Advertisment

Simplifying e-biz processes for the insurance sector

author-image
CIOL Bureau
Updated On
New Update

Dan Benatan

Advertisment

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.

Advertisment

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.

Advertisment

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.

Advertisment

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.

Advertisment

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.

tech-news