Black Swan Events Give Insurers Occasion to Improve Service and Efficiency

With extraordinary events becoming common, insurers can create cost savings and operational efficiencies and customer service improvements by integrating disaster response with day-to-day operations.

How many storms of the century, fires of the century, or droughts of the century can one century have? For the insurance industry, it's been a time of high stress, high volume activity, and high costs—a roller coaster ride that will continue if once rare weather patterns persist as the new norm. By definition, an insurer's plan for disasters is an operational outlier. When a catastrophe strikes, the insurer quickly switches gears from business as usual to meeting customer needs in the crisis zone. Customers of insurers that have kept pace with technology have seen improved response solutions from mobile apps to mobile claims offices. But with extraordinary events becoming common, now is the time for insurers to consider integrating their innovative disaster response plans with their day-to-day operations, to be scaled as needed. It's a strategy that has the potential to create cost savings and operational efficiencies while upping the game in customer service.

Embracing Customer-Oriented Technologies

A triad of technology solutions can be the linchpin for all sorts of business improvements—a triad that consists of consumer-centric portals, including mobile apps; augmented reality applications; and supply chain applications. While many insurers have successfully adopted one or more of these for crisis management, the true game changer is to adopt all of them and deploy them ubiquitously.

Let’s look at the portal concept first. Insurers should provide their customers with a consolidated “account” via a web portal and mobile app so they can easily create and maintain a thorough record of their home and possessions to be stored with relevant external data accessed by the insurer. The tools could include:

• Internal data and room records showing the contents of each room and an overall possessions list via panoramic photos or videos using drag-and-drop technology

• Cloud storage of critical documents, such as birth certificates, tax records, house title, utilities bills, mortgage statements, and bank records

• External data, such as GPS, satellite imagery, street view, photos and historical proxies, home age, construction, and size

All this can help customers rapidly file claims and insurers rapidly document and quantify losses to quickly settle those claims. Since you know what is being insured, you have a platform to assist with home improvement, maintenance, and a range of other services. This kind of consumer engagement can help you tailor coverage and pricing as well as cross-sell additional services.

Then there are “augmented reality apps”—apps that can help customers locate resources and services in a crisis, or help customers find family and friends through digital tracking. Since customers will need access to funds immediately for emergency supplies or temporary housing, insurers can use these apps to facilitate digital money transfers.

[Related: Hurricane Sandy Proved A Perfect Storm To Test Insurers' Mobile Capabilities .]

In tandem with GUI technologies is social media, which facilitates information sharing that can be indispensable in a crisis. An active Twitter or Facebook feed via cell phone can connect customers who need help and keep them apprised of how to get it, what services are available, and other relevant information. A vigorous social media program can cut down on calls at customer service centers and better target resources, creating cost savings.

Finally, there’s technology that helps insurers develop a supply chain orchestration to coordinate a massive response and mobilize resources to accelerate the way out of a crisis. Supply chain orchestration facilitates the management of licensed contractors and vendors—from roofers and tree trimmers to vendors with access to generators, food, and clothing—and associates them with specific geographies and activity.

By encouraging contractors from out of the area to participate, you can create a larger pool of resources to help customers keep charges low and prevent price gouging. This is a key way to meet customer expectations and generate a new revenue stream.

The New Insurer in Real Life

These aren’t simply front-end marketing tools to woo tech-savvy customers. Implemented correctly, this triad of integrated customer-oriented technologies can be seamlessly woven into your business to accomplish a variety of goals.

On the consumer side you create a better relationship with customers before disaster strikes, leading to less ambiguity and mutually agreed upon records that can expedite claim processing. On the business side you reduce fraud and increase business, improve field operations for service reps, and create long-term financial efficiencies. Data-driven, these solutions can push information to every part of your business to help it run efficiently and smartly.

Many insurers have used technology to improve their disaster plan. But the number and intensity of catastrophic events points out that this is a singular moment when insurers can change their relationship with customers for the better and improve their bottom line along with it. There’s so much more insurers can do before an event—and so much more that can be done before the next one inevitably strikes.

About the Authors: Mark Foster-Collier is Consulting Partner for Wipro Consulting Services. He is based in London and may be reached at [email protected]. Jonathan Roberts, also based in London, is a partner in Wipro Technologies' Insurance Advisory Group. He can be reached at [email protected].