How to Be Tech-Friendly Without Losing the Human Element

Technology is a great amplifier. It amplifies the power of humans and allows us to scale our ambitions. At Clearcover, we take this belief to heart—and it is motivating us to build a smarter car insurance choice. Rather than approaching new tech advancements with caution, our company ethos is to proactively integrate smart technology into every function. Technology challenges us and teaches us how to meet our full potential.

Most of our leadership team comes from the traditional insurance carriers, such as Allstate, American Family, Farmers and State Farm. These companies are terrific, and we learned a lot during our time. However, I also observed a commonly entrenched attitude—technology was purely a point-solution or a method to automate a current process. That’s not necessarily wrong. But it is limiting and can result in stunted growth down the road.

At Clearcover, we had the fortune of building the company from scratch. This allowed us to design our capabilities from the ground up—something that is more challenging for companies with a previously established technology infrastructure. As a result, this afforded us the opportunity to think about how each component of our technology would influence the broader, end-to-end consumer experience.

Technology adoption can slow when people are wary or content. Car insurance is a $200 billion, century-old industry. You can file this under, “If it ain’t broke, don’t fix it.” This is what I’ve observed as the impact of that attitude:

Consumer perception of the insurance industry is generally negative. At Clearcover, we recently commissioned a survey of 800 people across the country to find out what the new generation of drivers thinks about car insurance. One of the biggest takeaways was that young drivers are actually pretty confused about car insurance. Survey respondents knew exactly how much they were shelling out for car insurance, but many didn’t know what they were getting for their money. Seventy-three percent of millennials feel that car insurance companies make it intentionally difficult to understand policies (compared to 51 percent of the population at large). We know this isn’t the case, but outdated communication systems have left customers frustrated.

The ability to recruit younger talent with tech-savvy skills is becoming more difficult. There are currently 700,000 open tech jobs in the United States, and the competition to hire qualified talent is at an all-time high. Yet most college graduates reveal negative attitudes when asked about working at an insurance company.

Technology can create differentiated experiences, but it also stands to create structural cost advantages. Our survey found that nearly nine out of 10 drivers would consider switching car insurance providers if they found a better product at a better price—a definite wake-up call to insurers. In comparison, the newer generation of insurance companies are using technology to build a partnership between their people and customers.

Technology can create differentiated experiences, but it also stands to create structural cost advantages. Here are some examples of companies that are succeeding with this strategy:

Gabi is a digitally driven agent that uses technology to compare auto and home insurance rates across providers. They meet customers where and when they want, using technology to modernize the consumer shopping experience. Essentially, Gabi connects to the insurance carriers’ self-service portals for a customer’s current provider to give apples-to-apples comparisons with alternative carrier policies, supported by agents to help consumers who want it.

Jerry, similar to Gabi, is a personal insurance shopping platform that provides quotes across multiple insurance products. With as little as a customer name and cellphone number, Jerry can return the drivers and vehicles in the household and allow consumers to quickly get quotes from multiple carriers.

(Editor’s Note: Both Gabi and Jerry are API partners of Clearcover, an MGA.)

DealerPolicy has created a technology platform that connects consumers with insurance carriers in a key moment of need: when they’re buying a new vehicle at a dealership. By integrating with third-party data sources during the quoting process, they increase the accuracy of the quotes being provided and make it easy for you to purchase during or following your visit at the dealership.

Credit Karma has expanded its Auto Hub product within its personal finance app, allowing consumers not only to monitor the drivers and vehicles associated with their address but also to provide an insurance shopping experience. With the breadth of data it has available, Credit Karma is able to streamline the overall consumer experience and continue to optimize informed offers it makes available to users.

Not Just Tech

Even with the proliferation of self-service technology offerings across a variety of disrupted industries, when it comes to car insurance, we have learned that customers aren’t ready to go fully digital. At Clearcover, we believe that agents—or advisers—will always play a role in the insurance shopping experience. But the form the advice takes may change over time.

Survey Says

Clearcover polled 800 U.S. residents responsible for purchasing insurance for themselves and their families and who held an active auto insurance policy.

Among the findings for all respondents:

87% would consider switching carriers if a new brand offered easy-to-understand policies and competitive pricing.

63% say their insurers clearly communicate what the policy covers.

90% prefer a hybrid insurance product blending both human and digital elements.

76% want digital improvements to make the purchase process easier and insurance policies that are accessible via mobile phone.

Focusing on millennials:

40% aren’t clear on what expenses their insurance company would cover if they got in an accident.

73% feel that car insurance companies make it intentionally difficult to understand policies.

Note: The survey was conducted at 95% confidence +/- 3% margin of error.

Going back to our survey results, 90 percent of respondents said they want an insurance provider that offers a hybrid service solution—one that blends both human and digital support. At Clearcover, we don’t separate our customers into those who want support via technology and those who want it via real people. We try to be thoughtful of the human experience during each interaction and offer consumers different ways to engage that make the most sense in that moment.

Clearcover’s technology platform allows us to integrate easily with distribution partners and enable consumers to buy from us directly—and over 75 percent do so completely online. But we also have licensed Customer Advocates that are available by phone, email or chat to support customers who want to talk to somebody before making a decision.

Over 90 percent of our customers have downloaded our app and set up their account on the app. In addition, over 60 percent of our claims get submitted through our app. Submitting a claim digitally with photos allows us to virtually adjust most claims and get customers paid that much quicker. But, again, we have a team of Customer Advocates who are available for those customers that prefer to speak to someone directly during this particularly stressful time.

We’ve also built the same capabilities for agents—the ability to integrate with our APIs to quote and sell Clearcover’s product (as Gabi and Jerry do) or to quote through a traditional agency portal experience. Whether customers want to buy direct or through agents, we strive to deliver the best customer experience and to be known as being easy to do business with.

Ultimately, all of the insurance people that I know care deeply about their customers—but that’s not what the public thinks.

Source: Carrier Management – reposted on 4/17/20 (original date 1/13/20) Author: Nick Shutwell

Why Leaders Need to Resist Rewriting Insurance Contract Language

Soon after the attacks on the World Trade Center and other locations on the morning of September 11th, President Bush declared that the atrocities were “an act of war.” That statement prompted a call to me from a friend and influential member of Congress from Buffalo, John LaFalce, during which we both concluded that the attacks, those horrific, did not constitute an act of war. At least not in the insurance sense.

Of course, Bush was not speaking in terms of–or even thinking–the war exclusion contained in most property/casualty coverages. That language largely excludes coverage for acts of war by a sovereign. If he had meant it so, that could have meant that the insurance industry would not be on the hook for any of the losses arising from the attack. He surely meant it more figuratively, more to drive a point home and provide a sense of what we were up against. He did not mean that the industry would not have to go on to pay the $30-40 billion or more that they did shell out for everything from the business interruption claims to the rebuilding of the World Trade Center complex.

Over the weekend, our nation’s current chief executive, President Donald Trump, waded more deliberately into yet another discussion concerning business interruption coverage in times of crisis. As reported in Claims Journal and elsewhere, the President said that, of course, business interruption claims should be paid for COVID-19 losses. After all, businesses have paid lots of money into business interruption policies over the years, so why shouldn’t they cover the losses that have arisen in recent weeks. Only if a policy excluded “pandemic” would they be beyond reach, he opined, even acknowledging the presence of exclusions in typical insurance policies.

Just like President Bush, perhaps you would expect nothing less from a President who is a former businessman who has an uncanny ability, critics aside, to actually understand much of what is actually happening on Main Street and to tap into the sentiment surrounding that reality.

One Event, Not Two

As a business owner I would want to agree wholeheartedly. My partners and I pay property/casualty insurance premiums, and it’s always nice to get a return somewhere along the way for all that investment. But as an insurance lawyer, former insurance regulator, and defender of the rule of law and the import of adhering to contracts that are drafted and signed by two parties committing to certain obligations, I am far less agreeable to the President’s position. As the person who had to tell then-New York governor George E. Pataki that the WTC disaster was one event, not two, I consider myself somewhat practiced in the high art if not science of interpreting insurance contract language notwithstanding the populist pull of giving the people what they want regardless of what the contract might say. The Governor, for his part, sought the right answer to the question and not the expedient one, even if it meant that $ 3.5 billion in insurance funds would not be forthcoming to the State.

The President, just like President Bush and so many other leaders, is paid to lead the country in times of crisis and they both have done well in that respect. But he is not an insurance contract expert, has not had experience from the other side of the claims table and was not thinking to himself when he said those words that he was providing a dispositive legal opinion on whether longstanding insurance policy language was sufficient to support a claim for business interruption benefits. He was giving a classically-Trumpian opinion as a long-time businessman and champion of Main Street as to what he thinks should be done with these policies. Of course, you would also not want him to opine or articulate that he thought that business interruption coverage does not apply. That opinion would suffer from the same shortcomings—from an insurance perspective—as well as be seriously politically tone-deaf.

His voice is certainly the loudest, but by no means is it the only one in the business interruption coverage debate. Many states have seen the introduction of legislation to virtually re-write business property coverages regardless of years of jurisprudence, regulatory oversight and industry practice. Some have even tried to annex the workers compensation system by presuming exposure to COVID-19 to be an industrial hazard. Lawsuits are already hitting the closed doors of courts around the country like newspapers thrown on one’s front stoop. The froth is palpable and the parties highly motivated to continue the drumbeat of a message that insurance is an untapped resource. Of course, if we had adopted this same philosophy to compel insurers to pay for the flood damage of any one of a number of recent storms that is clearly not in the typical property/casualty policy, or asked them to underwrite any war fitting into the exclusion definition within such contracts, this current discussion would be merely academic for there would be no property/casualty industry to target.

Federal Response

Ironically, the early recognition of the limitations in business interruption coverage in this crisis is likely to have served as a catalyst for the swift federal response to the burgeoning crisis in the form of the three pieces of relief legislation, including that to deliver relief checks to much of the population, and that to provide payroll protection and a long-term line of credit to businesses.

As in other instances, this crisis is likely to lead to changes in the way we cover pandemics. Some of that change may be reflected in new insurance contract language, a federal program like the terrorism or flood insurance programs, or some other special purpose entity. But that is for after the crisis, and not during it. Let the President continue to champion the needs of the public during this time in his speeches and tweets, but let’s not go crazy thinking that he is lending anything more to the claims process than President Bush did when he correctly said we were at war. These contracts will continue to be interpreted as they should be, will be upheld by a judiciary largely of Mr. Trump’s remaking, and a great many will be seen as not providing the kind of coverage the President might like to think they do.

Source: Insurance Journal 4/16/20 Author: Gregory Serio