Why is today’s auto insurance customer increasingly demanding, outspoken, and likely to switch insurers? Why are customer acquisition costs increasing and retention rates decreasing? Make no mistake: There is a new group of auto insurance customers in town; customers driven by an entirely different set of wants, needs, and expectations compared to previous generations. To cater to them, Virtusa proposes to optimize the auto insurance claims process with an interlinked set of innovative strategies and technologies that will build customer loyalty in this new demographic while improving efficiency and managing costs for the insurer. This millennial solution is a comprehensive plan to address the current disconnect between insurers and their 21st-century customers.
Meet the Millennial Driver
Millennials are the baby boomers of the 21st century, and their numbers and ideologies are quickly overcoming all other demographics. They are tech-savvy, fast adopters who rely on user reviews and friends for decision making and expect instant gratification.
Their tendency to consume immediately, evaluate quickly, and then adopt or denounce socially has accelerated the pace of change on a global scale. It’s time to recognize millennials as primary stakeholders and evaluate their auto insurance wants and needs. Identifying these alone helps to solve half of the puzzle. The other half is designing an offering that satisfies millennial customers in a cost-effective and profitable manner.
Getting Inside the Millennial Driver’s Head
They are information seeking and price conscious. Millennial customers use site aggregators and online retail distributors to compare prices and product features.
They are tech-savvy. These customers want to manage as much of their life as they can online. They have an insatiable taste for new gadgets and devices.
Social media is king. Millennials are deeply influenced by their peers and by experts in the social network. They are accustomed to the accelerated evolution of ideas and are quick adopters of new social media products.
They expect good service. These consumers are accustomed to immediate gratification and expect instant access to information.
They don’t expect or demand privacy. Millennials repeatedly click ‘I agree’ on Google and Facebook without a second thought and without reading the terms. The millennial user is willing to trade privacy for free access and more features.
The millennial customer is nothing like the auto-insurance buyer of past. So how does the industry approach these demanding, well-informed, price-conscious customers who mistrusts our motives but trusts and interacts heavily with social network and loves new technology? Simple, we win them over with excellent, reliable, innovative offerings provided with the help of ingenious new high-end technologies.
The Millennial Claims Servicing Solution
Efficient claims servicing requires detailed, reliable, and timely information about an incident so that it can process the claim with minimum expense in the shortest possible time. The ideal claims servicing solution will synthesize automation, customer enablement, and cost-effective operations while improving the customer experience. Virtusa proposes a comprehensive six-part claims servicing solution that meets the needs of the millennial driver.
Part One: The Sentinel
A vehicle telematics device called the Sentinel will be installed in the vehicle. The Sentinel will consist of the following:
- A vehicle telematics core to record driving behavior like speed, location, and time
- A communicator to transmit distress signals to the insurance company
- A configurable device to detect shock and capture images during the incident
The Sentinel will provide the insurance company with extensive detailed information engendering faster and more accurate claims investigation. The captured data can be used to reconstruct the accident and verify the testimony of those present at the scene. This will help insurers avoid fraud and make informed judgments related to third party claims.
The telematics device can also regularly transmit real-time data related to driver behavior (acceleration, braking, cornering), location, time, and so on. This data can be analyzed and modeled by underwriters to predict and manage risk more effectively and adjust premiums based on driving behavior. This helps insurers deliver on the price front for the millennial customer, which leads to increased adoption and gains in market share.
Part Two: The 24/7 Shared Services Command Center
The command center will receive an SOS signal from the Sentinel (or from the smartphone app in the case of non-impact distress) and will be responsible for calling up the customer proactively to check if any support is needed. Based on the customer’s inputs, the command center will evaluate the situation and dispatch the 24/7 mobile squad if necessary. This will keep the size and cost of the mobile squad to a minimum. It also provides a human touch to the distressed customer, which adds a customer touch point. The command center is responsible for managing the entire process by updating the enterprise claims management system with all of the required details.
Part 3: The 24/7 Mobile Squad
An around-the-clock accident response squad will report the accident site in real-time, if needed, to assist customers. The mobile squad personnel will perform necessary due diligence on the accident site and help the ailing customers in cases of serious accidents including the arrangement for any necessary towing or alternative transportation for the customer. They will also record the claim with first-hand investigation details. This will ensure that the customers are safe and their interests are protected.
The presence of a helping hand during a crisis will transform the customer experience in the auto-insurance industry. Investment in such a service will be a marked competitive differentiator that will help the insurer gain market share. Capturing accurate information upfront will result in a shorter, more simplified claims cycle that is financially beneficial to both the customer and the insurer.
Part 4: The Smart Phone App
Every customer will be encouraged to download a free smartphone app that will help him contact the command center quickly and efficiently in a time of distress, capture important information at the scene of the incident, and prepare and submit a loss report – including accident pictures – at his own convenience. The smartphone app will also enable customers to view account information and track the status of claims.
The data from the app should be integrated with the enterprise claims management system to derive the maximum mileage from the app. The presence of actual information from the ground will help to reduce loss-adjusted expenses and incurred losses.
Part 5: The Fellow-Insured SOS Program
This program could encourage every insured customer to put a visible sticker on his or her vehicle. If a fellow-insured spots another customer in distress (identifying the customer by the sticker on the vehicle), he or she can assist that customer by using the smartphone app to alert the shared services command center and to capture accident details, providing claim managers with first-hand reports. The fellow-insured will receive social and economic incentives to encourage the use of this technology.
This creates a network effect that can become a very powerful tool for mutual protection and safety. This will create a sense of kinship among customers that leads to lower customer attrition. It can also open the gates to opportunities for insurers to engage with millennial customers in their comfort zone: social networks.
Part 6: Social Media and Analytics
Data analytics from social media will support this six-part comprehensive solution. Alerts, reports, and notifications will be generated at various points within the claims process through analysis of social media data to help claim managers and other users effectively handling the claim.
The data stream will be monitored for claimant sentiment. It will allow claims handlers to manage claimants, thereby improving the customer experience proactively.
A Comprehensive Solution
These six interlinked components of the millennial claims servicing solution form a comprehensive system that serves millennial drivers in ways that are meaningful to them. Actual on-site help in an accident, state-of-the-art communication, lowered premiums for good drivers, and a feeling of fellowship and security on the road all deliver an unrivaled customer experience. By providing actual help on-site during a crisis, the insurer can differentiate itself in the minds of the customer, thereby increasing market share. The smartphone app, the 24/7 mobile squad, and the fellow-insured SOS program will trigger immediate loss notifications with more detail and accuracy than ever before.
These, along with vehicle telematics from the Sentinel, are designed to capture better information and make claims investigation simpler and quicker, which will potentially save litigation costs and shorten the claims lifecycle. It’s a millennial solution that makes today’s auto insurer relevant and attractive to the game-changing millennial driver.