Is consumer education needed in the digital insurance age?

Over the past decade we have seen technology inch into every sector - including insurance. As consumers have embraced digital methods of engagement, buying, working and living the insurance sector has followed suit, leveraging digital tools and systems to improve work processes as well as products and services. While this has had many benefits it has also created an environment in which there is rarely an insurance advisor on hand to explain products and services to consumers. Is this creating a gap in understanding and awareness that requires consumer education to fill?

An comprehension gap exists

One 2020 survey into the insurance industry found a considerable lack of insight and understanding where insurance is concerned. For example, only 1 in 10 consumers know that 90% of claims are successful across the insurance sector and up to 59% think that they have an average chance of getting into an accident while only 8% think this is higher than average. There is a clear misunderstanding of risk on top of a lack of comprehension of what insurance products and services can offer. Consumers also show little understanding of the industry standards and accreditation that a reputable insurer should be able to demonstrate.

Approaching the need for consumer education

Leveraging the digital ecosystem is something that insurers now need to do. There are a wealth of tech-driven tools out there that enable insurers to connect with consumers at the point in their lives when risks are happening or likely to happen. Segmenting and personalising experiences provides an opportunity to make insurance relevant to the individual and provide services that are tailored to individual needs. Where education is required it can be made directly relevant to individual consumers and the products and services that they are most likely to benefit from. There are also many opportunities for broader digital education initiatives - many insurers have been engaging in this via the use of blogs and social media platforms, such as Twitter.

Adapting the sales and service experience

Awareness and education can be integrated into the sales and service experience by using digital tools and products that then open the door to another level of options. This could, for example, include tiered products which begin with a basic offering that allows the consumer to try out the product and then strategically build awareness and education, taking consumers up to more involved and higher priced options as they begin to appreciate the benefits of what is on offer. It’s essential, of course, to ensure that any new approach to sales and service experience is compliant with regulation and legislation.

Meeting consumers where they are most likely to engage

Consumers today are incredibly digital-savvy. Around half are already comfortable with smart technologies in the home and 43% are comfortable with the use of AI by insurers when it comes to servicing policies. It’s essential for insurers to leverage this and use the channels available to meet consumers where they’re at, not just in terms of selling products but providing more information and awareness of the benefits of insurance services too.

Consumer education is essential today to help insurers communicate the full value of what the sector can offer.

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About Us

Mandon Software is a UK-based company founded in 1999. We work with customers in a wide range of insurance lines, from marine to healthcare. We are experienced in working in the Lloyd's market and pride ourselves on delivering excellent customer services at all times.