Online Capabilities of UAE Insurance Carriers: The Road to Customer Satisfaction

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1 Cognizant Insights Online Capabilities of UAE Insurance Carriers: The Road to Customer Satisfaction Given increased competitive pressures and significant operational challenges, highly functional and intuitive enterprise portals have emerged as a clear differentiator for insurers bent on seizing the high ground in this fast-growing but quickly maturing market. Executive Summary Over the past few years, the UAE insurance market has undergone significant changes marked by consolidation, demutualization and a strong trend toward specialization. It is expected to grow significantly, given the relatively low insurance penetration levels, growing population, rising GDP and infrastructure development. The sector is expected to grow at a CAGR of 19%, reaching US$18. billion 1 by Insurance premiums are also likely to grow at a CAGR of 20% over the next four years to reach US$7 billion, with the general insurance segment contributing 86% of the total premium. This fast-changing environment demands best and innovative practices in all aspects of insurance company operations such as product development, information systems, distribution strategies and client services. With a booming population, increased competition and a larger market to tap, distribution strategy planning has taken precedence over other focus areas. Given the large young population and an Internet usage that points directionally upwards, distribution strategists have started to emphasize online distribution to capitalise on growing opportunities. However, their online distribution strategies are currently suffering from IT challenges such as: Absence of a coherent channel strategy. Absence of key features of utmost importance to the end user. Absence of business-it harmony. Silo implementations. Portal proliferation arising from mergers and acquisitions. The importance of online distribution and the issues faced currently have pressured insurers to create an enterprise portal strategy. We have studied the online portals of a select list of UAE insurers to understand their effectiveness and future readiness. This white paper explores our findings and delves into growing online capabilities of 10 insurers operating in the UAE region. It provides insights on the overall regional IT landscape within the insurance industry, analyzes and identifies the key differentiating capabilities, and presents a picture of the online maturity level of these players. cognizant insights april 2012

2 The companies that scored high relative to their peers in their online capabilities were still found to lag behind what we posit as an ideal state, based on our research and engagement experience. The Big Picture: UAE Insurance Carriers Online Capabilities Budget constraints and a conservative approach to information technology have meant that the UAE insurance industry has until now adopted a passive approach to IT investment. Similar results were also found in our assessment, where we analyzed the online capabilities of a sample of 10 UAE insurers and scored them based on certain parameters. (The assessment methodology is detailed in the final section.) The companies that scored high relative to their peers in their online capabilities were still found to lag behind what we posit as an ideal state, based on our research and engagement experience. And, amid ongoing structural and regulatory reforms, the need to tap the growing market as well as the pressure to remain competitive are all the more reason compelling insurers to improve their existing customer portals. While a majority of the global insurers that were reviewed had strong regional customer portals, a few had portals that were effective only for their U.S. or global businesses, and their UAE country-specific portals were functionally lean. Being significantly different from the U.S. or UK in its economic development and insurance market penetration, the region (as previously discussed) has different growth drivers and hence demands a specific focus. With the increase in growth opportunities in-country, global insurers should concentrate more on enhancing their customer portals in the UAE to provide specific information on their regional products (e.g., their focus on Islamic insurance products). Our research shows that some of the regional insurers in UAE have used their portals merely to present information and have not used them as strategic tools to increase sales. With an increasing awareness of insurance needs among the population, personal insurance is expected to be on the rise in the UAE and the insurance carriers should look to their online medium to tap this market. Research Revelations: The Road to Customer Satisfaction We have analyzed the online capabilities of the UAE insurers under the following sublevels. Prospecting Tools With the advent of Internet-savvy customers, UAE insurers need to move to the next online level, from only providing basic product information to delivering quote generation and quote retrieval capabilities. Of the insurers analyzed, 80% provided either quote generation or quote retrieval; only a few offered both. Insurers have improved customer satisfaction by providing well-organized enquiry facilities either through online forms or by providing contact Assessing UAE Insurer Online Capabilities Ideal Regional Insurer 5 Regional Insurer 4 Regional Insurer Regional Insurer 2 Regional Insurer 1 Global Insurer 5 Global Insurer 4 Global Insurer Global Insurer 2 Global Insurer Company Information Prospecting Tools Policy Holder Self Service Customer Portfolio Information Claims Customer Support Source: Cognizant Business Consulting Figure 1 cognizant insights 2

3 information. The process was simplified for customers at four of the 10 insurers reviewed by providing a call-back option either through SMS or . Policyholders Self Service Our research indicates that regional carriers provide only a moderate amount of self-service capabilities to customers. Unlike local carriers, global insurers have been able to capitalise on their portal experience in providing richer features in their regional portals. The majority of the insurers we surveyed have implemented online options for policy transactions, such as the conversion of quotes into policies and policy endorsements, but not many of them have implemented renewal and cancellation transactions. About 10% of the insurers analyzed differentiated themselves from the rest by providing additional and unique facilities like provision for making nonfinancial endorsements. Roughly 50% of the insurers we reviewed enabled their customers to make online transactions through secure gateways and electronic fund transfer. However, these insurers have not provided the option to generate receipts. Customers are moving towards a paperless working mode and value the option to generate online bills and receipts. We were surprised to observe that 50% of insurers studied did not provide independent logins for their customers to view, track and print their policy information. Customer Support Though most of the insurers assessed posted their customer care phone numbers on their portal, only a few went further by providing specific complaint handling options such as an online complaint form and exclusive complaint handling contact numbers. Millennial customers look for more online options than the mere provision of real-world contact numbers. For example, research suggests this demographic is better satisfied if they can get quotes, locate agents and buy policies online. To keep customers informed about the company and the market, most insurers reviewed had either published an insurance glossary or an FAQ section. This enables customers to make more informed decisions with regard to the company s offerings. However, to help motivate customers to transact, these insurers need to improve on this capability, possibly by giving the customers a firsthand look at what their premiums would be by simulating scenarios of losses or indemnities over a period of time. Regular updates on the company product offerings could also be given through mobile apps. Claims Online capabilities on the claims front, such as online claims notifications and claim status tracking, were not provided by most of the insurers analyzed. Global insurers fared better than the regional ones in our assessment in terms of their claims-related online capabilities given their ability to leverage their expertise from other regions. Claim notification could be made online through , a call-back feature, forms or by providing regional contact numbers in the portal. Roughly 20% of the insurers we studied provided all modes, while another 20% supported only one channel. A few of the insurers differentiated themselves from the pack by providing specific facilities. For example, one insurer had a live chat facility, and a few of them (10%) had information about third-party services like facilities, garages and hospitals. In the future, these online capabilities will help the carriers to stand out from the rest. Claim tracking was provided by only 0% of the insurers that we studied, and then only at the final stage. Only three insurers posted contact information of the claims service providers on the portals. Ideally, insurers would enable customers to assess the status of any claim at each level, interact with the staff currently managing the claim and check the schedule of forthcoming activities. Customer Portfolio Information Most insurers scored below par in this category in our study. The majority merely provide static product information. Separate logins for each customer, providing them with the option to view and track their portfolios, were provided by 40% of the insurers, particularly those that notched higher scores than the rest in this capability. Providing self-service options along with separate logins will enhance customer experience; this is an area that insurers should target. Unlike local carriers, global insurers have been able to capitalise on their portal experience in providing richer features in their regional portals. cognizant insights

4 Insurers portals will continue to coexist with their agent distribution channels. This channel can also be enhanced using the online medium, wherein agent management and training can be handled through portals. Independent login for agents would give them better access to data, better selfservice options and the opportunity to view key reports without being constrained by business hours and dependency on people for data. Not many UAE insurers have embraced this as a key tenet of their strategic push to improve sales, however; this should be a clear future focus area Company Information Company information is not a major differentiator according to our study, but increased transparency regarding company particulars would enhance value perception in the minds of customers. Some insurers have elevated mind-share and credibility by detailing additional information such as countries served, country-specific offerings and their anti-fraud and anti-laundering policies. From New Business to Claims: Where Are the Insurers? Figure 2 illustrates the online capability framework we developed along different functional areas across the insurance value chain. The table indicates how many insurers provide capabilities within each category and with what level of maturity. This can be used by carriers to identify the areas to concentrate on in the future. Capability Framework: Insurers Presence Figure 2 Online Capabilities Capability Benchmark Capability Measuring Criteria Description of Capability Low Moderate Good Countries Serviced Does the company have online capabilities for all the countries that it serves Company Information Does the company have online capabilities for all the countries that it serves NA NA NA Contact Options Website feedback Website feedback Company profile (About us, history, etc.) Company profile (About us, history, etc.) Branch information Branch information Other Information Compliance and ethics guide Compliance and ethics guide News/press corner News/press corner Online product information and quote Contact options for information Product information information on all nononline products (i.e. except Motor, Health, Travel, Home, Critical Illness Insurance, etc.) Prospecting Tools Product features/benefits Online quote Option for online quote generation Premium/annuity calculators Premium/annuity calculators Online enquiry for both online and other products Online enquiry Contact us details for queries and service requests Contact us details Call back request functionality Call back Policy Holder Self-Service (New Business and Subsequent Transactions) Policy Transactions Online policy issuance Customer should be able to convert a quote to a policy online Endorsements processing (non-financial) Online renewal Customer is able to change address, premium frequency, nominee addition, etc. Customer should be able to renew his/her policy online Financial Transactions Online premium payment or EFT Provision to pay premium online or an option for EFT Personal Profile Management Premium receipts generation Provision to generate receipts for the premium paid SNAPSHOT Change/edit personal information Personal information including password cognizant insights 4

5 Methodology A sample of 10 insurers operating in the UAE region was selected and analyzed on their online capabilities. The analysis was performed via a three-step methodology. Research The research on the online portals of the carriers was conducted by analyzing their portals. The research was carried out on a few broad categories, namely company information, prospecting tools, policy holder self-service, customer portfolio information, claims and customer support. Each of these broad categories was broken into subcategories or features on which the online portals were evaluated. Score A score was provided on each of the capabilities based on benchmarks. An overall normalized score was also obtained for each of the insurers and cross-compared to determine the relative performance on these capabilities. Each of the insurer s scores was also pitted against an ideal insurance company capability score. This ideal score was built hypothetically, based on our experience with similar portals. Analyze From the assessment data, key differentiators were identified, which helped some insurers to score better than others. Also, a generic view was obtained from the data on the number of insurers that have implemented capabilities at each level of our framework. Footnote 1 Based on data from The World Bank, Internet usage has increased by 67.4% in the past 5 years. About the Authors Ramanujam Venkatesan is a Consulting Manager with Cognizant Business Consulting s Insurance Group. He specializes in consulting for general insurance clients and has been engaged with multiple carriers across North America, Europe and Asia Pacific. Ramanujam holds a post-graduate degree in management from the Indian Institute of Management (IIM) Indore and has a bachelor s degree in engineering from the University of Madras. He also holds certifications from the American Institute for Chartered Property and Casualty Underwriters (AICPU). He can be reached at Ramanujam.Venkatesan@ cognizant.com. Vinodh Stanley Stephen is a Business Analyst with Cognizant Business Consulting with a specific focus on the insurance industry. Vinodh has extensively researched strategies for insurance carriers in developing markets. Vinodh has a master s degree in management from the Institute for Financial Management and Research (IFMR) and a bachelor s degree in engineering from Anna University. He also holds certifications from AICPU and CII. He can be reached at [email protected]. cognizant insights 5

6 About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process outsourcing services, dedicated to helping the world s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 50 delivery centers worldwide and approximately 17,700 employees as of December 1, 2011, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at or follow us on Twitter: Cognizant. World Headquarters 500 Frank W. Burr Blvd. Teaneck, NJ USA Phone: Fax: Toll Free: [email protected] European Headquarters 1 Kingdom Street Paddington Central London W2 6BD Phone: +44 (0) Fax: +44 (0) [email protected] India Operations Headquarters #5/55, Old Mahabalipuram Road Okkiyam Pettai, Thoraipakkam Chennai, India Phone: +91 (0) Fax: +91 (0) [email protected] Copyright 2012, Cognizant. All rights reserved. No part of this document may be reproduced, stored in a retrieval system, transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the express written permission from Cognizant. The information contained herein is subject to change without notice. All other trademarks mentioned herein are the property of their respective owners.