The future of digital: leadership and trust in the digital age

Insurers are focusing on digital transformation to create better member experiences and drive engagement. To make the most of this opportunity, we need to make sure we have our priorities right from the start.

Providing leading digital experiences is about far more than cool UX designs and mobile apps. As we embark on a new era of digital transformation, insurers need to consider a new mandate that embraces leadership and trust in the digital age.

Compared to the rest of the financial services industry, life insurers have typically been slower adopters of digital technologies. We have been held back by our complex products and processes, low member engagement, and focus on keeping expenses low to minimise the cost of insurance. Unfortunately, this lag has negatively impacted the member experience.

While these challenges are tricky, they’re not impossible to overcome. American industrialist Henry Ford once said that ‘coming together is the beginning, staying together is progress, and working together is success’. All stakeholders across the ecosystem – including super funds, insurers, and administrators – must work together to invest in the digital experience members expect and deserve, while balancing the commercial realities of the industry.

The question, of course, is where to start. We are a partnership business, and I believe there should be four key priorities for enabling partnerships that transform the digital ecosystem for group insurance.

1. Reduce product and process complexity

Right now, insurance in super is often only a digital front-end. We have shiny websites and apps, but the back end is often delivered by manual processes. We won’t be able to reap the full benefits of digital investment until our products are simplified, and in turn, underwriting and claims processes are more straightforward. We need to get to a place where we operate as completely digital businesses, where user action at the front drives automated actions at the back.

While insurance product simplification is still a work in progress, every insurer can look to streamline their processes to improve operational efficiency. For example, TAL’s self-service Claims Assist tool delivers 35% faster decisions when members use it to upload documents in the claims journey as some manual processes are by-passed. It also reduces payment timeframes by an average of 19 days.

2. Create a simple, seamless, and safe digital experience

Moments of truth matter in every service industry. Activities like applying, transferring, and even cancelling insurance need to be as simple and seamless as possible to create positive member experiences.

A large part of the digital experience is about trusting the service provider. Recent cyber-attacks and increased focus from regulators have highlighted the importance of protecting member data and maintaining robust cyber-security. Traditionally a ‘non-functional requirement’, cyber security is now our number one-member experience principle. The trade-off here can be the speed at which we deliver new initiatives to market, as we must ensure the safety and resilience of the technology we invest in.

It’s also important to question whether you always need to collect member data – even if not doing so will limit the personalisation opportunity in the experience. For example, when we developed Headlight, TAL’s award-winning mental health engagement tool,¹ we chose not to collect personal data to encourage engagement, increase confidence and minimise risks.

3. Prioritise people

While digital experiences need to be efficient and streamlined, members should always have the opportunity to speak to a person who can answer their questions and provide them with more information. At TAL, empathy is at the core of our business and this is particularly important within the claims journey. We know members increasingly expect immediate results, particularly when they are unwell or injured. But we also know that when members are making a claim, they will be sharing a deeply personal story and therefore deserve high quality interactions with our people.

If we need to discuss complex matters or have difficult conversations, we’ll always aim to do so over the phone. That way we can provide them with support on the spot if they need it, whilst our digital services enable the transactional and tracking features for smooth claims processing. This focus on claims service excellence is validated by our industry-leading results, including one of the lowest levels of disputes per 100,000 lives insured.²

4. Increase member engagement

Every super fund and insurer wants to increase member engagement, and achieving this goal means delivering a good member experience. It will be easier and more successful to engage members when there are streamlined processes, a solid digital experience, and embedded human engagement opportunities.

That’s not to downplay the importance of member engagement. The insurance in super opt-in rate is just 18%, or 8% for blue-collar occupations.² This is partly due to members not understanding, calculating, or properly valuing their potential risks or their future financial circumstances. With Protecting Your Super, Putting Members’ Interests First and stapling now in place, we need to be able to reach members – both uninsured members and those with default insurance – so we can help them understand the value of insurance and support them in making proactive choices.

It’s worth making the effort to get it right. High member engagement is a big contributor to a service provider’s net promoter score (NPS) and retention rates. A TAL-led survey of 1,000 members highlighted that on average, members with voluntary cover had a 10-point higher net promoter score (NPS). They were three and a half times less likely to leave the fund than those with default insurance alone, and five times less likely than those with no insurance at all.³

TAL’s investment in innovation

TAL has been investing over the long term in innovative, member-centric solutions and simplified, streamlined process enhancements with human care at their core. While we still have a way to go, we know that digital-first experiences play a big role in member retention, satisfaction, and growth.

Digital trust is right at the heart of our digital strategy. When we design digital experiences, our initial focus is on embedding security principles that will keep members safe online, while balancing the need for simplicity. This encourages us to build security decisions early into our development process for digital products.

In line with this approach, we’ve recently launched our new digital platform, TAL Connect. TAL Connect delivers an end-to-end insurance journey for simply lodging and tracking claims and underwriting applications, all with increased automation and straight-through processing in the back-end, and leveraging APIs to enable quick and seamless journeys for members. As we continue to develop this platform, we’ll maintain our focus on balancing digital experiences with technology risks, while making the most of member engagement opportunities.

Striking the right balance

This new digital era is a great opportunity for the insurance industry to reframe itself. Super funds, insurers and administration providers all need to work together to get these four elements right. To be successful, we need to strike the right balance between leveraging digitisation to streamline operational processes, improve the digital experience and increase member engagement, while keeping people central to our service experience when and if members need it.

Even as we become more digital businesses, we still need to be able to listen, empathise and understand what members need from the process. It’s about digital supporting people, not the other way around.

1 Winner of the ‘Innovation – Health and Wellness’ category in the AFA Life Company of the Year Awards 2022

2 As outlined by ASIC on the MoneySmart website.

3 ASFA & Deloitte Access Economics, The future of insurance through superannuation, 2022.