Self-service transaction and digital payment utilization rates vary significantly across the insurance industry by line of business and persona.
Novarica recently surveyed our Research Council on self-service utilization rates for agents and policyholders across seven lines of business. Our findings are consistent with an industry where increasing expectations for digital experience are driving insurer investments. Those new digital capabilities, in turn, are influencing how people interact with their insurers.
Agents predominantly use self-service in highly digitized and commoditized lines, where low premium values incentivize speed to maintain profitability. Customers in these lines are also more likely to want to do their own servicing, as they do with bank accounts and financial products.
Agents don’t use self-service as often in commercial and specialty lines, where white-glove client service can be an important differentiator, especially for the largest accounts. These are also lines where insurers have invested less in digitization and focused on connectivity rather than account servicing features.
Policyholders most often use self-service in lines like individual life and personal lines, where direct sales are more common and digital experiences are more robust. Demographics can influence utilization rates: Annuities, despite its focus on individuals, has a more modest policyholder self-service rate due to customer comfort and advisor distribution models.
Policyholder self-service is uncommon in most commercial and specialty lines, but that’s beginning to change in small commercial and workers’ compensation. Insurers have begun to target these lines with direct sales efforts; digital policyholder experiences need to support these efforts in turn.
Digital premium payments are the norm for personal lines and widespread in individual life. They have lower utilization levels in commercial and specialty lines, where brokers and agents may remit payments on behalf of their insureds. Utilization is likely to increase in commercial and specialty, especially as more of these lines are sold directly.
To the extent to which they’re not yet universal, digital premium payments represent an opportunity for insurers to differentiate from their competitors in terms of responsiveness and convenience.
The future of self-service
Right now, not all transactions are enabled; some policyholders and agents might not use them even if they were. However, the trend of increasing digitization and 24/7 availability in insurance is clear. Not all transactions need to be enabled for self-service right away, but consumer and distributor expectations will continue to grow.
For more on this topic, see Novarica’s recent Research Council study, Self-Service and Digital Payment Rates in Insurance.
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