Digital insurance is transforming the insurance industry. From buying a policy online to submitting a claim on your mobile phone, insurance is no longer the complex financial product it used to be for the average consumer. Digital-native providers such as Lemonade and Oscar are now offering insurance plans exclusively online with no physical touchpoints with the customer. All this has been made possible by the advances in digital applications, online identity verification, better underwriting models, and faster claims review. COVID-19 has further accelerated the insurance industry’s transition to digital-native models. The proportion of consumers in the United States who preferred to buy insurance online grew from 17% in 2011 to 29% in 2020. 

In spite of the rapid advancements in digital insurance, several bottlenecks still mar the overall consumer experience of signing up for and managing insurance policies.

Policy Onboarding: Digital onboarding for an insurance policy continues to be a strenuous process for consumers. In many incumbent insurers, digital onboarding is a mere digital translation of the cumbersome and manual offline process. Over a dozen pieces of information and documents are still required to be gathered from customers as part of onboarding. This makes the process of completing the form onerous, error-prone, and time-consuming, even in a digital environment. Identity verification and authentication of buyers are also crucial parts of the onboarding process, which is often ignored. Identity takeover fraud is one of the prime factors contributing to the increasing menace of fraudulent claims. Finally, customers’ expectations of frictionless, omnichannel insurance onboarding are influenced by the superior experience on social media platforms. 

Verification of Claims: Legacy claims registration processes are fraught with inefficiencies, are data-intensive and repetitive in nature, resulting in delays in claims settlement. Delayed claims result in poor customer experience as they are anxious when they file their claims and expect a speedy resolution. Modern fraud detection built on cutting-edge technologies promises a huge potential to reduce operating costs for insurers and help prevent massive fraudulent claims. The FBI estimates that the total cost of insurance fraud (excl. health insurance) is over $40 billion per year. Insurance fraud costs the average US family between $400 and $700 per year in the form of increased premiums.

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Technology to Address Challenges Plaguing Digital Insurance Companies

Although technology has obvious answers to the above challenges, improving consumer experience in insurance onboarding and claims settlement requires rethinking legacy processes from first principles. Consolidating parts of the process that may be redundant in the digital context, auto-filling verified data, automating identity verification, and looking for means to reduce exceptional manual processing are some of the fundamental ingredients in crafting a digital insurance onboarding solution.

In claims management, solutions that centralize and organize large amounts of data help implement artificial intelligence to identify and mitigate identity fraud. Image analysis can determine if loss photos submitted by claimants have been tampered with or if the image timestamp is before the date of loss. In addition, text mining technologies can read and analyze claim documents and identify trends and patterns associated with keywords. Digital insurance requires specific PII data for auto-filling an application. An ideal onboarding solution will fetch verified PII data with the consumer’s consent from trusted sources to auto-populate onboarding forms. This not only accelerates the onboarding process but also minimizes human errors and reduces the need for manual reviews. 

Some of the benefits drawn out of auto-filling insurance applications include:

• Enhanced Customer Experience: Auto-filling an application reduces the friction in onboarding and helps in blocking fraudulent registrations. Mitigating identity fraud at the entry point without engaging in manual reviews is a critical success factor for seamless onboarding. A robust auto-fill process first works towards authenticating the applicant’s legitimacy before auto-populating PII data from verified identity data sources. An auto-fill that is completed accurately results in fewer keystrokes, lesser form-filling, and faster fulfillment. Apart from ensuring a frictionless experience, auto-filling forms reduce PII data error significantly, helping providers maintain clean CRM and contact data.
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• Reduced Cost of Acquisition: Insurance leads come through multiple sources, and identifying those likely to convert upfront can dramatically decrease the cost of an acquisition. Identifying applicants that may make ideal policyholders is crucial to keeping the risk—and hence the price—low. The cost of acquiring credible customers can be quite hefty and deserve careful management to ensure that the business is managed profitably. By pulling in identity data from verified sources to create a consumer profile of a brand new lead, insurance providers can ensure they’re marketing their services to ideal consumers and reroute or triage others to providers more suited to the consumers’ needs, saving sunk acquisition costs on applicants that may not convert.
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• Increased Conversions: As per a study, forms in the finance sector had a 75% abandonment rate. Utilizing auto-fill significantly impacts a form’s completion rate by making form submission more attainable. Fast and accurate quoting by the insurance firm depends on completed application forms that are quick and easy to fill. Irrespective of the channel, with verified data in the form generated through auto-fill, an accurate quote can be created, satisfying the customer and leading to more conversions.

An ideal auto-fill solution will look to improve the velocity and efficiency of customer onboarding while simultaneously preventing identity theft. Prove Pre-fill™ is a solution that can simultaneously solve application abandonment and security issues associated with consumer applications. By auto-filling data using Phone-Centric Identity™ and adopting the PRO™ model of authentication and verification, insurance providers can increase sign-ups, reduce OPEX, offer better SLAs for their services, reduce fraud incidents, and generate customer loyalty.

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