CX Files Podcast: Customer Experience in Insurance

Posted on 14th October 2021

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CX Files Podcast: Customer Experience in Insurance

Posted on 14th October 2021

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Greg Murphy, EVP for North America at INSTANDA, recently appeared on the CX Files Podcast with Mark Hillary. Listen to the podcast below, or read through the transcript, exploring how the customer experience is important to the overall insurance journey.


Hello and welcome to the CX Files podcast. I'm your host, Mark Hillary. This week we're going to be focusing on insurance with our guest, Greg Murphy from INSTANDA. Greg is the executive vice president for North America and he's based in Minnesota.

INSTANDA is a cloud-based insurance platform that helps insurance companies to quickly launch new products. It's basically a complete policy administration system that's in the cloud using a SaaS model. So, it helps insurance companies to be faster and more innovative.

In our conversation, I talked to Greg about how insurance is changing and how it can get closer to customers when most of the time we don't ever want to deal with our insurance company anyway. OK, let's go straight to the interview with Greg Murphy.

Mark: Greg, thanks for coming and appearing on the podcast. It's great to have you here. Now let's kick off by introducing INSTANDA. Now, you're not an insurance company, but you've got a platform that allows insurance companies to quickly design and roll out new products.

So, how would you summarize and introduce the business?

Greg: Well, INSTANDA is just that. I think you did a great job of summarizing it, which is we are a platform that enables insurance companies to build really any type of insurance product and then do any type of underwriting and then automate the distribution of that to several different outlets so we can be the entire platform for an insurance company, whether it's an existing insurance company or a startup that is decided to get into new markets. And that's what we do.

Mark: OK, and so let's say I'm an existing insurance company and I see a sort of a gap in the market, you know, let's say insuring drones for leisure use, for example. Can I just build a product for that specific area on your platform? And then would that integrate into my existing services then?

Greg: Yes. With the customers we typically deal with, they really fit one of two camps. Either they are an existing customer, meaning they are an existing insurance company. Or if they currently have a policy administration system or a distribution system that they're using to distribute other products, they will likely go through a process of trying to figure out if they can use that system to distribute products, whatever product they want to put up. Oftentimes, though, they figure out that it's going to take way too long and cost too much to use a legacy technology to distribute a new product. So that's when they come to us.

And so we can do one of two things: We can either distribute that new product very quickly, usually within about six to 12 weeks into the market. And we can integrate with our old systems. Or we can handle that entire new product itself in total. And we often have customers do is they start using INSTANDA for one product because it's a new concept. And once they experience the power of INSTANDA distributing product, they decide to take their own products and move them on to stamp.

Mark: OK, yeah. Yeah. So you can actually end up improving their backhand as well. Yeah. OK, clearly you're very close to the insurance companies and the wider industry. And this is an industry that's transforming very rapidly right now. I mean, I keep seeing case studies of companies like Lemonade that are using AI'I to make instant claim decisions. And, you know, so we're seeing tech becoming more and more important.

I mean, what are some of the changes or advances that you're seeing right now that that are looking exciting and that we should be expecting in the next year or so in insurance?

Greg: I see a number of things happening, so I well, first of all, say that the biggest thing that technology is doing for the insurance industry is it's just making it easier to purchase insurance and it's making the product manufacturing process easier to subdivide products and making niche products so that they're less complicated. So that's really the main thing that's happening.

The other thing that we're seeing is just this emergence of different data sets that are out there to really help in the underwriting process. To give you an example. There's a lot of drone footage out there, there's a lot of pictures that could taken every day. And that data is stored and then turned into actionable types of data so that it can be used in the underwriting process.

So, if you're underwriting a farm, for example, that drone footage will immediately tell you that there are seven buildings on that farm site and those buildings are “X” size, given the height of the drone and the type of picture that it is.

So, all of that great data that's out there, all these different data sets, it's just making things more actionable, which really leads to two things. Number one, things can happen more quickly. And number two, you can accurate you can underwrite more accurately.

And at the end of the day, really, insurance is about the transfer of risk. And the clearer that you can understand what that risk is, the clearer that you can price that risk. The better experience you can give the end customer to really provide that insurance.

So those data sets really make a big deal. The third thing I would mention is that what we're really seeing is a lot of disruption in the market. So, we're seeing companies that are even really insurance companies get into the insurance market because they're associated with data.

For example, we have worked this year with a company that does home security systems, and that's their business. They've never even thought about insurance until one day they discovered, wow, we have a lot of data about every single home that we go into. And they installed a security system, so they made a decision to actually become a distributor insurance in the homeowner market because they already had all the data for the home. And so, again, it made it very easy to get into that market.

Those are the types of changes that we're seeing in the market and very technology driven, but really very close to the end customer and close to what I would call more niche markets.

Mark: Yeah, and it's interesting that the changes you're describing there, they kind of they do have a direct impact on the customer experience, because, I think that, you know, when I think about insurance, there's this kind of general problem. Often, you're forced to buy a policy. You know, you have to have an auto policy, or if you've got a mortgage on your home, then you're forced to buy an insurance policy to cover the value of the home.

So, you know, often you're doing a price comparison is either the insurance is mandatory or you're only selecting it on the price. And the only other interaction you have with the insurance company is when you're making a claim.

So you're probably distressed because you've just had a burglary or you've crashed your car. So how does the insurance industry in general like get closer to their customers in a more positive way? Because all these other interactions traditionally seem quite negative.

Greg: Yeah, it is. That's a great question, Mark. And I think when I when I think about that type of discussion, the first thing I would say is I don't think anyone in the insurance industry is under the illusion that that we can suddenly take insurance and make it a desire to buy insurance.

I mean, we're not a theme park, not Walt Disney, right? We’re the insurance industry. But I think what it really boils down to is two major things. One is making it easier to buy insurance and really easier to understand.

That's really what customers want at the end of the day, is that process of actually purchasing insurance and understanding what you've got when you purchase that insurance. There's a lot that our industry can do to make that process just easier.

And then the second thing I would say is, is really the time when you need the insurance company is when something bad happens. So really making sure that that whole process of the claim and really interacting with the insurance company when you need them is very customer focused.

Good insurance companies really realize that. And they're really investing in that at this point in time, not only with the human elements, just making sure that the process is feels good. Right? But there's just really great technology involved in there. So, you're not having to fax things in and do wet signatures and sign things back and forth and take a very long time to make claims happen. There's a lot that can be done to make that process very quick. So those are the two things that I would call out.

Mark: Yeah. And you talked about some of the technological changes and advances and innovations. And often when I read about analysts talking about insurtech and the wider kind of fintech environment, they are talking about startups or new brands competing with traditional players.

And I know that if you look at banking, for example, the companies that now score the highest on all of the kind of customer service, customer experience charts, they're all the challenges. There are new brands that have pushed the traditional ones aside.

So, you know, are we going to see this replicated in insurance or will there actually be more of a kind of collaboration between the old and the new and traditional brands using some of these technologies?

Greg: Yeah, that's an interesting question, because I would say the jury's out on this. You know, I think there's some well-worn examples in in other industries and really in other areas of the financial service industry on how disruption begins to happen. And I would agree with you that in the insurance industry, what we're seeing are these small insurtechs, they're beginning the disruption and they're able to do that because they really don't have the baggage of kind of older thinking and they don't have the baggage of dozens and dozens of systems that are out there to try and make things happen quickly. So, I think I think we'll continue to see disruption happen from insurer.

But I think there's this to go a couple of different ways. I think that some of these initial attacks could really turn into larger providers and hence really replace some of the current providers that are out there. But I also think that I see insurance companies really being very smart about this over at least the good insurance companies are really realizing what's out there. And I see them beginning to make investments to not only try and partner with insurtechs, but really to transform the way that that risk is transferred in the back end.

And I think the one the one thing that's different in the insurance industry is that. At the very back end of the process, insurance is really still pretty complicated. Right? So, it's just not anyone that can all of a sudden become an insurance company.

Insurance companies still really have the secret sauce that allows them to accurately underwrite and transfer risk. And so, I believe that sophistications still needs to exist in the marketplace. And I think the smart insurance companies will partner with insurtechs, they will it will become easier to deal with and they will really begin to serve the niche markets that are out there that are that are ripe for this kind of disruption.

So, I guess we'll have to see. But if I had to predict it, I would say that we're going to see a mixture of big insurance companies that we've all known really win, and then some brand-new names that we've never even heard of yet.

Mark: And yeah, I mean, are there any of the startups or the people within the insurtech universe addressing that point that you just made there about actuarial risk? You know, the actual calculation of risk itself that kind of sits in the back office is pretty complex still.

And that's the skill. You know, that's the skill that the companies with experience have got. I mean, has anybody been trying to automate and make that faster or better?

Greg: Yeah. So, the answer is yes. What's really interesting about insurer tech is when you think about the entire insurance value chain, there are there are insurtechs sprinkled all over that value chain. And a lot of times we see the ones that are very visible, the ones that really focus on distribution, because as the customer, we notice those. Right? But in the back end, there is a lot of insurer techs that are really focused on looking at making the underwriting process more accurate, using data. And really assembling data and making it usable so that in the claims process, it can become more accurate.

And the other thing I see is risk modeling. Just to give you a couple of examples, I've seen companies that have been doing really detailed risk modeling of things like fire danger on the coasts and in the US.

And it's fascinating the amount of data that's out there to be able to take that risk pool and really get it much more efficient. So you can really see where that fire line is actually going to go to and then change your underwriting process right up to that firewall. And that's all very data driven. So, I see insurer techs all over the value chain and a number of them focused on the back end as well.

Mark: OK. You were talking then also about some startups. You know, we may well see a universe where we have some traditional brands that we all know and then some new startups that we you know, right now, we've never heard of them in five years. They might be big players. But if I look on LinkedIn right now, I can see companies like Google that are hiring in insurance.

And, you know, Google insurance seems to be becoming a ramping up and becoming a big player itself. So are we going to see like a mix of startups? But I mean, the big tech players like Google, Amazon, for example, entering into this market as well.

Greg: Yeah, I think that we will. And I think it will take a slightly different form. And what I mean by that is what the big tech companies, like Google and Amazon, what they bring to the table is they bring distribution.

They bring a way to distribute products that's extremely efficient. They also bring data. So, when I spoke earlier about just making the insurance process easier for the end customer, I believe that the large tech companies will continue to make that process better, and better, and better.

And they will. I believe they will shape how insurance companies think about those products. And I believe they will force large insurance companies to be easier to deal with in the back end and actually manufacturing the products.

I don't see them becoming insurance companies, though. I don't. if I had to predict, I would say you're not going to see Google Insurance or Amazon insurance in terms of actually creating insurance, but I believe they'll be very active in distribution.

And the parallels that I would make are things like the travel industry, where all of a sudden, yes, big tech travel companies became the way that we do things now. And I think doing things online with insurance is exactly the way things will start to move in the future.

Same thing in the music industry. You know, record companies are there whether they play a very different role now than they did many years ago. And it's all about distribution. It's that how do you consume that end product, whether you're a business or customer? That's where Google and Amazon really have the upper hand.

Mark: Yeah. Well, even if their main role is in aggregation and distribution and then I guess it's definitely going to help the end customer. So, that's got to be good news.

So, what is coming next for INSTANDA then? I mean, just to wrap up, what are you looking at for the rest of the year? Any kind of trends or exciting news that you're sort of looking at?

Greg: Well, I would really highlight two things. The first thing is that today's INSTANDA has been very, very focused on the policy side of the world. So, the entire value chain around creating the product and then distributing it to the customer, it's all about making that purchase and that policy process easier. We've been very focused on that.

The announcement we will be making just within a few months here is that we will also be adding billing and claims to our platform. So, we will be a completely turnkey platform for any insurance company that needs that needs to a full-fledged platform. So, we're very, very excited about this.

The second thing I would point out is related to some of the things I mentioned earlier is we are continually partnering with companies that have deep amounts of data. And INSTANDA is extremely powerful when you combine it with the available data to do better and more automated underwriting.

And so, we'll be making some announcements over the next few months as well, that will be pretty large partnerships with big data companies to be able to do that, to do that more effectively for our customers.

If you are ready to transform the way your customers experience insurance, then let's chat!

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