how sms text messaging has long contributed to simplifying in the insurance industry

Text messaging may be a less satisfying communication option — due to its emotional superficiality, the inability to decipher nuance or sarcasm, and its use to avoid actual conversation.

But today’s tech-savvy, forward-thinking insurance businesses have little choice but to incorporate texting (along with app-based messaging) into their prospecting and customer relationship management plans as texting is overwhelmingly popular among consumers, especially millennials.

Consider how far text messaging has come in roughly two decades, based on reporting:

• 97% of Americans sent and received at least one text message a day, according to the Pew Research Center.
• Worldwide, consumers sent about 23 billion text messages a day, or 16 million per minute, according to Portio Research.
• Text messages have a 98% open rate, while email has only a 20% open rate, according to Mobile Marketing Watch.

Continue on to learn why nine different insurance, technology and customer care thought leaders believe texting should be used to strengthen customer relationships.

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1: There are fewer regulatory hurdles than in the past

At one time, text messaging between customers and businesses — including insurance and financial services — posed a conundrum. Among other reasons: Federal communications law requires that consumers must consent in writing to receive any commercial text messaging.

However, today’s communications vendors are building text messaging services that accommodate regulatory compliance demands while furthering a company’s business needs.

Prudential Insurance is among the industry leaders that now capitalize on text messaging. Based on the company’s success with social media campaigns, moving into text communications "was really a no-brainer for us," Birdia Chambers, Prudential’s head of social and digital strategy said in a recent blog post penned by Myriah Wood, the product marketing manager for Hearsay Systems.

Wood explains that texting grew to become a powerful business communications tool because more than half of today’s financial services professionals are texting clients, and statistics show that almost all text messages are opened, most within just a few minutes.

2: Texting enhances traditional prospecting strategies

Jaimie Pickles is general manager of insurance with the consumer data and analytics company Jornaya.

He says the use of text messaging is on the rise now that companies have become savvier about securing written consent from consumers to receive a text, which is required by the federal government’s Telephone Consumer Protection Act (TCPA).

"Consumers typically read an incoming text immediately whereas voice and email are lower on the list of priorities," Pickles says.

3: Texting is what people want

Keith Savino considers text messaging to be essential to today’s business relationships because it's what his clients want. Savino is a partner and chief operating officer for Warwick Resource Group, LLC, an insurance agency and brokerage based in Warwick, New York.

"As technology evolves, the methods of communication change," Savino says. "Phone, email and texting are the predominant methods of communication in life today. As a result, agencies need to adopt systems that allow them to communicate and document this communication in our systems of record… No one method can satisfy an entire book of business."

4: Text messaging supports customer records and engagement

Fazi Zand, senior vice president of products at EIS Group, says there are multiple reasons for insurers to embrace texting along with chatbots. Zand shared these thoughts via email:

"While insurance customers readily opt in for text (SMS) notifications such as status of claims, payment and renewal reminders, and agent messages, any two-way conversations with insurers are far more likely to happen within chat services bundled in the insurer’s digital services, or via external services such as Facebook Messenger or Twitter. Customers are growing increasingly comfortable using digital apps for interactions with insurers for claims and status, to make payments, get quotes or other services."

"The next related step is integrating chatbots into these conversations. By integrating chatbots into interactions, insurers are able to respond to FAQs, guide conversations and triage requests, and quickly gather essential information for frontline agents. Employing chatbots within virtual assistants can provide significant cost savings by improving efficiency and outcomes, enable 24/7 availability and improve the user experience for all stakeholders."

"Looking further forward, expect customers to warm to new chatbots with natural language understanding because these conversationally savvy bots will be enabled to watch, listen and understand their spoken questions and responses and leverage sentiment analysis techniques to enhance the experience, while also helping to remove the burden of data entry."

5: Texting supports a multi-channel communications strategy

Gail B. Goodman is a national expert on telephone use and strategy, and a regular communications columnist. She acknowledges that text messaging has become pivotal to communications today, but warns against relying on it too heavily or to convey weighty messages.

"Texting … is only one of your tools and needs to be used judiciously," Goodman says. "Being able to add inflection to your words will often save you from being misinterpreted through a digital-only message."

Goodman impresses upon business leaders the power of finding and using their real voice.

"The best use of texting is to clarify information, such as confirming an appointment or advising your client if you are late due to traffic," she says, "but not to ask any critical questions."

6: Text messaging falls in line with the on-demand economy

Insurance and finance tech innovation experts often to point to the way Amazon and the Internet of Things (IoT) have shaped today’s consumer tastes.

Laura Drabik, vice present of Business Innovation for Guidewire Software, says insurance companies of all sizes must consider SMS/texting to take advantage of its ability to provide customers with real-time service.

"This approach is especially useful for claims adjusters' communication with claimants, i.e. claims first-notice-of-loss, inquiries and updates, and the like," Drabik says. "Some insurers and agents use texting to quote/sell to customers/policyholders. Core systems must also be considered in the process, as texting only serves as a digital front-end; it is the core system that enables the actual transactions to take place."

7: Texting, along with social media, opens up a 24/7 line of communication

More than 3 out of 4 Americans now own smartphones, and 9 out of 10 Americans are online. John Sarich with VUE Software says it follows that text messaging has become valuable to the business-to-consumer (B2C) relationship.

"The ability to message is largely a function of having [a smartphone] and sharing the number with clients so they can text a message 24/7 to the agent or service rep," Sarich says. "Also, many agents do use Twitter, giving their clients easy access to them."

Texting applications on the B2B side in insurance, however, may present more adoption challenges.

"First, the carrier needs to have good portal technology and the ability to give access to agents to review certain things such as claim status, underwriting status, commission information, and so on," Sarich says. He adds that instant messaging built into a website may be more functional for carrier-to-agent or vendor communications than traditional text messaging.

8: Text messaging keeps insurers competitive

Since other industries have already adopted and executed text messaging as part of their customer engagement strategies, insurance carriers must fall in line with contemporary consumer expectations.

"The customers of today have increased expectations around digital capabilities," says Chuck Ruzicka, vice president of research and consulting at Novarica, a research and advisory firm focused on insurance technology. "Airline companies have learned to use texting to provide updated flight information to delayed passengers and to actually improve customer experience during difficult times. Insurance carriers can utilize this same technique to update claimants on everything from emergency service status to electronic settlement deposits. The keys are having knowledge of customer preferences and integrated digital processes, which are not easy tasks for carriers with legacy system portfolios."

9: Text demands clear, concise, straightforward messaging

Lisa Woodley is vice president of Customer Experience and FSI Business Consulting at NTT Data, a global IT services company based in Tokyo that caters to many industries including insurance.

Woodley recognizes that the decision whether to use text raises complicated issues for companies in the insurance and financial services sectors. "The intersection of customer preferences, broker or agent habits, and regulatory considerations means insurers should carefully consider when and how to use text messaging," she says.

Akin to capitalizing on each social media channel, or traditional communications such as 'snail mail,' texting may be ideal for certain types of communications, such as messages that are "brief, clear, and contains no sensitive information," Woodley says, or those messages that have a sense of urgency. Banking and billing alerts, for instance, are well-suited to text messaging. In insurance, texting may also work well for claims-processing notifications.

"It's important to allow customers choice," she adds. "Let them define what is urgent and what types of texts they wish to receive from you. Never assume."

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