INS CX-Innovation Insight 9-21 WEB

September 2021
www.bdo.com/insurance
INSIGHTS FROM THE BDO INSURANCE PRACTICE
INNOVATION IN
CUSTOMER EXPERIENCE:
OPPORTUNITIES FOR
THE INSURANCE
INDUSTRY
by Bridget Johnson
2 INSIGHTS FROM THE BDO INSURANCE PRACTICE
The pandemic has

been a wake‑up call
to the insurance
sector. Historically
an industry reluctant
to digitize, insurers
have been forced to
adopt a digital-first
strategy in order to
stay competitive amid
the disruptions caused
by COVID-19.
At the forefront of this digital

awakening is customer experience
(CX). BDO Digital’s 2021 Middle
Market Digital Transformation Survey
found that improving CX was the most
commonly cited digital priority this
year, ahead of other endeavors such as
upgrading legacy IT and implementing
change management.
But why CX? In 2021, consumers

want seamless, personalized services
that are tailored to their needs—and
they’re choosing their insurance
carriers with these expectations in
mind. Onboarding and engaging with
customers via telephone and mail are
no longer the norm in modern society.
Instead, customers expect online policy
shopping, on-demand customer service
and speedy claim payouts.
Technological innovation is key to

meeting these demands. This article
explores opportunities for insurers
to harness data and technology to
boost their CX.
INSIGHTS FROM THE BDO INSURANCE PRACTICE 3
PROCESS MINING TO SIMPLIFY COLLABORATE WITH INSUREDS TO

CUSTOMER JOURNEYS MANAGE RISK
CX is more than having a sleek user interface. Both the insured and the insurer want to avoid
Investment in back-end processes has a direct losses. Nonetheless, until recently, insurers
impact on customer satisfaction, particularly have not taken advantage of the opportunity to
for incumbent insurers who are competing with collaborate with their policyholders to manage
insurtech entrants boasting advanced features like the ability risk. The growing volume of data available through technology,
to pay claims in a matter of minutes. such as Internet of Things (IoT) devices, is changing the game
of loss prevention by highlighting risky behavior and conditions
Process mining is a powerful tool that helps optimize the before losses occur.
claims workflow by unlocking insights into inefficiencies
and bottlenecks. Insurers can use these insights to overhaul, The obvious example of risk management in the insurance
automate and standardize back-end elements of the claims context is in-car telematic devices to monitor driving habits.
lifecycle, leading to faster claim settlements and more But there are many more possibilities, such as in-home sensors
straight-through claims processing. for early leak detection, smart toothbrushes that monitor
dental health or personalized health recommendations based
It works by leveraging raw claims management data to build on data from wearable devices. As connected devices continue
powerful visualizations that illuminate the claims workflow on to become more ubiquitous, so will the opportunities for
different dimensions, such as the cost, aging or redundancy insurers to leverage them to prevent claims.
of process steps. For example, an insurer could use process
mining to learn that collecting loss information from their These risk mitigation practices have a seismic impact on CX.
policyholders is the lengthiest step in their claims process. For most consumers, insurance is a grudge purchase, ridden
Armed with this knowledge, the insurer could explore with distrust due to a belief that carriers don’t have their
expedited methods to capture this information, like using customers’ best interest at heart. If executed in a manner
speech to text integration to populate forms during customer that is transparent and value-adding for the policyholder,
calls. Eliminating bottlenecks like this reduces average claim claim prevention can help shift the model of insurance from
durations and simplifies the customer journey, resulting in antagonistic to mutually beneficial. Particularly at a time
happier customers. when losses are becoming less frequent in certain lines
due to advancements in technology (think driverless cars),
Process mining is particularly beneficial for those insurers in insurers must explore ways to remain relevant in the eyes of
the early stages of digital transformation, as it helps to focus their customers.
their initial efforts on the operational pain points that will lead
to the biggest differences for their customers.
See process mining in action with ABBYY Timeline

4 INSIGHTS FROM THE BDO INSURANCE PRACTICE
A STREAMLINED, PERSONALIZED APPROACH Large insurers and insurtech providers were early adopters
TO UNDERWRITING of this technology, but organizations in the middle market
are starting to realize the benefits of investing in this tool.
Insurance often gets a bad rap for its high- Companies are deploying this technology to meet business
touch and drawn-out underwriting practices. goals, such as improving service offerings, identifying cross-
In today’s market, insureds are gravitating selling opportunities and tracking the success of a new
toward carriers who can render instantaneous product launch based on customers’ emotions. Customer
and highly personalized underwriting decisions. In order sentiment analysis also provides useful sales and marketing
to keep pace, insurers must leverage forward-thinking data outside of the direct interactions insurance companies
technological solutions. have with their customers, which typically occur infrequently,
One such solution is automation. Underwriters have such as during a claims event. Analyzing customer
traditionally had to sift through large volumes of structured sentiment is another step forward in insurers’ broader digital
and unstructured data to extract relevant information, assign transformation efforts—a robust data governance framework
risk scores and quote policies. Automation can streamline the enables them to standardize the collection and management
process by quickly lifting, interpreting and synthesizing the of disparate data sources into a “single source of truth” for
data, providing underwriters with the information they need in better decision‑making.
a format that’s easy to ingest. The way that the insurance industry interacts with its
Many insurers are going a step further and reimagining customers has been remarkably unchanged for decades, but
the underwriting process entirely. Instead of taking a one- times are changing, and the practices that have made insurers
size-fits-all approach to pricing policies based on statistical successful up to now will not be what propels them forward.
averages from historical data, these carriers are employing It is clear that the digital-first, customer-centric model is now
artificial intelligence (AI) to make future-thinking underwriting the industry standard, and the insurtech propagators of this
decisions customized to the individual policyholder. The AI trend are only rising in prominence, with their funding at an
approach to underwriting weaves together data from disparate all-time high. Now is the time for incumbent insurers to take
sources—like self-reported data, third-party databases, a page out of their playbook and invest in CX.
geospatial data and even information from wearable or smart
home devices—to form personalized risk profiles and price
policies accordingly. The result is not only faster underwriting To elevate your CX strategy through digital transformation,
decisions due to less reliance on manual underwriting please contact Bridget Johnson, senior associate in BDO’s
processes, but also sophisticated pricing that is accurate and Data Analytics practice. She can be reached at
customer-specific. [email protected].
CUSTOMER SENTIMENT ANALYSIS DRAWS

MEANINGFUL CONCLUSIONS FROM
DISPARATE SOURCES
From social media posts to conversations with call
center agents, there is a plethora of sources from
which insurers can pull useful information to build
customer insights and respond appropriately.
Taken together, data from these seemingly unrelated channels
can help them learn how customers feel about their brand, the
claims process or other issues. While efforts to define insureds’
experiences might sound subjective and inexact, customer
sentiment analysis uses natural language processing and other
advanced machine learning techniques to assign a positive,
negative or neutral rating to customers and prospects alike.
INSIGHTS FROM THE BDO INSURANCE PRACTICE 5
People who know Insurance, know BDO.

www.bdo.com/insurance
CONTACT:
PETER POPO
National Insurance Practice Leader
404-979-7258
[email protected]
IMRAN MAKDA
National Insurance Practice Leader
212-885-8461
[email protected]
BRIDGET JOHNSON
Senior Associate, Data Analytics
202-644-5417
[email protected]
ABOUT BDO
BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, and advisory services to a wide range of publicly traded and
privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The
firm serves clients through more than 70 offices and over 750 independent alliance firm locations nationwide. As an independent Member Firm of BDO International
Limited, BDO serves multi-national clients through a global network of more than 91,000 people working out of more than 1,650 offices across 167 countries
and territories.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the
international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information
please visit: www.bdo.com.
Material discussed in this publication is meant to provide general information and should not be acted on without professional advice tailored to your needs.
© 2021 BDO USA, LLP. All rights reserved.

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September 2021

INSIGHTS FROM THE BDO INSURANCE PRACTICE

The pandemic has

At the forefront of this digital

But why CX? In 2021, consumers

Technological innovation is key to

PROCESS MINING TO SIMPLIFY COLLABORATE WITH INSUREDS TO

See process mining in action with ABBYY Timeline

CUSTOMER SENTIMENT ANALYSIS DRAWS

People who know Insurance, know BDO.

© 2021 BDO USA, LLP. All rights reserved.

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