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Beyond the app: Five ways tech is building better customer experiences in insurance

By , Country Lead, South Africa, Paystack.
04 Sep 2023
Joel Bronkowski, Paystack South Africa country lead.
Joel Bronkowski, Paystack South Africa country lead.

There’s no doubt that the insurance sector has come a long way in the past few years. Not that long ago, you’d have been lucky if you heard from your insurer more than once a year, when it came time to update your policy. And unless you needed to make a claim, chances are you probably didn’t think of your insurer all that often.

Today, insurance is integrated into so many aspects of our daily lives. And, in a highly competitive landscape, many insurers have leveraged technology to improve their processes and create an improved customer experience. In fact, research from IBM shows that 85% of insurers now use CX initiatives throughout the customer journey.

For the majority of consumers, the most visible example of this technological shift is their insurer’s smartphone app. These apps allow consumers, among other things, to insure items and make claims in seconds, and to get emergency assistance when we need it. But the technologies driving these improved experiences go far beyond smartphone apps.

1. Better data collection and analysis

Insurance has always been a data-driven industry. Knowing the risk of something happening (and therefore having to issue a payout) and being able to price products accordingly is vital to an insurer’s ability to survive. It’s part of the reason so many actuaries work in the sector.

In recent years, the ability to gather, process, and analyse data has evolved to allow for even greater insights. Analytics software, for instance, has allowed insurers to assess risk profiles more accurately to offer more personalised coverage options. That means you’re more likely to get a policy that suits your exact needs whether it be for your home and its contents, travel or car insurance policies. This level of customisation also means that your premiums can be adjusted in real-time (the discounts some insurers offer for enabling driver tracking and driving well are a good example of this).

2. More efficient billing and payments

It might not immediately come to mind, but billing and payments form an important part of the insurance customer experience. That’s true in any industry but it’s especially true of the insurance sector. The last thing you want with a product that’s historically been considered a grudge purchase is to make it difficult for people to make payments.

Today, insurers can make use of the same kind of payment gateways that people are used to in their day-to-day lives, further enhancing the customer experience. At Paystack, for instance, we’ve seen several insurers benefit from using features such as recurring billing, and improve their overall experience as a result.

That’s to say nothing of the other advantages that the right payment tech can offer, including flexible payment methods (card payments, bank transfer, EFT etc), payment reminders, automated recurring billing, and more.

3. Improved document management

There was a time, not that long ago, when checking something in your policy or any other piece of insurance documentation meant rifling through your home trying to figure out where you’d filed it. Today, thanks to advances in technology, things are much simpler.

Open up any of your insurance apps right now and chances are you’ll be able to access your policy and other important documents almost instantly. It also brings the risk of those documents being lost or damaged down to almost zero.

4. More personalised and frequent communication

Another important part of building a great customer experience is communication. After all, another way of thinking about customer experience is as the totality of the relationship a customer has with an organisation. And you can’t build a relationship in silence.

Unfortunately, that’s what many insurers tried to do for a long time. A US survey released in 2021, for example, found that anywhere between 47 and 60% of respondents were only contacted once per year by their insurance company. That’s not an ideal approach, especially when you consider that insurers can leverage email, SMS, instant messaging, and in-app messaging to tell customers about policy updates, renewal reminders, and other important pieces of information.

5. Faster claim processing

Possibly the most stressful part of any insurance claim is the time between filing it and finding out if it’s successful and you’re going to be paid out. Technology has significantly streamlined this process. That’s true not just on the consumer side but on the insurer side too.

Automated claims processing systems can, for instance, speed up the review and settlement process, minimising paperwork and enhancing efficiency. In fact, some insurers now boast about being able to settle claims in a matter of minutes.

Improvement through evolution

If you were to ask most people if their overall insurance experience now is better than it was even a few years ago, chances are they’d say yes. And if you asked them what they think improved the experience, they’d probably point to their insurers’ apps.

Chances are though that they don’t realise how many other background processes go into making for that improved customer experience. It’s also important to remember that, on their own, each of those technological changes can only achieve so much. But when combined, they can result in a dramatically improved customer experience.

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