While the full impact of the Royal Commission is not yet known, the perceived value of insurance products and the negative portrayal of insurers has the potential to further erode customer trust. Although many insurers genuinely continue to strive to be customer centric, the renewed focus on customer expectations means the industry will need to embrace this emerging challenge so as to better invest and re-engage with current and future customers.

What is abundantly clear is that there is a new era of community expectations and focusing on customer expectations should take priority over any incremental margin increases or competitive positioning. It must also be acknowledged however, that it would not be a good outcome if the pressure of customer expectations should result in illegitimate claims being paid. While this may be in the individual member’s best interests, it is likely not in members’ best interests as it will result in price increases for the whole member base.

Engaging through the relevant channels

Customer engagement has always been a challenge for superannuation, and it is no surprise why. The incoming Protecting Your Super package is going to give cohorts of members a choice about whether to retain life insurance cover or not. Trustees who can engage with their members will mitigate against the risk of deteriorating the integrity of the risk profile of their insurance pool. A more engaged membership would lead to higher opt in rates and what would likely result in more favourable pricing outcomes.

Life insurers will need to promote the benefits of insurance protection, tell the good news stories and reassure a market that is increasingly looking the other way. All trustees and insurers have success stories the industry can be proud of. It’s time to tell the stories about returning members to work or to wellness, or how families have been provided for after the loss or impairment of a loved one. These marketing strategies are regularly employed by other industries.

As well as earning trust back from existing customers, better engagement is needed with new customers and younger audiences, for whom retirement and insurance is a so far out of sight and mind. Social Media News’ November 2018 report, ‘Social Media Statistics Australia’, shows that 96 per cent of superannuation funds across the industry were using LinkedIn for marketing, while on average less than 10 per cent had a presence on significantly more popular forms of social media such as Instagram and Snapchat. While the move to use social media channels to engage is positive, directing to other forms of social media could be more effective.

Embracing technology for claims

Members need to be at the core of all decisions, particularly the claims decisions. Harnessing new practises and technologies can reinvigorate the claims function, and allow assessors to focus on the member, rather than just completing process driven tasks.

Customers are increasingly demanding and make decisions not only based on price, but also convenience, a trustworthy brand and good customer service. As many companies are now learning, customers take their best digital experience and expect this to apply to every situation. Despite this, the ability to benefit from automation or self-service functionality remains uncommon across the life insurance market. A greater use of automation and self-service technology could better connect customers with an insurer’s brand and ensure their engagement is deeper and more valuable as a result.

To build customer confidence, it is paramount that future technologies also support the consistent and transparent delivery of claims management outcomes. Best practice will demand that claims assessment and philosophies are embedded in technology to standardise the way claims are managed. This would ensure that desired outcomes for each customer are aligned with the stated claims philosophy, for all relevant conditions.

Using technology, insurers and their partners can collaborate and define claims assessment rules that are reflexive and identify opportunities for streamlined assessment and early engagement with specialist care. This optimal solution could also manage and track a member’s claim journey in a way that is fast, tailored and keeps the member informed from end to end.

Pacific Life Re recently commissioned a consumer research project to help understand the preferences of Australians when engaging with their life insurance. Unsurprisingly, this research identified that the majority of people (66 per cent) would prefer to lodge an insurance claim online instead of using the traditional methods of telephone calls and mailing paper claims forms. This demand was higher for younger age groups as outlined below.

This research also identified that most people, if they were unable to continue working, would prefer their claim be paid out in regular instalments (instead of a lump sum payment), more conveniently correlating with ongoing rehabilitation treatment expenses. This would encourage people to commit to an ongoing rehabilitation program, increasing the likelihood of them returning to wellness.

Returning members to work and wellness through rehabilitation

Too often, rehabilitation is utilised on an ad hoc basis. Having a responsive identifier in place that consistently flags rehabilitation opportunities early, would allow insurers to prevent claims sitting dormant while a customer’s health deteriorates, leading to more extreme healthcare measures and higher costs in the long run. Product limitations such as waiting periods should also be reviewed as they often delay a claim or assessment which could hinder early engagement and rehabilitation opportunities. Success for a rehabilitation function should not only be measured in return to work outcomes. Returning members to wellness should be just as important.

Looking to the future, there is a powerful opportunity where big data, wearables and automation intersect to enable early identification of deterioration in health. Capturing and analysing data on sleeping patterns, fitness and general health would allow the insurer to identify opportunities to contact members before a potential claim. This also represents another powerful opportunity for engagement. The health insurance sector demonstrates that this is possible, as it already utilises real time data integration, connecting digital services to optimise health coaching.

What next?

Community expectations have well and truly shifted, and this is a crucial time in which the industry must work hard to win back the trust of its customers – and a big part of this means genuinely engaging with customers. Insurers that harness new technologies to reach, service and meaningfully engage with their members, to track and ensure their optimum health at all stages, will truly implement effective change in their claims function.