The Digital Transformation of Insurance
ID federation and customer retention
February 05, 2013
Managing customer retention in the digital age is a critical component to growth and profitability
I recently had a chance to participate in round-table sessions held by the Independent Insurance Agents & Brokers of America’s Agents Council for Technology (ACT) and the ACORD User Group Information Exchange (AUGIE), where we discussed pressing issues for agencies that hinder business the most.
Following the discussion sessions, ACT and AUGIE agreed to work together to advance four initiatives in 2013:I recently had a chance to participate in round-table sessions held by the Independent Insurance Agents & Brokers of America’s Agents Council for Technology (ACT) and the ACORD User Group Information Exchange (AUGIE), where we discussed pressing issues for agencies that hinder business the most.
- ID federation
- Real-time downloads
- Client self-service capabilities
It’s no secret that managing customer retention in the digital age is a critical component to insurance growth and profitability. Insurance agencies and carriers have to make the customer experience richer and more efficient, which ACT and AUGIE are committed to addressing this through these key initiatives.
Taking Friction Out of Customer Payments
The particular discussion group I was part of talked about how difficult it can be assisting customers when they’re trying to pay their bills. When carriers bill customers directly, customers often turn to the agency for help with payments. It sounds like a relatively routine process, but often it’s not, and it can cause customer headaches.
Real-time interface technologies have allowed agencies to quickly access customer billing records from carriers. But accepting or making a payment can be another matter entirely. Agencies will often accept payment from the customer and then direct carriers to do a cash sweep against the agency’s account. This can sometimes be a cumbersome process and costly for the agency. Finding an easier way for insureds to pay online would be a convenience many would appreciate and an opportunity for agencies to build stronger relationships to improve customer retention.
Looking to ID Federation
Offering convenient online payment options is possible and can more quickly become so through standards maintained by ID Federation Inc., a non-profit group that is creating a single sign-on framework for the insurance industry. Today, agencies are required to maintain separate IDs and passwords for each of their employees – for every software application and website they use. This challenge is further compounded because insurance customers need IDs and passwords too.
ID Federation Inc. is developing legal and technical standards that ensure a secure and consistent authentication between software products and business entities, effectively eliminating the need to maintain dozens of separate IDs and passwords. This will make doing business smoother by reducing the time and cost it takes for businesses and individuals to manage logins and passwords. If an agency’s customer logs into the agency’s website, the identity of that customer can be “federated” securely to any insurance company and grant direct access to policies, claims and billing information, and allow the customer to make payments.
Why this Matters
Easier online payment capabilities are just one customer service advantage ID federation can bring to agents and the insurance industry. This is an important industry priority that will encourage agencies and carriers to expand their use real-time data exchange by eliminating obstacles and the costs of authenticating individuals’ permission to access data. Providing customers with easy, fast and complete service at all touch points is what will make insurance agents and their carrier partners most successful.
How do you see these initiatives helping your business? Tell us in the comment section below and use the social buttons below to “share” this important industry initiative with your peers.