Digitisation in the Insurance Industry - Opportunities for the Application Process

August 25, 2017| By Annika Schilling and Carsten Giese | L/H General Industry | English | Deutsch

Region: Germany

Digitisation has spread to every aspect of our personal and professional lives - including, of course, the insurance industry. It affects all sorts of different areas: from interfaces with end-customers and brokers, to wearables like fitness trackers that are supposed to encourage customers to behave in a more self-aware way.

It is already possible to complete almost all of our day-to-day dealings online: banking, postal services, supermarket shopping - and even dating. The experience gathered in these fields also shapes people’s expectations when they take out an insurance policy.

Sophisticated technical mechanisms are available to attract interested parties to a website, but that is not even half the battle. Insurers need to keep their potential customer on the website until they have successfully completed an application. Ideally, the customer should enjoy using the site so much and find such attractive opportunities for interaction there that they are happy to visit it time and time again in the future.

A successful website boasts an attractive design, does not contain too much text, is intuitive to use and can be navigated through quickly - none of which are characteristics associated with the traditional life insurance application process. Simply transferring the old processes online does not give customers what they want and need.

At this point, the industry is confronted with a situation that it has never faced before: previously, brokers would help the applicant to complete the form and answer any questions or contact the insurer if clarification was needed, but now they have no means to exert influence directly. The applicant is often sitting alone in front of a computer screen, and without the broker's support there is much less of an emotional hurdle to stop the applicant from aborting the process. On top of this, competitors’ offerings are just a click away. Comparison websites also play a role in convincing applicants that the first policy they find is not necessarily the best one.

Application Process

Picture a traditional paper application form for a life insurance policy and you will quickly realise that two worlds collide here. In the past, the traditional application process - especially the traditional health-related questions - were often criticised for being difficult to understand, insufficiently explained, time-consuming to answer and ultimately even bad for business.

As a result, for many years the tendency has been to shorten the questions - particularly health questions - on application forms. Although this has led to applications containing fewer questions, the questions themselves are longer and harder to understand. This makes for poor-quality answers for a number of different reasons:

  1. Customers have to make more of an effort to remember details relevant to their level of risk because the questions are not phrased in such a way as to prompt their memory.

  2. Grouping together aspects that are only loosely related to one another - details of different kinds or just different risk levels - means that the applicant faces almost a moral dilemma from which they can only escape by providing incomplete answers.


All of this was reason enough for us at Gen Re to take a close look at the risks and opportunities presented by the new application processes to enhance our primary insurance clients' efforts in tapping the potential for life insurance online.

As part of this, we worked with the Behavioral Insurance research team at the Institute of Insurance at TH Köln University of Applied Sciences in examining what form an online application process should take. This included taking into account findings from behavioral economics that gave us valuable pointers about how the wording of questions and response options can encourage people to complete an application and improve the quality of their answers.

The outcome of our project showed that a new application experience offers new opportunities for simplification compared with traditional paper forms. It is possible to make the process more convenient for customers without neglecting important factors.

Consequently, there are plenty of good reasons to take a close - and positive - look at the new opportunities for shaping application processes.

Would you like to know more about the findings from our behavioral economics research project, or do you need our help to implement corresponding projects of your own? If so, please contact us.


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