New and traditional insurers: there will be no digital war

In the face of the current health crisis, new insurers and their promise of a fast, full-digital buying journey have been getting a lot of media coverage in France in recent months.

Coupled with regular capital-raising efforts that demand respect, they are questioning the status of established insurers and making digitalization of customer journeys and the industry as a whole a hot topic.  

On the one hand, there is the promise of speed and a fully digital experience offered by new players on the market; on the other, there is the promise of proximity and human contact that has been developed by traditional insurers over the years. Between the two, however, there is a path that traditional insurers must follow if they are to continue to meet both their clients' expectations and their own business needs. It's all about striking the right balance: there is a fine line to be found and widened, in order to move forward without betraying their promise.  

Are physical and digital two opposing paths?

In the insurance sector, as in others before it, the number of potential digital channels has grown, with websites, mobile apps and social networks. At the same time, with their fully digital buying journey, new insurers are standing out for the speed of their service, which is the basis of their current success. It therefore seems easy to see established players as digital dinosaurs relying solely on their national networks of branches, but failing to allocate enough resources to digitalization. This could not be further from the truth.

They have been putting significant effort into digital transformation for a number of years. Direct Assurance, for example, was ranked top of the insurance industry by Google in its 2021 benchmark of the best mobile purchasing experiences. In late 2020, the wholesale broker APRIL set about revamping its medical formalities and health contracts for professionals by working with the French startup BioSerenity, creator of an innovative telehealth service for cardiovascular diagnosis and monitoring.  

Phygital: a natural evolution

While the promise of speed offered by full-digital players can be attractive, is this really what customers are ultimately looking for? For some, such as generations Y and Z, there is no doubt. However, taken as a whole, insurance customers continue to favor traditional channels (branches and telephone), according to a study conducted by Colombus Consulting.

For example, 42% of people in France questioned prefer to go to a branch to purchase comprehensive home insurance, and only 15% prefer using the website of their chosen insurer.  The physical channel is not dead; far from it. It is, however, set to evolve as digital uses grow, in order to maintain its position as the favored touchpoint for insurance customers and strengthen relationships of proximity.  With this in mind, established insurers do not hesitate to adopt a two-pronged approach. They are going beyond digitalization alone, making the digital journey an extension of their brick-and-mortar branches.

They have begun to digitalize their back offices: all of the processes that are used to obtain and check supporting and contractual documents, such as for the signature of contracts or the retrieval of car registration papers and medical certificates. They are redesigning their workflows to adapt to the age of digitization and simpler procedures, and meet insurance customers' need for instant service, enabling them to switch freely from a digital channel to a branch, where staff can track all the information in their files, whether physical or digital.

 It is, therefore, no longer a question of choosing between two paths today: they must converge to offer a robust and efficient phygital experience, combining speed and proximity.   

Know yourself and know your customers

Striking this balance can be difficult and insurers should not begin without full knowledge of their own system and customers.  Once they have decided to go phygital, insurers find themselves faced with the complex task of coordinating digital specialists in charge of the web journey, IS teams in charge of business tools in branches, and owners of solutions in charge of the customer experience. 

What's more, they don't all speak the same language. So, a shared framework of reference must be established, by mapping out the various touchpoints in customer journeys and measuring their effectiveness using accurate indicators, including performance, time spent at each touchpoint and financial gain generated.  Combined with fine-grain analysis of customer data and the definition of standard profiles or "personas", inspired by marketing tools, this global map can be used to identify digital and physical tools that can be deployed to meet potential use cases, as well as potential synergies that need to be capitalized on to offer a true phygital experience adapted to individual customers. 

Contrary to what some may predict, in no way does the emergence of new players on the market signal the end of traditional insurers. They now have the resources and tools they need to unify their promise of proximity and a personalized digital experience.  

Published in L'Argus de l'Assurance