How the insurance industry is utilizing SMS text messaging to develop its business. Solution Perspective

Transcription

1 How the insurance industry is utilizing SMS text messaging to develop its business Solution Perspective

2 The contents of this document is a compilation of information from various sources. It reflects the general context of the insurance industry but no single company. LEKAB Communication Systems AB 2015

3 SMS for quick and effective communication Customer dialogue, the key to success for the insurance industry The insurance industry is in the midst of an exciting development phase that is providing a host of new challenges and opportunities. New and revised regulations have brought about a total rethink within the industry. Long-established insurance companies are meeting increased competition from smaller and more niched players, as well as from companies that do not normally deal in insurances. With strong consumer brands behind them, good consumer insight and established digital channels, these new players are making inroads into the insurance market. Internationalization is growing in pace with larger companies broadening their base from being key players on a local market to being able to offer their service pan-nordic. Digitalization is bringing about rapid changes in consumer behavior and in the way value is created for policyholders. Consumers in general, and policyholders in particular, are demanding more flexibility, accessibility and simplicity. They expect to find information online, get help over the telephone and take advantage of the accessibility provided by mobile channels. It has become imperative for insurance companies to rethink and act quickly. Speedier product development and targeted offers are becoming increasingly important competitive means. A close customer dialogue is a prerequisite for success. This applies to both meeting the customers in their preferred channels and guiding throughout their journey. SMS for fast and effective customer communication Texting offers a number of advantages to those wishing to communicate quickly, smoothly and effectively, right into the recipient's mobile, in their hand, pocket or bag. In Sweden and the other Nordic countries SMS is a relatively pure communication channel, meaning that most texts are read. Texted ques- 1 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

4 Figure 1: A company-wide SMS-platform supports a variety of functions and services used for internal as well as external communication Targeted promotions Offers and suggestions Preventative tips and advice Interactive promotions Reminders Surveys and questionnaires Customer-oriented services SMS-platform Internal services Simplified claims Meeting confirmations One-time passwords Alerts Business info Employee call-ups Internal communication tions usually get a quick reply. Text recipients have the choice of deciding whether to reply immediately or when their meeting is over. Texting is nothing new for the insurance industry, having been used diligently in recent years, mainly as a means of improving internal efficiency; from sending a one-time password to users to rapidly informing an IT department when something has gone wrong. Today, increasingly more insurance companies are realizing the opportunities offered in texting to sharpen their competitive edge and improve their sales. A joint company platform can easily be integrated into the majority of systems used by insurance companies. It is easy for different parts of an organization to add services that communicate through SMS channels. This 2 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

5 lowers the threshold for introducing new services that generate a positive customer experience. As well as bolstering internal efficiency, texting is also a useful tool for finding new customers, bolstering customer relations, increasing sales and developing and improving the service offer. SMS as a means of acquiring new customers When each new customer enhances company performance in this way there is also direct value in investing in new customer recruitment. There are many ways of using texting to attract new customers and increase sales. Confirmations and reminders improve meetings precision Telemarketing is a common way for insurance companies to book meetings between insurance brokers and potential customers. For this type of marketing to work effectively it is important that the booked meetings actually take place. With an SMS service connected to the booking system confirmations can be texted automatically to the meeting participants during booking. The same service enables a reminder to be sent the day before it takes place. A reminder straight into the mobile phone is a self-explanatory service that gives added value to the recipient. Confirmations and reminders reduce the risk of the meeting being forgotten, thus improving meeting precision. When the possibility exists to confirm a planned meeting quickly and smoothly like this it also improves the chances of the meeting actually taking place. Confirmation of meeting with personal advisor Sofia Andersson at 1pm on Nov. 21. Welcome to Insurance Company, Storgatan 32. If unable to attend please call us on We would like to remind you that you have an advisory meeting booked with Sofia Andersson at 1pm on November 21. Welcome to Insurance Company, Storgatan 32. As a complement to this automated business system communication, advisors and brokers may also send their own texts directly to their clients and personal contacts. Interactive SMS promotions activate the consumer In the battle for customers you have to do more than just build brand awareness. It is also important to invite potential customers to a dialogue through various channels. This is where 3 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

6 incoming SMS from consumer to insurance company offers a host of opportunities for companies in the insurance industry. Promotions, outdoor advertising and TV slots encourage consumers to contact the insurance company online or by phone to buy a policy or to get more information. The downside is that the step from being made aware of and becoming interested in a promotional campaign to taking contact is prohibitively large for most consumers. Offering consumers the chance to text their interest lowers the contact threshold. Texting also removes the time element. Instead of having to remember to call when the film has ended or when they are sat on the bus, consumers can show an immediate interest for more information. The marketing departments who work with SMS response often see a greatly increased impact of their promotions when the TM resources can be focused to reach the individuals who are genuinely interested. Dedicated SMS short codes also make it easier to follow up individual promotions. Another alternative is to tag the message with a promotional code or a key word. Offers and suggestions to the mobile phone quickly and smoothly SMS can be used to text and manage offers directly to the mobile phone, an interesting application area for vehicle insurance, for example. For most people buying a new car the requirement for instant vehicle insurance just complicates the whole procedure. Offering the customer the chance to surf to the insurance company's website for an instant quote by entering their new car registration number and mobile phone number greatly simplifies the process. The quote can be accepted by responding to the text. Connecting a specific message with a specific response via a 2- way SMS makes the response traceable and the process highly reliable, even if several messages have been sent to the recipient. The same format can also be used for other types of property insurances. 4 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

7 SMS as a tool for customer service and increased sales The ability to get a relevant message across at the right time makes texting an effective tool in engaging and retaining the company's customer base. An active customer dialogue contributes to a positive customer experience that enhances the opportunities for up and cross selling, while improving the chances of the policy being extended on expiry. When an SMS service is integrated with the company's CRM or customer service system, the SMS dispatch is directed at different types of customers based on the products they have purchased, their interests and their status on the customer life cycle. The connection to the business system makes it possible to trigger automated dispatch containing specific information to a specific person or group of individuals at a specific time. Generate increased sales through targeted promotions The possibility of integrating an SMS service with the company's CRM, promotional or other business system makes it easy to customize SMS promotions targeted at different segments or groups in the customer base. This way the promotional offer, event invitation or information about changes in the insurance offer reaches hundreds and thousands of regular customers at the same time. Integration with the business system enables the dispatch to be automated, thus increasing efficiency and improving communication precision. Reminders of important events Another way to reap the rewards of an integrated solution is to dispatch information and reminders connected to various events in the customer calendar. Brief texted notifications are often looked upon by the recipient as good service. They could be to inform the customer of an invoice having been sent to their internet bank or a reminder of an insurance period coming to a close that needs to be extended. A late payment reminder is also appreciated as a positive service by most recipients if it is pleasantly worded. Dear customer, just to let you know that we have not received payment for your latest invoice. If you have any queries please call us on Kind Regards Insurance Company 5 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

8 Deepen relationships and improve customer insight by using surveys Many insurers use texting to quickly and smoothly send questions or simple surveys to customers. When the SMS service is connected to the company's customer service application, a question can be triggered as a follow up to a discussion to allow the customer to provide feedback. Texting is also an effective way of reaching respondents to marketing surveys. A text can either carry the whole survey or provide a link to a more detailed online survey. Using SMS surveys to gather input improves the company's awareness of their customers' needs and preferences and helps to forge relationships. A service that simplifies and improves customer experience On top of offering a good value and effective channel for marketing and selling the company's products, texting also offers a host of opportunities for companies looking to develop their service offer. Use of the simple, quick and fully mobile SMS channel to enhance service levels and improve the insurance portfolio is still at its teething stage. This means there are still plenty of opportunities for players who choose to invest in texting to improve customer experience and take a position on the market. Reduce damage through preventative tips and advice A challenge for all insurance companies lies in providing their customers with effective tips and advice in order to reduce the amount of damage. One SMS application area is in providing mobile phone weather reports. Information on upcoming cold spells, expected rainfall, blizzards and avalanches helps the re- 6 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

9 cipient to adapt their behavior and minimize the risk of personal injury and property damage. An SMS service that provides preventative advice enhances customer benefit and customer satisfaction while helping to reduce the number of claims. SMS alerts facilitate rapid assistance For accidents and other emergencies, texting makes it easier for those involved to report the incident and receive rapid assistance. Through integration with a mobile positioning service, those involved in a car accident, a boat wreck or are lost in the mountains can simply and quickly alert their insurance company as to their position. At the same time as the incident is being filed with the insurance company the emergency services can be alerted to rescue those in distress. Simplified insurance claims straight from the mobile The possibility of making an insurance claim online gives customers more flexibility, but many policyholders lack a rapid and continuous feedback channel on the claim after it has been filed. This leads to people ringing in to get confirmation of the claim having been filed or with queries about its status and when they can expect to hear something. Texting confirmation of a claim having been filed and giving continuous status updates improves the customer experience. It also cuts down on the number of calls to customer service, thus giving direct savings. It is also possible to offer services for complementing written claims with texted photos taken by a mobile phone. In pace with MMS being replaced by app-based services, new possibilities are arising that simplify the whole procedure. SMS continues to streamline internal processes Many of the new SMS application areas are aimed at helping insurers get closer to their customers through an extended dia- 7 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

10 logue. SMS has long contributed to simplifying and streamlining internal processes. One-time passwords are texted to mobile employees. Insurers' IT departments use SMS services to text alerts and proactive information from applications and IT networks to their technicians. Even at major corporate events, the rapid direct channel is very useful in keeping all concerned updated on activities and agenda. Financial institutions use texting to quickly and smoothly reach out to their employees with financial information related to purchases, mergers and emissions. It opens up a myriad of opportunities for insurers to broaden the internal use of texting to keep employees informed of everything from market updates to latest weather conditions. To sum up, SMS is a powerful channel for companies looking to streamline their communications. The possibilities are many, spanning from improving and streamlining internal processes and reducing costs, to deepening customer relationships, leading to increased revenues. Success factors for SMS in the insurance industry Companies looking to increase their use of SMS communication have a lot to gain from the lessons learned by other players. Three success factors are particularly salient for successful implementations. 1. Successful implementations emanate from the recipient Successful SMS services are appreciated by the recipients because they are relevant. Therefore, the development of new SMS services should always emanate from customer needs and expectations. The possibilities of using SMS in customer dialogues are many and what is relevant in terms of applications and information differ from one customer segment to another. This also con- 8 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

11 cerns the number of texts deemed as reasonable and the times of day that are most effective. A promotion with a good offer texted to a stressed parent first thing in the morning risks being quickly forgotten. A reminder texted at 3am is not particularly popular either, regardless of content and relevance. The total experience is not only affected by that which is texted from customer service or the marketing department, but also by the overall communication from the company. Communication with the target audience requires consensus between the various departments. 2. Business development and technical implementation go hand in hand Close cooperation between the company's business side and its IT side is a crucial success factor in getting maximum benefit from the use of SMS as a communication channel. While demands for internal efficiency measures mostly originate from the IT side, the majority of ideas for new services and a closer customer dialogue stem from the company's sales, marketing and customer service side. For an SMS service to create added value in the business processes, a good close dialogue is needed between the business and/or customer service side and those who run the IT system who have the expertise to implement the new services. Successful organizations do not regard business development and IT as two separate entities but as two complementary parts in the business development. Close cooperation not only provides commercial clients with a better insight into what the new technologies offer, it is also a prerequisite for IT to understand the business opportunities that are behind the new demands and expectations placed on the organization. 3. Business is local but not necessarily the technology Insurance companies that operate in the international arena know that business conditions differ from country to country. Offers and business models therefore need to be adapted to the different markets. Successful implementations take advantage of the synergies generated by an integrated approach to technology and plat- 9 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

12 form development. At the same time they provide space to tailor service development based on different geographic markets or customer segment needs. This in turn puts demands on the technical platform and collaborations needed to implement the services. The key is in finding a solution that facilitates integration on a broad front towards several different vertical applications as well as market support systems. --- Insurance companies that address all three factors, e.g., focusing on putting the recipient at the heart of things, building bridges between the business side and IT side while managing to balance the local market variations with central synergies in an effective way have the best chance of succeeding in their SMS initiatives. 10 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESS

13 Lekab the insurance industry's SMS supplier We are an established supplier of business-critical SMS services to the leading Nordic insurance companies. We have operated on the Swedish market for 20 years and still have close business ties with many of our first customers in the banking and finance sector. Today we help almost all leading banks and insurance companies in Sweden to address their business challenges and develop new business opportunities by using SMS. Our broad SMS platform can be integrated with most business systems and processes, thus making it possible to bring together many different applications and generate new synergies. We provide customized solutions throughout the chain to meet each company's need for simple and smooth communication, from business planning, specification and integration to operation and continuous follow up. Read more at: Sweden LEKAB Communication Systems Dalagatan Stockholm Tel: Fax: Finland LEKAB Communication Systems Teknobulevardi Vantaa info@lekab.com Tel: Fax: