How can insurers and technology companies improve the customer experience?

What inspired HONK to work with insurers to provide customer-centric roadside assistance solutions?

Our company was born out of a bad experience with roadside assistance. Our CEO and founder’s fiancée had broken down on a major highway and had to make multiple calls over a long period of time to get assistance. This made us dig deeply into the roadside industry to understand why inefficiencies exist and how technology could enable customers to get faster help digitally without having to request help via a phone call. We quickly garnered interest from insurance carriers who knew their customers were having these same problems. Insurers collect the premium for the roadside policy but typically send customer calls to their vendor to fulfil the service. However, when the customer has a horrible experience, it reflects badly on the insurer. Roadside assistance is often the most common claim for those insurers, so it is an important customer touchpoint to prove their value and gain trust. 

Your CTO recently wrote: “Insurtechs bring new technologies to solve age-old problems and provide powerful solutions.” Why do “age-old” problems still exist in a digitalised commercial world?

If you look at fintech, adtech or other technology industries, they pounced on technology to create new ways for customers to engage with them. However, the fiduciary characteristics of the insurance industry mean that carriers are risk averse, which makes them reluctant to introduce new technologies unless these are proven effective and safe. Insurtechs are pushing the boundaries of what’s possible, with new technologies that can provide a wide range of benefits – substantially improving the customer experience, increasing efficiency, reducing claims leakage and much more – in this new, digital-first world. If they implement the right insurtech solutions, insurers can gain significant competitive advantages.

How do insurers measure the technology benefits from insurtechs?

Loss ratios have long been a key barometer for carriers, and insurtechs that have been fast to adopt technology and enter the public market have reported ratios that are below traditional industry expectations. With shareholders still viewing loss ratios as a key indicator of a successful carrier, under-par ratios can lead to a loss of investor confidence. Traditional carriers are learning from insurtechs and waiting until a new solution is proven to be successful in the market before moving to implement it in their own organisations.

Why is it important for insurers to digitalise their customer interactions?

The customer demand for digital experiences is increasing exponentially. If you don’t offer digital solutions, you’re going to be left behind. In response, insurers are now prioritising digitalising the customer experience, often ahead of the behind-the-scenes underwriting and claims processes. HONK has seen a 200-300% increase in customer self-service solutions usage across carrier clients in the past 24 months.

What do technology companies bring to a relationship with insurers?

Insurance companies can minimise the risk of innovation by collaborating closely with insurtechs. Technology companies can generate new ideas and implement faster than an insurance carrier. Testing numerous concepts and learning that some will fail is part of the process for developing innovative solutions, but failure is often a luxury that carriers can’t afford. Instead, carriers can work with technology companies and only implement ideas that have shown market success. That’s what happened with HONK’s journey. Carriers knew their customers were having bad experiences and sought out a technology that already achieved product market fit for the solution.

What do insurtechs need from insurers?

The relationship is evolving. Insurance carriers are learning about the rules of engagement with technology companies and are open to try out new solutions. But once they identify a technology solution they believe is a great fit, internal processes can be very extensive, requiring comprehensive security and financial reviews before a technical team gets involved to determine how − or even whether − the solutions can integrate with their systems. What technology companies need from insurers is a working relationship that enables both partners to test and learn. 

What could technology companies do better?

Insurance is a highly regulated industry. Technology companies need to learn how to operate within the compliance framework and be aware of these constraints, so that this doesn’t block the value they are promising.

What factors will strengthen the relationship?

Relationship building is vital. With our insurance carrier partners we have learned that once they trust your solutions, you can implement a collaborative approach delivering value far beyond an initial engagement. As an example, carriers have evolved the HONK relationship from standard roadside assistance to leveraging on-scene image technology to eliminate significant time and cost from the vehicle collision claims process. This shows that partnership can be fruitful for both sides.