How the insurance industry is utilizing SMS text messaging to develop its business - Solution Perspective
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How the insurance industry is utilizing SMS text messa- ging to develop its business Solution Perspective
The contents of this document is a compilation of information from various sources. It re- flects the general context of the insurance industry but no single company. © LEKAB Communication Systems AB 2015
SMS for quick and effective com-
munication
Customer dialogue, the key to success for the insurance
industry
The insurance industry is in the midst of an exciting develop-
ment phase that is providing a host of new challenges and op-
portunities. New and revised regulations have brought about a
total rethink within the industry. Long-established insurance
companies are meeting increased competition from smaller and
more niched players, as well as from companies that do not
normally deal in insurances. With strong consumer brands be-
hind them, good consumer insight and established digital chan-
nels, these new players are making inroads into the insurance
market. Internationalization is growing in pace with larger
companies broadening their base from being key players on a
local market to being able to offer their service pan-Nordic.
Digitalization is bringing about rapid changes in consumer be-
havior and in the way value is created for policyholders. Con-
sumers in general, and policyholders in particular, are demand-
ing more flexibility, accessibility and simplicity. They expect to
find information online, get help over the telephone and take
advantage of the accessibility provided by mobile channels.
It has become imperative for insurance companies to rethink
and act quickly. Speedier product development and targeted
offers are becoming increasingly important competitive means.
A close customer dialogue is a prerequisite for success. This
applies to both meeting the customers in their preferred chan-
nels and guiding throughout their journey.
SMS for fast and effective customer communication
Texting offers a number of advantages to those wishing to
communicate quickly, smoothly and effectively, right into the
recipient's mobile, in their hand, pocket or bag. In Sweden and
the other Nordic countries SMS is a relatively pure communi-
cation channel, meaning that most texts are read. Texted ques-
1 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSFigure 1: A company-wide SMS-platform supports a variety of func-
tions and services used for internal as well as external communica-
tion
Targeted
promotions
Preventative Interactive
tips and advice promotions
Offers and
suggestions
Reminders
Meeting
confirmations
Customer-oriented
Surveys and services
questionnaires
SMS-platform
Internal services Simplified
claims
One-time
passwords Alerts
Business info
Internal
communication
Employee
call-ups
tions usually get a quick reply. Text recipients have the choice
of deciding whether to reply immediately or when their meet-
ing is over.
Texting is nothing new for the insurance industry, having been
used diligently in recent years, mainly as a means of improving
internal efficiency; from sending a one-time password to users
to rapidly informing an IT department when something has
gone wrong.
Today, increasingly more insurance companies are realizing the
opportunities offered in texting to sharpen their competitive
edge and improve their sales. A joint company platform can
easily be integrated into the majority of systems used by insur-
ance companies. It is easy for different parts of an organization
to add services that communicate through SMS channels. This
2 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSlowers the threshold for introducing new services that generate
a positive customer experience. As well as bolstering internal
efficiency, texting is also a useful tool for finding new custom-
ers, bolstering customer relations, increasing sales and develop-
ing and improving the service offer.
SMS as a means of acquiring new
customers
When each new customer enhances company performance in
this way there is also direct value in investing in new customer Confirmation of meeting
recruitment. There are many ways of using texting to attract with personal advisor Sofia
Andersson at 1pm on Nov.
new customers and increase sales. 21. Welcome to Insurance
Company, Storgatan 32. If
Confirmations and reminders improve meetings precision
unable to attend please call
Telemarketing is a common way for insurance companies to us on 08-20 30 40.
book meetings between insurance brokers and potential cus-
tomers. For this type of marketing to work effectively it is im-
portant that the booked meetings actually take place.
With an SMS service connected to the booking system confir-
mations can be texted automatically to the meeting participants
during booking. The same service enables a reminder to be
sent the day before it takes place. A reminder straight into the
We would like to remind
mobile phone is a self-explanatory service that gives added val- you that you have an advi-
ue to the recipient. Confirmations and reminders reduce the sory meeting booked with
risk of the meeting being forgotten, thus improving meeting Sofia Andersson at 1pm on
November 21. Welcome to
precision. When the possibility exists to confirm a planned
Insurance Company, Storga-
meeting quickly and smoothly like this it also improves the tan 32.
chances of the meeting actually taking place.
As a complement to this automated business system communi-
cation, advisors and brokers may also send their own texts di-
rectly to their clients and personal contacts.
Interactive SMS promotions activate the consumer
In the battle for customers you have to do more than just build
brand awareness. It is also important to invite potential cus-
tomers to a dialogue through various channels. This is where
3 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSincoming SMS from consumer to insurance company offers a
host of opportunities for companies in the insurance industry.
Promotions, outdoor advertising and TV slots encourage con-
sumers to contact the insurance company online or by phone
to buy a policy or to get more information. The downside is
that the step from being made aware of and becoming interest-
ed in a promotional campaign to taking contact is prohibitively
large for most consumers.
Offering consumers the chance to text their interest lowers the
contact threshold. Texting also removes the time element. In-
stead of having to remember to call when the film has ended
or when they are sat on the bus, consumers can show an im-
mediate interest for more information. The marketing depart-
ments who work with SMS response often see a greatly in-
creased impact of their promotions when the TM resources
can be focused to reach the individuals who are genuinely in-
terested.
Dedicated SMS short codes also make it easier to follow up
individual promotions. Another alternative is to tag the mes-
sage with a promotional code or a key word.
Offers and suggestions to the mobile phone quickly and
smoothly
SMS can be used to text and manage offers directly to the mo-
bile phone, an interesting application area for vehicle insur-
ance, for example.
For most people buying a new car the requirement for instant
vehicle insurance just complicates the whole procedure. Offer-
ing the customer the chance to surf to the insurance company's
website for an instant quote by entering their new car registra-
tion number and mobile phone number greatly simplifies the
process. The quote can be accepted by responding to the text.
Connecting a specific message with a specific response via a 2-
way SMS makes the response traceable and the process highly
reliable, even if several messages have been sent to the recipi-
ent.
The same format can also be used for other types of property
insurances.
4 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSSMS as a tool for customer service
and increased sales
The ability to get a relevant message across at the right time
makes texting an effective tool in engaging and retaining the
company's customer base. An active customer dialogue con-
tributes to a positive customer experience that enhances the
opportunities for up and cross selling, while improving the
chances of the policy being extended on expiry.
When an SMS service is integrated with the company's CRM or
customer service system, the SMS dispatch is directed at differ-
ent types of customers based on the products they have pur-
chased, their interests and their status on the customer life cy-
cle. The connection to the business system makes it possible to
trigger automated dispatch containing specific information to a
specific person or group of individuals at a specific time.
Generate increased sales through targeted promotions
The possibility of integrating an SMS service with the compa-
ny's CRM, promotional or other business system makes it easy
to customize SMS promotions targeted at different segments
or groups in the customer base. This way the promotional of-
fer, event invitation or information about changes in the insur-
ance offer reaches hundreds and thousands of regular custom-
ers at the same time. Integration with the business system ena-
bles the dispatch to be automated, thus increasing efficiency
and improving communication precision.
Reminders of important events
Dear customer, just to let
Another way to reap the rewards of an integrated solution is to you know that we have not
received payment for your
dispatch information and reminders connected to various
latest invoice. If you have
events in the customer calendar. Brief texted notifications are any queries please call us
often looked upon by the recipient as good service. They could on 08-20 30 40. Kind Re-
be to inform the customer of an invoice having been sent to gards Insurance Company
their internet bank or a reminder of an insurance period com-
ing to a close that needs to be extended. A late payment re-
minder is also appreciated as a positive service by most recipi-
ents if it is pleasantly worded.
5 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSDeepen relationships and improve customer insight by us-
ing surveys
Many insurers use texting to quickly and smoothly send ques-
tions or simple surveys to customers. When the SMS service is
connected to the company's customer service application, a
question can be triggered as a follow up to a discussion to al-
low the customer to provide feedback.
Texting is also an effective way of reaching respondents to
marketing surveys. A text can either carry the whole survey or
provide a link to a more detailed online survey. Using SMS sur-
veys to gather input improves the company's awareness of their
customers' needs and preferences and helps to forge relation-
ships.
A service that simplifies and im-
proves customer experience
On top of offering a good value and effective channel for mar-
keting and selling the company's products, texting also offers a
host of opportunities for companies looking to develop their
service offer. Use of the simple, quick and fully mobile SMS
channel to enhance service levels and improve the insurance
portfolio is still at its teething stage. This means there are still
plenty of opportunities for players who choose to invest in tex-
ting to improve customer experience and take a position on the
market.
Reduce damage through preventative tips and advice
A challenge for all insurance companies lies in providing their
customers with effective tips and advice in order to reduce the
amount of damage. One SMS application area is in providing
mobile phone weather reports. Information on upcoming cold
spells, expected rainfall, blizzards and avalanches helps the re-
6 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESScipient to adapt their behavior and minimize the risk of per-
sonal injury and property damage.
An SMS service that provides preventative advice enhances
customer benefit and customer satisfaction while helping to
reduce the number of claims.
SMS alerts facilitate rapid assistance
For accidents and other emergencies, texting makes it easier
for those involved to report the incident and receive rapid as-
sistance. Through integration with a mobile positioning service,
those involved in a car accident, a boat wreck or are lost in the
mountains can simply and quickly alert their insurance compa-
ny as to their position. At the same time as the incident is being
filed with the insurance company the emergency services can
be alerted to rescue those in distress.
Simplified insurance claims straight from the mobile
The possibility of making an insurance claim online gives cus-
tomers more flexibility, but many policyholders lack a rapid
and continuous feedback channel on the claim after it has been
filed. This leads to people ringing in to get confirmation of the
claim having been filed or with queries about its status and
when they can expect to hear something.
Texting confirmation of a claim having been filed and giving
continuous status updates improves the customer experience.
It also cuts down on the number of calls to customer service,
thus giving direct savings.
It is also possible to offer services for complementing written
claims with texted photos taken by a mobile phone. In pace
with MMS being replaced by app-based services, new possibili-
ties are arising that simplify the whole procedure.
SMS continues to streamline inter-
nal processes
Many of the new SMS application areas are aimed at helping
insurers get closer to their customers through an extended dia-
7 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSlogue. SMS has long contributed to simplifying and streamlin-
ing internal processes. One-time passwords are texted to mo-
bile employees. Insurers' IT departments use SMS services to
text alerts and proactive information from applications and IT
networks to their technicians. Even at major corporate events,
the rapid direct channel is very useful in keeping all concerned
updated on activities and agenda.
Financial institutions use texting to quickly and smoothly reach
out to their employees with financial information related to
purchases, mergers and emissions. It opens up a myriad of op-
portunities for insurers to broaden the internal use of texting
to keep employees informed of everything from market up-
dates to latest weather conditions.
To sum up, SMS is a powerful channel for companies looking
to streamline their communications. The possibilities are many,
spanning from improving and streamlining internal processes
and reducing costs, to deepening customer relationships, lead-
ing to increased revenues.
Success factors for SMS in the in-
surance industry
Companies looking to increase their use of SMS communica-
tion have a lot to gain from the lessons learned by other play-
ers. Three success factors are particularly salient for successful
implementations.
1. Successful implementations emanate from the recipient
Successful SMS services are appreciated by the recipients be-
cause they are relevant. Therefore, the development of new
SMS services should always emanate from customer needs and
expectations.
The possibilities of using SMS in customer dialogues are many
and what is relevant in terms of applications and information
differ from one customer segment to another. This also con-
8 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESScerns the number of texts deemed as reasonable and the times
of day that are most effective. A promotion with a good offer
texted to a stressed parent first thing in the morning risks being
quickly forgotten. A reminder texted at 3am is not particularly
popular either, regardless of content and relevance.
The total experience is not only affected by that which is texted
from customer service or the marketing department, but also
by the overall communication from the company. Communica-
tion with the target audience requires consensus between the
various departments.
2. Business development and technical implementation go
hand in hand
Close cooperation between the company's business side and its
IT side is a crucial success factor in getting maximum benefit
from the use of SMS as a communication channel. While de-
mands for internal efficiency measures mostly originate from
the IT side, the majority of ideas for new services and a closer
customer dialogue stem from the company's sales, marketing
and customer service side. For an SMS service to create added
value in the business processes, a good close dialogue is needed
between the business and/or customer service side and those
who run the IT system who have the expertise to implement
the new services.
Successful organizations do not regard business development
and IT as two separate entities but as two complementary parts
in the business development. Close cooperation not only pro-
vides commercial clients with a better insight into what the
new technologies offer, it is also a prerequisite for IT to under-
stand the business opportunities that are behind the new de-
mands and expectations placed on the organization.
3. Business is local but not necessarily the technology
Insurance companies that operate in the international arena
know that business conditions differ from country to country.
Offers and business models therefore need to be adapted to
the different markets.
Successful implementations take advantage of the synergies
generated by an integrated approach to technology and plat-
9 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSform development. At the same time they provide space to
tailor service development based on different geographic mar-
kets or customer segment needs. This in turn puts demands on
the technical platform and collaborations needed to implement
the services. The key is in finding a solution that facilitates inte-
gration on a broad front towards several different vertical ap-
plications as well as market support systems.
---
Insurance companies that address all three factors, e.g., focus-
ing on putting the recipient at the heart of things, building
bridges between the business side and IT side while managing
to balance the local market variations with central synergies in
an effective way have the best chance of succeeding in their
SMS initiatives.
10 HOW THE INSURANCE INDUSTRY IS UTILIZING SMS TEXT MESSAGING TO DEVELOP ITS BUSINESSLekab – the insurance industry's SMS supplier We are an established supplier of business-critical SMS services to the leading Nor- dic insurance companies. We have operated on the Swedish market for 20 years and still have close business ties with many of our first customers in the banking and finance sector. Today we help almost all leading banks and insurance companies in Sweden to address their business challenges and develop new business opportunities by using SMS. Our broad SMS platform can be integrated with most business systems and process- es, thus making it possible to bring together many different applications and gener- ate new synergies. We provide customized solutions throughout the chain to meet each company's need for simple and smooth communication, from business plan- ning, specification and integration to operation and continuous follow up. Read more at: www.lekab.com Sweden Finland LEKAB Communication Systems LEKAB Communication Systems Dalagatan 100 Teknobulevardi 3-5 113 43 Stockholm 01530 Vantaa Email: info@lekab.com Email: info@lekab.com Tel: +46 8 635 26 00 Tel: +358-9 7252 75 40 Fax: +46 8 635 26 10 Fax: +358-9 7252 75 90
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