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By now, insurance professionals need not hear the digital transformation speech. Whether you’re a carrier, broker, or agent, the need to digitize business processes is no longer a question of if, but more of a question of, why now ?

For Life and Annuity (L&A) insurance companies, answering these questions is essential to growing a loyal customer base.

So, why is digitizing L&A insurance imperative now? Here are the reasons making this so critical for insurers.

1) COVID-19 Is Punishing Digital Laggards

While consumer survey data shows that 19% of consumers are looking to add more life and annuity insurance products since the start of the COVID pandemic, the ‘old normal’ has been a no-go ever since the pandemic began in 2020. 

The same can be said for insurance professionals, as vaccination rates still have a long way to go, and the vs. return-to-office vs. work-from-home debate is still a contentious one across virtually every industry.

In parallel, digital and mobile adoption has accelerated at an unprecedented rate and consumers today expect to open up a new life insurance policy and file a claim from their mobile device. Their tolerance for repeatedly calling your contact center to get guidance from contact center agents, and being sent on scavenger hunts that includes clunky PDF forms, printers, fax, or scanning devices, is zero.

They expect to transact with their insurance company quickly and digitally – delivering that digital customer experience (CX) is a competitive prerequisite for insurers.

2) Insurtechs Have Stoked Customers’ Digital Expectations

That personalized and intuitive interaction between customers and their insurance provider or broker is especially crucial in light of the insurtech invasion in recent years. For years now, consumers have become used to intuitively tapping and swiping on their smartphones when shopping online or transacting with their favorite consumer brands.

Insurtech companies like Lemonade, for example, simply recognized the CX gap and have given today’s mobile-first customers more user-friendly and personalized options to apply for new policies and file claims. And e-commerce behemoth Amazon’s foray entrance to the space will only elevate customer’s digital expectations further.

3) Aging Population & New Mortality Risks Are Reshaping Priorities

The World Health Organization (WHO) forecasts that between 2015 and 2050, the proportion of the world’s population over 60 years will nearly double from 12% to 22%.

Globally, 41 million people die of noncommunicable diseases (NCDs) each year, equivalent to 71% of all deaths globally. Many of these diseases, such as diabetes, heart disease and lung cancer can be attributed to lifestyle factors. These factors point to a higher proportion of mortality risk.

For L&A insurers, this heightens the need to engage customers more proactively, specifically in ways that can extend policyholders’ longevity. To do this effectively, trust is critical. Customer engagement needs to be personalized, and it must be delivered in the way today’s customers expect to interact with brands they trust.

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Why Digital Silos & Legacy Processes Are Breaking Life & Annuity Customer Journeys

Despite the need to digitally and seamlessly complete new policy sales and claims, most L&A insurers and brokers today are simply not equipped to deliver that experience.

Despite the fact that most customers today expect to complete transactions in minutes from their smartphones – insurers are still taking days if not weeks to process new policies or claims, and bounce customers across multiple touchpoints in the process.

This is because despite insurance companies’ investment to digitally transform their back-end core systems, their customer-facing experience is typically patched together using several disconnected digital solutions that operate in silos.

Using siloed systems that don’s seamlessly talk to each other adds extra steps for prospective customers wanting to apply for a new policy and for existing ones during that critical time when they need to file a claim.

Legacy processes – like email, PDF-based forms, printers, fax, and scanning machines – needlessly add more touchpoints for customers, who may start a process digitally, but soon after resort to calling the contact center to ask questions not understood from a lengthy and cumbersome form or terms and conditions document. They’re then bounced completely offline, printing out forms instead and using outdated machinery just to fax or scan forms and required documents back to their insurance company.

broken journies images insurance a typical broken life insurance claim journey

Additional steps and touchpoints add pain and friction for customers, damaging NPS and customer satisfaction, and risking that they’ll abandon the sub-par experience and take their business to a competitor altogether.

But the pain isn’t just felt by customers: Insurance employees are flooded with calls and waste inordinate time and effort fielding menial questions that could otherwise easily be covered by a digitized process, inflating Average Handle Time (AHT) and adding staff overhead for insurers.

Agents are mired in the paperwork that comes with digitally incomplete processes, be it getting customers to sign and complete new policy agreements, or collect required documents to process benefits requests.

These broken insurance journeys cost insurers in wasted employee time and resources and investment in incomplete digital solutions.

How L&A Insurers Can Capture the Moment & ROI with Digital Completion

L&A insurers can future-proof their sales and claims processes today by delivering one end-to-end digital customer journey that easily and swiftly guides customers through every step needed to open up and complete new policy applications or assess and resolve claims.

Emerging Digital Completion technology has enabled insurers to complete all customer-facing steps. Agents can send their customers a text message or email that starts a digital session, where they can verify their ID, collect esignatures, forms and required supporting documents, and obtain instant consent on terms and conditions.

Insurers digitizing their customer-facing processes increase their claims settlement ratio while:

  • Slashing time to settle claims by 85%
  • Reducing touchpoints per policy by 60% 
  • Increasing customer satisfaction by 15%

L&A insurers can turn digitally complete journeys into accelerated sales and improved customer loyalty while offloading overhead and cutting costs from paper-heavy administrative tasks that belong to yesteryear.

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