The Psychology of Insurance: How Technology Can Create Empathy, Understanding and Customer Loyalty

Although the insurance industry has made great progress with respect to improving customer experience, there’s no denying that companies take some of the blame for the fact that many people look at insurance with a leeriness — something they have to buy but don’t want to, and once they do have it, they’re unsure if they’ll be treated fairly if they make a claim. Research shows that only 10% of customers trust insurance companies a great deal.

How can carriers create better connections between employees and clients, curb frustrations, and improve empathy for customers, all while juggling a heavy workload? The answer lies with technology.

This may appear contradictory as even the latest artificial intelligence (AI) cannot replace the human touch and social interaction that brings such a deep level of understanding, connection, and compassion. But it’s true — if an insurer uses the technology at the right stage of a process. This article will look at three ways technology can improve the psychological side of the insurance business and help organizations provide a more positive customer experience.

Customers who are more engaged with their insurance company often view them as more of a trusted partner — one who is invested in providing good customer service and who is empathic to their needs and concerns. It’s not that consumers want to be best friends with insurers, but they do want to know you’re there when they need you and that you’re easily accessible. This desired amount of engagement involves having real-time access to the information that frames each interaction and contributes to more customer loyalty. Agents and brokers have traditionally played this role, but as more interactions become direct to consumer, insurers need to adapt accordingly.

One way that they can do that is to consider what channel(s) their customers prefer to use, and focus on providing a more personalized service through tech, analytics, and data. Anticipating needs and understanding where to meet your customer shows that you know and care about them — for example, giving advice to new homeowners. Maybe their home’s heating element is running low, or a small leak is detected, and you encourage them to store sentimental items high up (e.g., in an attic) to avoid flood damage.

There are plenty of new, innovative technologies available today that can help insurers with this. It’s about finding the right tech for the right job. For example, AI can help drive straight-through processing for simple property damage claims, which can be resolved quickly. If a customer has a broken windshield, they don’t want to be on the phone with an automated answering system for half an hour to hear their insurer’s digital empathy for the situation. They just want a list of places they can go to and get it fixed quickly and easily.

For a claim that’s more complex, such as property damage from a hurricane, you need adjusters who can help to facilitate estimates from multiple providers and ensure that the management of the claim progresses in a timely manner. This calls for a more personal touch, and while you want to leave this in human hands, employees can get extremely bogged down trying to manage multiple tasks as a part of the overall process. So for claims like this AI can also help by automating many of those tasks such as digital updates on the progress of a claim — enabling staff to better take care of customer needs.

Most insurers have made significant investments in core systems for both policy administration and claims management, but the speed of change over the past few years — including a newly distributed workforce — is forcing insurers to reevaluate many of their processes to ensure that they can deliver the level of customer experience that is now expected. In today’s highly competitive and fast-moving environment, insurers need to take a data-driven approach to identify the best opportunities for automation, and this is where process intelligence technology can really help.

Using process mining and discovery can ease frustrations for transformation leaders so they better understand where to invest in digital projects. It can help them see processes in real-time and discover where bottlenecks occur, where unnecessary repetition happens, and where data is missing. It can also assess the flow of documents and their data through processes, identifying exactly where automation can make the biggest impact, with additional technologies like AI, robotic process automation (RPA), and machine learning (ML).

What is top of mind now are process improvements and how to manage the increasing amounts of data that is available — then getting the information in that data to the people that need it to make timely decisions during the policy and claims lifecycles.

Technology investments are not just key to improving customer experience — they are key to improving the employee experience as well. Improving internal processes enables your teams to provide better customer service — wherever they are working from. If they have all of the information to answer customer questions and don’t need to hunt down papers and files and dig through several systems, they’ll be able to provide that empathic element needed when caring for customers while software robots do the groundwork for them.

While there are fewer paper documents today than there were before, there is still a lot of information that flows from digital documents, and even more that is in unstructured formats like emails and chatbots. That’s where modern low-code/no-code (LCNC) and intelligent document processing (IDP)/management can be beneficial. Using LCNC to augment processes in legacy systems is becoming increasingly common. In fact, a recent Global Digital Transformation survey from ABBYY showed that 58% of respondents in the insurance industry plan to use LCNC in the near future and 16% are already using it.

LCNC platforms are easy to use and enable insurers to quickly build applications that replace manual processes, such as inputting data into spreadsheets or sending emails. They provide the speed to change, adapt, and create applications to accelerate deployment and can help insurers improve customer experiences and increase process efficiency. It requires little to no coding and there’s very little investment in setup, deployment, and training, so employees can easily get started without having to be an expert. What used to take months can now be done in days or weeks. Many insurance companies are seeing that LCNC technology is helping them stay agile in today’s evolving, competitive market.

The pace of change — including evolving work conditions, new market entrants, and increasing customer expectations — is here to stay. Digital intelligence tools like AI, LCNC, and process intelligence, combined with an agile company culture, is what will drive insurers’ success in 2022 — and beyond.