Insurers today have a strong interest in utilizing the most advanced technologies available in their new business initiatives, whether artificial intelligence (AI), blockchain, data science, or Internet of Things.
How can that best be done? In a word – or acronym – OMO.
Customer engagement is critical to today’s business growth needs. This is true in every industry, and life insurance is no exception. Better customer engagement for a life insurance company can translate into better persistency and purchase-value-per-customer metrics, enhanced branch values and referral volumes, and lower lapse ratios.
Enhancing customer engagement, however, can be a challenge. Whole life cover, the main product, is a long-term contract that generates few customer touchpoints once in force. Whole life policyholders generally only interact with their carriers for three needs: to confirm policy issuance; to pay annual premiums; and to request policy loans, if needed. Even shorter-term products, such as term life or annuities, have few customer touchpoints once they come into force compared with products in other industries.
To increase the number and frequency of life insurance customer touchpoints, some carriers are looking at developing applications that have both online and offline features that might increase touchpoints by offering more interactive as well as more effective servicing capabilities.
One of the fastest-growing frameworks for this OMO, better known as Online Merge with Offline (or just Online Merge Offline). OMO focuses on the strategies a company can use to combine cutting-edge online tools with traditional retail frameworks in order to gather the data to design online capabilities that serve offline needs and activities, thereby strengthening and improving the overall user experience.
These tools and frameworks, which leverage AI, digital payment systems, and Internet of Things, are increasingly being made possible by rapid technological improvements in these areas. Take a look at mobile phone platforms: OMO is already making a substantial difference in customer engagement in China. As a majority of Chinese cell phone owners already use smartphones to make digital payments, improvements in mobile technology are enabling both more customer ease and more effective gathering, storing, and analyzing of customer data, which will continue to improve user experience.
As life insurance covers a wide range of services that can bridge risks and assets in customer lives, understanding the OMO concept could help companies integrate and expand enhance online and offline customer touchpoints in ways that can solve customer challenges, meet customer needs, and enhance customer engagement.
An example of a good application of OMO comes from a Chinese insurer which in 2015 launched an online healthcare app. Since then, that app has grown into a 24/7 service platform with 300 million registered users. The app makes available healthcare services such as online medical consultation and treatment, online appointment booking and prescription fills, hospital referrals, and the ability for users to communicate with health care professionals when needed via text, photo, and video. It also provides non-healthcare services with known value to customers, such as housing and relocation. The app’s substantial pool of online and offline health data gathered over the past few years is enabling the company to not only create better products and target them more effectively, but also improve mortality and morbidity risk prediction.
A second example is from a Japanese healthcare company, which offers gamification-based competitions such as number of steps taken or amount of weight lost to employee groups. Individuals are already using wellness apps that log walking to earn points that can be used to purchase a variety of goods and/or services. Games can leverage peer pressure, which can reinforce customer relations and perhaps even improve health.
In a third example, an insurer app has been designed where the application process permits smartphone video chats. The application process takes the client from product recommendation and ID confirmation through to pricing, completion of the application, and policy confirmation.
Offering value-added services to customers can improve the data-gathering process, which can ultimately lead to improved insurance service experience. For example, a possible near future application of OMO for insurers could be using medical checkup data both to enable premiums calculation instead of attending physician statements or electronic health records and to target wellness product offerings.
The key to successful incorporation of OMO in an insurer’s strategy is solving customer challenges by enhancing customer experience. It is also important to incorporate qualitative user experience aspects such as convenience and even fun. Customer services can be continuously improved by understanding when and what kinds of services are used, and for which needs. The particular ecosystem of data and customer experience, where, subject to data privacy law compliance, customer data is centrally and continuously collected and analyzed to continuously improve customer experience, is key to successful OMO.