Since 2014, third-party administrators have been in a race to scale the industry. According to the Global Insurance Third Party Administrators Market | Growth, Trends, and Forecast (2020-2025) report, while the TPA market size in the US continues to grow, the landscape continues to become increasingly competitive.
“While there are multiple growth drivers for the TPA industry, such as expansion in the scope of services and carrier outsourcing, there are a number of impending challenges as well that restrict the growth opportunities. Most of the digital-led use cases that TPAs have implemented thus far are low on the sophistication scale when compared to the use cases implemented by insurance IT or Business Process Outsourcing providers.”
As TPAs continue to try and level the playing field with technology, the larger question is, are the investments in upgrading systems even focused on the right area? And if the technologies implemented thus far aren’t meeting sophistication expectations, how does that impact customer communication in the end?
Claims satisfaction survey shows communication is a top issue
According to an Advisen Claims Satisfaction Survey, compiled with the input of 560 risk managers and brokers, lists improving client communication as an issue that cuts across all four lines of business studied: Property, Primary Casualty, Management/Professional Liability, and Cyber. Property customers were “generally satisfied with property claims handling”, but wanted “better communication” plus “online reporting and after hours service”.
Primary casualty respondents noted issues with “cumbersome online reporting portals” and “ a lack of regular communication”. Professional and Management Liability claims handling was ranked the highest overall among respondents, “but many stated a desire for better explanations on coverage and communication.” Cyber claim respondents noted a desire for “earlier and more frequent communication.” Customers are clear about what they want---better communication.
The missing ingredient — connecting the digital experience with customer communication
Customer communication with TPA clients is often defined as whatever messages, reports, and materials are sent (pushed) from the organization to the client. A wider view, however, also includes the online portals and systems the client uses to access (pull) real-time information from the TPA. In both cases, the TPA is communicating with the client. Together, these two components make up the digital experience for the customer. To improve customer communication, both sides of the digital experience must be considered.
The Advisen survey underscores the importance of this connection. Not only do TPA customers complain that they want better and more frequent push communications, but they also are demanding better online portals and pull reporting. However, as we will demonstrate, this is not where much of the technological push within the TPA industry is focused, leaving customers frustrated and creating a large opportunity.
Why client communication is a big competitive advantage
There is a clear disconnect between the levels of communication that customers are demanding and what they receive. Back in 2015, an Accenture report cited a conclusion by Forrester that spoke directly to this misalignment:
“The customer experience is at the heart of digital transformation. With customers in the driver’s seat of their interactions with brands, insurers must create positive and relevant customer experiences across channels and touchpoints. Although most firms are confident that the experiences they provide surpass those of their competitors and at least meet the expectations of their customers, this is not supported by the findings of other recent business and consumer surveys.” The same report highlights how tricky it is to successfully turn communication and digital transformation into a competitive advantage. “Only 9% of insurance organizations feel that they have mastered digital to a point of differentiation from their competitors.”
Fast forward to the 2021 State of Digital Transformation report, in a COVID-19 and post-COVID world, client communication is under an even more intense spotlight:
“Organizations are keeping the customer at the center of their strategy in 2021. Improving customer experience and engagement continues to be the top goal fueling digital transformation. Organizations are also increasing their focus on speed-to-market and innovation in 2021. Goals will likely be driven by a need to deliver contactless experiences and processes in a world where face-to-face interactions are limited.”
Though, improving customer communication through digital channels isn’t achieved at the flip of a switch.
The challenge of improving the online experience and communication
The article Transformation of the TPA speaks to just how difficult this transformation can be. “A Forrester and Accenture study found that, while 63 percent of businesses plan to improve their online customer experience, only 26 percent are actually prepared to execute those strategies.”
The same Accenture report mentioned above offers an explanation for why this is the case. “Insurance carriers are making strides across the three dimensions of digital transformation — organization, operational process, and technology — but are still struggling with traditional silos and a lack of integration and alignment. Many are stuck offering an average digital experience with limited understanding of what to do next, who should lead, and how to measure success.” Without a fully integrated solution, including tools that deliver the type of communication customers want, success can be elusive.
What does a customer experience that creates a competitive advantage look like?
Origami Risk offers all of the features that are critical for improving both sides of the digital experience.
Consumer insistence on access to self-service tools is likely to continue pushing onward into the business world, especially post-2020. Online portals with 24/7 access to customer data, reports, and dashboards fit today’s expectations and let customers do more on their own. An added benefit is that these portals can also reduce the demand on staff.
The previous post in this series covered how critical the customer-facing interface is in creating a competitive advantage. Personalization plays a critical part in that. Not only does this mean the ability to add logos and carry branding through to the customer-facing parts of the system, but it also means ensuring that different roles and stakeholders within the customer’s organization can each have dashboards, reports, and screens configured to meet their needs. Flexibility built into the system allows customers to control role-based access to data without burdening your staff or requiring vendor modifications.
Strong “push” capabilities
Provide tools allowing customers to specify the frequency and/or the criteria that should drive communications. Event-based messaging allows customers to set triggers that push out notifications, reports, and dashboards to specific stakeholders whenever thresholds are reached. Not only does this put the right information in the right hands at the right time, but features such as auto-generated PowerPoint reporting can translate complex data into powerful analysis that is ideal for management review.
While TPAs continue to invest heavily in a wide variety of technology, focusing on enhancing customer communication through the digital experience could create a significant competitive advantage and demonstrate a highly visible value add.
Start a conversation with us to learn how Origami Risk can help your organization do just that. To learn more about how to leverage digital pathways to improve customer communication, read the 5-minute recap of our Transforming your Workers’ Compensation Claims Organization webinar.