The importance of continuous customer engagement

As Insurance Awareness Month goes on, Jude Fernando, the Vice President of the Insurance Association of Sri Lanka, the representative body of all insurers in the country and one of the major organisers of the activations, programs and events that are being held throughout September, gives his input on the present status of the industry and its future. Fernando spoke at length about recent trends that have been seen in the industry. One in particular – continuous customer engagement, was specifically highlighted, as Fernando believes that this method, coupled with the growth of digitalisation, could ensure a fruitful future for the Sri Lankan insurance industry. Following are excerpts: 

Q: What are the latest trends you see in the insurance sector? 

A: The lives of customers are subject to constant change; thus their needs evolve as well. In the face of such rapid change, insurers are forced to compete, not only with rivals of their own industry, but with other service providers who offer customers benefits and solutions similar to insurance.

In order to remain relevant, insurers must create a model of continuous engagement as a means of adding value to the lives of the customer, rather than only interacting at times of premium and claim payments. The traditional focus of life insurance has been on providing security for the dependents of policyholders as a responsive measure at an eventuality such as illness, injury or death. However, despite offering the policyholder a significant benefit, this transactional engagement may be lacking in terms of long-term qualitative value. 

In recent times life insurers have begun to focus on preventative interventions by promoting good health, balanced lifestyles, and overall wellness and well-being. By focusing on prevention, insurers are able to give policyholders a better quality of life, as well as being able to maintain regular communication with their customers. This method is also an attractive way to promote insurance awareness as it enables the insurer to present a more positive prospective on the benefits of insurance.

Q: How does continuous customer engagement disrupt the traditional boundaries of insurance?

A: Continuously engaging with the customer cannot be done through the traditional modes of communication such as formal letters and documentation. The continuous engagement model requires companies to innovate their processes, sales models and communication channels. This type of innovation calls for the industry to embrace digital technology as the ultimate tool to be utilised in order to help the industry grow and meet the needs of the new generation.

Digitalisation allows insurers to automate parts of their businesses so that they are able to add value to their customers through innovation, customer service and advisory improvements, and by providing convenient solutions, communication methods and distribution channels, which will disrupt what we traditionally define as insurance.

Q: How does enhancing digitalisation encourage innovation in the life insurance industry?

A: Digitalisation helps insurers foster stronger relationships with the policyholders. By venturing into digital strategies, insurers can provide customers with the constant interaction they look for today. The busy lives of the customers require insurers to be within arm’s reach at any point throughout the day. 

Sri Lanka is a country with a high mobile penetration. With so many mobile users, customers regularly conduct transactions online. Texts, emails and social media are becoming the standard methods of communication, which gives the insurer the opportunity to be present in the daily lives of the customers at all times. 

Digital tools such as wearable devices (FitBits and other such fitness monitors), mobile phones, sensors and GPS systems too can play an important role in innovation. Such devices can be linked in order to provide insurers with real-time customer data. This can provide such a wealth of information, which if used with consent and with the correct data security measures, will help insurers to support their policyholders to enjoy lives of better quality, and offer better service, value, and engagement to their customers. Such data also allows insurance companies to carry out better risk assessments and improve pricing models to benefit customers.

Q: How has the industry incorporated these trends into its long-term strategy?

A: The increasing acceptance of digital technology by the local industry is clearly visible. Digital communication channels as well as digital methods of payment are frequently used by insurers. Companies are utilising apps, launching digital products and solutions, and improving their internal digital infrastructure to enhance processes and internal efficiencies. 

A lot more can be done, but I think the industry is well on its way. Together with the preventive approach to insurance, and the technology and digital innovations, this model of continuous engagement between customer and insurer, has the potential to not just be a mere trend, but the future of insurance.