Ever-changing customer demands, new tools that enable unprecedented data collection, unpredictable events that impact communities with dramatic outcomes—these are all elements that greatly affect the dynamics and outcomes of the insurance industry. That is why insurance companies around the world are investing in digital innovation to contain operating costs, improve customer engagement, and grow their business.
The digitization of the customer journey has redefined the standards of product and service offerings, helping to raise customer expectations in any industry. The most forward-thinking companies have been engaged in creating digital value for years is indisputable, but when is the right time for them to take action if they want to get the best return on their digital investment?
While there is a need to integrate automation and multichannel at all stages of the insurance journey, policy renewal—which occurs on average once a year—is certainly a crucial step, and must be designed in such a way that it is perceived by policyholders as transparent and frictionless.
Why insurance renewal time is so critical (now more than ever)
Today, the insurance industry faces an urgent need to modernize: the typical ways of interacting to ensure a lasting connection with customers that were sufficient until a few years ago must be adapted to the changes that have affected insurers and policyholders. Insurance renewal processes are defining moments in the customer-insurer relationship that contribute, if successful, to long-term business sustainability. This is because retaining existing customers is often cheaper than acquiring new ones. The point to be made here is that through a smooth, transparent, and customer-centric renewal experience, the likelihood of retention increases significantly.
Making renewal processes more efficient in the insurance industry today is essential, for a number of important reasons.
- Customer expectations. Today’s modern consumers, now accustomed to seamless digital experiences in so many contexts of their daily lives, expect the same level of efficiency from their insurance providers. With the rise of digital services across all industries, customers demand fast and convenient processes and easy-to-use self-service tools, including those that remotely enable the renewal of their policies.
- Competitive advantage. In a highly competitive market, insurers must differentiate themselves to attract and retain customers. In this sense, setting up efficient and widespread communication channels can be a significant competitive advantage. Frictionless renewal experiences contribute to an overall positive policyholder perception.
- Operational efficiency. The simplification of renewal processes achieved through the use of digital tools that automate otherwise repetitive and costly tasks improves the operational efficiency of insurance processes. Automation reduces the likelihood of errors, speeds up response times, and frees up resources that can be redirected to more valuable strategic activities. In turn, greater efficiency helps make the business more agile and better equipped to meet the challenges of an industry that bases its core business on forecasting for the future.
- Regulatory compliance. The insurance industry must respond immediately to regulatory developments, both nationally and internationally. Renewal processes must also be adapted quickly and smoothly to regulations and standards that change in time frames that are often very short. This is not just a legal requirement: regulatory-compliant insurance renewal processes enhance the trust of customers, who expect ethical and responsible behavior from their insurers.
- Data use and personalization. The ability to provide personalized experiences at policy renewal increases customer satisfaction and helps cement the insurer-customer relationship. Useful insights extracted from the enormous amount of information the company receives through its touch points can be integrated into insurance renewal processes. This is all thanks to digital tools, which enable insurers to leverage qualified data streams related to customer consumption and behavior to personalize communications, offers, and services.
When it comes to why insurance renewal time is so crucial, the emphasis is almost always on the adoption of digital tools. This aligns with broader technology trends. Insurtech innovations are reshaping the industry, and only insurers that leverage digitization in their renewal processes can stay ahead of the curve. This adaptability is critical in a landscape where technological advances continue to influence both customer expectations and industry standards.
Insurance renewal: time to invest in digital innovation
While the insurance industry has higher customer acquisition costs than any other industry, it is also true that in OECD countries the average retention rate is around 85% (Statista). This means that investing in customer retention is always worth it, not only from a reputational point of view but also from a strictly financial one: keeping an existing customer is much cheaper than finding new ones. On the other hand, limiting your strategy to initiatives geared toward maintaining the current retention rate—relying on the inertia of your policyholders—may not be enough in the immediate future.
According to Accenture, there are already clear signs of declining retention rates. Around 5% of insurance premiums globally—nearly $280 billion—will be impacted by product innovation (with an impact estimated at $140 billion) and will shift to third-party digital platforms (worth $140 billion). With this kind of change, if insurers don’t act quickly to defend existing revenues, they could see their retention rates fall quickly. In particular, by investing in digital innovation focused on the customer experience, the risk of a free fall in retention rates—resulting in a staggering, economic loss—can be neutralized. Some are already running for cover: of the 539 global insurance executives surveyed by Accenture as part of its Technology Vision for Insurance 2020, 82% said their organizations plan to invest at least 1% of total revenues in new digital technologies.
In the insurance industry, the commitment to what might be called “continuous digital transformation” has now become structural (“continuous” as opposed to the notion of a disruptive digital transformation that would have exhausted its innovative charge). The assumption of a continuous innovation paradigm is due to the need to measure up to change: insurance companies must take note of a reality where physical channels are no longer central, while the value of the human element is still dominant. Resolving this seemingly irreconcilable opposition is the integration of new modes of digital communication that are partially or entirely personalized.
Digitizing the insurance renewal process: all the benefits
Traditionally perceived as repetitive activities of little strategic importance, renewals are actually an extremely relevant step. While once performed manually, today these activities can be revolutionized through the integration of digital communication tools, thus becoming an opportunity to deepen and enrich a company’s relationship with the insured.
Digital communication tools enable insurers to collect and analyze large amounts of customer data and leverage this data to create personalized renewal communications that are tailored to individual needs and preferences. Using customer information, such as claims history, timely reporting on policy usage, and communication preferences, insurers can send targeted and relevant messages. Personalized communications not only improve customer engagement, they also foster a sense of sharing and trust. In fact, policyholders are more likely to feel seen and recognized if communications addressed to them directly address their specific concerns and needs.
Digital communication is multichannel. This means that policyholders can interact with insurers through a variety of channels and touch points, including email, social media, and mobile apps. By adopting a fully multichannel communication strategy, insurance companies increase the likelihood that reminders sent are actually received and give users more options to respond to alerts, submit service requests, provide feedback, and independently search for information. In addition, interactive communication methods, such as chatbots or instant messaging apps, can take charge of frequently asked questions, allowing insurers to focus on more complex issues. By diversifying communication channels, insurers create an accessible experience, reaching customers where they feel most comfortable and when they are likely to be most receptive.
Digital tools make it possible to automate renewal reminders, reducing the risk of missed due dates. Automatic email or SMS notifications can be scheduled well in advance of the policy expiration date. Automation not only ensures timely communication, it also keeps customers informed and engaged throughout the process and frees up resources that can be redirected to more value-added activities, improving overall operational efficiency.
Digital tools facilitate content creation and dissemination. Insurers can inform customers about the renewal process, policy details, and any changes to coverage through blog posts, infographics, and videos. Clear and informative content not only helps customers understand products and services that are not always easy to understand, but also reduces the likelihood of misunderstandings or disputes during the renewal process. It is an “educational” approach that increases the company’s authority.
Digital tools support the collection of user feedback through surveys, reviews, and social media interactions. Insurers can use this feedback to evaluate the policy renewal process, identify pain points, and take action to resolve any problems. Feedback loops, which activate a virtuous cycle of continuous improvement, enable insurers to adapt and refine their digital marketing and communication strategies.
Digital tools also provide opportunities to incentivize renewals through targeted promotions, discounts, or loyalty programs. By leveraging customer data, insurers can identify policyholders who may need additional motivation to renew their policies.
Automating contract and quote generation operations not only increases efficiency by streamlining renewal processes, but also minimizes the risk of errors associated with traditionally manual activities, ultimately leading to cost savings.
From data collection to personalized communications, from a multichannel approach to automated notifications, from creating and disseminating tailored content to activating feedback loops—the adoption of digital technologies is critical to staying competitive, retaining customers, and fostering long-term relationships. And this is even more evident in the case of renewal processes. But which solutions to choose?
Doxee’s contribution to improving renewal processes
The digital solutions that are proving most effective in making renewal processes efficient intervene in two dimensions of insurance work: enhancing customer data through personalized communications and managing document processes. In both cases, the goal is twofold: to streamline and enhance insurers’ operations and to improve the insured’s digital experience.
Among the most impactful technologies in addressing the needs of insurance companies, the Doxee product line is able to provide concrete support on two fronts: in acquiring new customers through unattended channels and modes, and in helping build a strong relationship with customers. Doxee is committed to creating dedicated solutions to implement effective customer-centric strategies. Using an approach that combines data analytics and Customer Communications Management (CCM) technology, Doxee offers companies the ability to build unique experiences for their policyholders through personalization and a multichannel approach in a responsible and sustainable manner. Doxee’s Customer Communications Management, natively designed for the cloud and delivered in SaaS mode, is dedicated to the creation, multichannel distribution, and archiving of communications and documents. It can orchestrate traditional paper-cycle based communication processes and natively digital processes. It comprehensively manages the customer experience to support communication initiatives by leveraging the entire data lifecycle and transforms collected information into personalized, interactive communications, such as Doxee Pvideo® videos or Doxee Pweb® microsites.
Doxee revolutionizes insurance renewal processes by seamlessly integrating personalized, multichannel communication tools across multiple touch points. Its product capabilities enable insurers to streamline operations, reduce costs, encourage timely renewals, and ultimately improve customer engagement, satisfaction, and retention.