. If we can work with small, entrepreneurial startups that have a great idea and want to turn it into a business, without hampering them with all the regulatory thought, we can take some really good steps forward.
The first thing we recognised was that if we bought a little entrepreneurial insurtech firm, brought them in and stuck them in our offices, it wouldn’t be the right environment. So, we’ve set up separate companies – AXA Strategic Ventures and AXA Partners – that view the market the same way an investment or venture capital house would, considering clever ideas and good companies in the insurance space. They’ll work with them to build solutions, provide funding or find the best way to use what they’ve come up with within our business.
We can offer a warm introduction to AXA which, as a group, has more than a hundred million customers globally. I think this gives us a bit of an edge over VC funds and it’s proving really successful.
TIM: To sum up, what’s the aspiration?
DW: In the old days, we would take a premium from somebody, then hope we didn’t hear from them for 12 months because, if we did, they had a claim.
We want to move from just selling this promise to pay, to providing other services – to move from payer to partner. Because, when somebody has a claim, it’s much better if they’ve been interacting with us on a regular basis.
Whether it’s using Alexa, other connected devices in the home, or through partnering with more insurtech startups to solve problems that have been in the insurance industry for years, or to provide additional services, that’s the way forward. It’s going to be a glorious future, as long as we make sure we’re focussed.