Insurance has been around for hundreds of years, and is one of the oldest industries alive today. What began as protection for merchants and their cargo, has now evolved to be a non-negotiable part of life. There’s insurance for your car, house, apartment, health, even your pets can have plans that analyze risk and protect against an unfortunate circumstance.
Despite the longstanding history and its seeming permanence, insurance still needs to adapt to the changing expectations of consumers. Insurance is a necessary evil that consists of endless red tape, loopholes, and unnecessary complexity when customers need them most.This is the Customer Experience economy. Industries that were once safe will only survive if they are able to provide unique value and memorable experiences to their customers.
There are those in the insurance industry who are taking the right steps to remain relevant. Integrating technology, listening to their customers, setting an example that those who haven’t yet made attempts to adapt should be quick to follow.
Lemonade is the relatively new company that is doing just that. The company is disrupting the insurance industry by “remaking insurance as a social good, rather than a necessary evil.”
They have managed to make insurance seem appealing, even somewhat cool, and it has more to do with their customer experience than their comparatively hip name. The company uses technological innovation to provide “time well saved”, a concept introduced by Joe Pine, and something exceedingly rare in the bureaucracy of the insurance industry.
Here are 3 Techniques Lemonade Uses to Sweeten the Insurance Industry.
Customer’s expectations have changed from where they once were. Digital integration gives customers ease, convenience and reliability. All three are things the insurance industry historically lacks.
Lemonade’s platform is available through their mobile app and website, no office necessary. While this is not a model that works for every customer, or business for that matter, by having customers deal with bots instead of brokers, and using their algorithms in place of paperwork, the customers experience is at the forefront.
I have to admit I was drawn in by the efficiency the company’s ads promised, but was pleasantly surprised to find that Lemonade was able to mimic the feeling of human connection through their website, communication and emphasis on transparency.
Through digitization, Lemonade manages to have more direct access to their policyholders than if they had a physical location. While customers miss out on face to face interaction, they are rewarded by “instant everything” and trust that the company has their best interest in mind.
Automating Processes with A.I.
One of the biggest issues facing insurance customers is the length of time it takes to do any process. In 2017 the average claim took around 3 days just to have the insurance adjuster reach out to the customer.
Lemonade uses artificial intelligence and chatbots to deliver insurance policies and handle claims for its users on desktop and mobile. They advertise the estimated time it takes to get insured at 90 seconds, and a claim payout speed of just 3 minutes.
The company does this thanks to Maya, the A.I. bot Lemonade uses to handle basic claims and policy. Once a claim is submitted with the information of what happened, the A.I. runs “18 anti-fraud algorithms” and can either pay you right away or escalate the claim to be handled by human representatives.
During my process, I was asked some quick questions. What’s my name, address, do I rent or own, do I have roommates, and if I was a dog owner. Maya even asked if I was already insured. Offering to notify my current company of the change, a relief for the non-confrontational side of me, which is an added convenience. None of these were terribly intrusive, and in total, I spent 5 minutes filling everything out.
Now, I don’t remember how long it took me to get my insurance policy. But I had to search for an office nearby, drive there, wait to be seen, then sit and explain my situation, pretend to read all 40 pages of documents and then sign the policy. In comparison, Lemonade took less time than it takes to think of a hashtag for my dogs’ Instagram.
Lemonade holds the fastest claims processing time of 3 seconds! But automating with A.I and chatbots to handle policy and claims processes not only speeds up the processing times, it frees up employee resources.
The proof can be seen in the company’s CX team. Each CX representative is able to support over 12,000 customers and can consistently dedicate themselves to providing “ great service, simplicity, and transparency”.
Adding Heart to Insurance
Insurance is an emotional business. Customer Experience and Customer Service teams have the difficult job of dealing with customers reaching out in moments of inconvenience, loss, and catastrophe.
Lemonade emphasizes the fact that they are Public Benefit Corporation with social good embed in their business model and can be seen in their Giveback feature. Each year, the company takes any money that is leftover after claims and donates it to a cause their policyholders are passionate about.
The giveback feature helped push Lemonade into the “worth it” decision for me. Despite the fact that I never had “philanthropic” as a requirement for my insurance provider, Lemonade giving money to a cause their policyholders chose instead of pocketing the left over money created an emotional connection for me.
While the Giveback is only available when there is unused money for claims, the sentiment itself seems to resonate with consumers. As of June 2018, Lemonade has sold more than 200,000 policies, and there are no signs of them stopping anytime soon.
During the writing of this blog, I questioned family and coworkers on how they chose their respective insurance companies. The most common answer was that a friend or close family member had that insurance, so they decided to follow their lead. The second most common reason was price.
While this was just a sample of my peers, the sentiment behind their responses point to compliance rather than satisfaction. There is no sort of loyalty associated with their choice. While they are giving these companies their business right now, they would absolutely change if something better came along.
Insurance cannot survive just off word of mouth and competing on price. Lemonade is considered a disruptor in the insurance industry, and a large part comes from their investment in these customer experience techniques and innovation. By offering consumers “time well saved”, they allow customers to spend that saved time doing things they love.
Customer centricity is clearly a rarity in the insurance industry, so something as simple as considering your customers’ experience can be a major distinguisher.
Lemonade is proof that without something to distinguish you from your competitors, not only are you forgettable, you’re replaceable. And there’s nothing sweet about that.
Dayana Aparicio Originally from Panama City, Panama, studied Sociology and Business Management at Georgia College & State University. Customer Success Specialist and Junior Content Producer at Worthix. Focus is on present and future trends in customer experience.