Dan Benatan
Financial services have long been recognized as particularly suitable for
e-commerce as they are entirely conceptual and require little physical delivery.
Insurance is a good example for study, because it doesn’t share the inertia
effect caused by the complexity of changing banks. Although there are some
success stories, the growth of online insurance has been slower than many would
have imagined.
One significant reason for this is that the online processes offered by many
insurers are less attractive than working through more conventional call center
or face-to-face channels. Among the key factors that influence this are the
nature and purpose of the underlying legacy systems and the failure to reassess
and redesign business processes to exploit the power of the interactive Web
environment.
Giga’s detailed study of many sites in the application of our Web Site
ScoreCard audit methodology has shown this to be endemic where the business
practices were well established before the Web. The personal insurance market is
simply one that illustrates this well.
Most of the insurance administration systems in use (both vendor products and
in-house developments) started their lives as tools for insurance workers. They
were designed and created to get policy information into corporate systems for
analysis and reporting.
The initial users of these systems were sales, administrative and claims
personnel who had enough insurance training to understand and interpret industry
jargon and practice. Although it may be less widely acknowledged, these trained
workers also know when and how to successfully shortcut the systems.
In contrast, prospective insurance customers browsing the Web to compare
insurance premiums have not been trained, and most Web-based insurance
applications wouldn’t let them leave a space blank even if they knew which
ones were irrelevant.
Thus, the customers that insurance providers would love to attract are
obliged to provide irrelevant information and answer questions without really
understanding either the relevance or the importance of the answer. To assist
the visitor, companies should provide context-sensitive help functions that
explain what information is required, why it is important and how it is likely
to influence the result.
If the online experience fails to offer this support, then customers will
continue to use the offline alternative at greater cost to insurers. Further
significant improvement can be achieved by simplifying the entire online
process. Most online insurance applications look like electronic versions of the
offline processes that came before.
While this is probably the easiest approach from an implementation
perspective, it makes the application process unnecessarily lengthy and
ponderous.
The interactive environment can be used to simplify and accelerate the
process in several ways, including:
1. Building branching logic into the data collection process. While
every copy of a paper form will contain the same blank spaces to be completed,
an interactive application form can be designed to request only the information
that is relevant to the particular application.
Some of the branching decisions are obvious, such as avoiding the request for
information about additional drivers on a proposed car policy when the applicant
has already indicated that there will be only one driver.
Other branches depend on the rating and underwriting matrices of the specific
insurer. For example, an insurer may apply a rate adjustment if homes in certain
urban areas are fitted with burglar alarms, but the adjustment may not apply in
rural areas. In this case, if the address is known, the process can branch to
request the information only where it is relevant to the risk.
2. Using external databases to automatically complete sections of forms,
where possible. In several countries, it is possible to access commercial
databases of street addresses. In Britain, for example, virtually any full
street address can be obtained by providing the postcode and the house or flat
number. Similar techniques can be used to obtain certain other data elements.
Considered independently, this reduction in keystrokes seems trivial. For the
prospective customer who is doing it for the fifth time, the assistance will be
warmly welcomed.
3. Reducing the range of options offered. Although it can be argued
that companies should try to offer the best possible service to every customer,
there is a balance to be achieved. A process designed to cater to every possible
customer will be far more complex than would be needed to accommodate the
ordinary range of requirements that would satisfy the vast majority.
By consciously choosing to exclude certain options, much simpler processes
can be offered to the remaining customers. If client organizations decide to
exclude certain customers, they should ensure that these visitors are not
dragged through a complete application process before being advised that they
cannot be accommodated.
These are not the only design factors that should be considered in improving
the online insurance application process, nor are these measures only applicable
to the insurance market. The principles, however, are sound and can aid in
providing simpler, easier business processes, offering guidance and managing
visitor expectations.