Insightive.tv: Can you begin by giving us an overview of your digital strategy at Royal London?
Rob: The Group digital strategy is very much one of starting with customer insights rather than starting with a digital strategy in and of itself. We are conducting customer research about customer requirements through the customer journey and customer life cycle. So we have not yet developed something that is independently called ‘digital.’ What we have looked at our the customer journeys through our organisation — made predictions about what the journey of the future is likely to be — and then looked at how digital plays a part.
Something we feel passionately about is not adopting technology for technology’s sake. There are still many parts of our market where there is real value in face-to-face conversations. If you think about the number of legislative changes in the last few years particularly around pensions — for example — that has led customers to face significantly more choice than they previously had. With greater choice comes the need for great conversations and guidance. We are not looking to replace valuable human contact with digitisation when we know our Customers place significant value on the conversations they have with us.
But we do feel passionate about giving customers choice. So in aspects of the customer journey that are simpler, less complex, where customers are actively telling us that they would prefer self-service or digital options — valuations, change of address, quotes and comparison — these are areas of the journey that we are looking to digitise. Because of this, we are more focussed at digitising the “use” and “service” of areas of the customer journey, rather than the onboarding process.
Historically, we are in the life and pensions arena, where there are lots of paper flows back and forth between providers, customers and their advisors. We are looking at utilising technologies like call recording, voice analytics, e-signatures and a number of other technologies to simplify and speed up these processes. But this is not the AI end of the spectrum and is rather efforts to clean up some aspects of an industry that has historically had lots of paper flowing around.
Insightive.tv: With that in mind, how digitised is the current process?
Rob: It varies hugely by proposition depending on the customer segments we are working with. For some of our simpler life insurance propositions, much of those journeys are online. You can go to our website, review all the terms and conditions and purchase the product online. It is the same in our protections market with our advisors. A significant and increasing number of our applications in protection are effectively straight through processes -— automated underwriting, automated online applications — whether that is a customer or advisor.
Some of the retail propositions that we sell directly to customers, already have a high degree of digitisation. You can fully purchase the product online so long as the product you are buying does not require underwriting.
Other products, where the customer outcome is more complex, we have consciously opted to not go down the route taken by other providers because the customer outcome to us is crucial — we still believe in the value of the conversation. We don’t deal with customers directly for pensions. We deal through intermediaries and financial advisors. So we do not sell our more complex range of products directly to end customers.
Insightive.tv: Is customer demand the main driver behind automating processes, or are there internal drivers such as operation efficiency?
Rob: It is mixed. The contracting process means very different things for different products. In the general insurance industry, currently, something like 70-80% of auto insurance is bought not only online but many through price comparison websites. This is a very different market to something like a life insurance, pensions or long-term savings products. In an industry like general insurance, there are very high degrees of automation, digitisation, with almost no human contact for many customers. In life and pensions, some providers are taking that strategy. But that is not the strategy of Royal London. The strategy of Royal London is about impartial advice and support in IFAs to provide great outcomes — making sure that the support and value we provide is throughout the entirety of the service.
Where customer research and segmentation shows us that there is a desire for technology, that is where we prioritise. We are not actively pressing a digital strategy that is focused on anything other than value to customers. We are not looking to be market leaders for unit costs or acquisition costs. Our strategy is one based on differentiation through service.
Insightive.tv: What challenges are there in automating and digitising the processes? Is the customer desire for the human though one the biggest challenges?
Rob: I wouldn’t see that as a challenge. If some customer segments really want limited human interaction and high degrees of automation, they may choose some other providers. What we are doing is making sure that they have the choice. For some protection propositions, for example, if customers want to buy low complexity products, and have non-complex personal needs, we give them the choice to interact with us in an automated manner. But we are not actively trying to push customers down a technology driven route just for the sake of reducing costs. In the long run, that does not add value to our business or the customer’s experience.
There is huge value in using technology to automate and digitise, but only to simplify things for customers. If, as a result of simplification — using technology to shorten cycle times, simplify experience — there is a reduction in cost, that is great. But that is not an end in and of itself. The end in and of itself is what customers demand — what improves the customer experience. As a mutual, we share our profits with our members so and reduction in costs ultimately enhances value for our members.
Insightive.tv: Would you say that the shift to a more digital customer journey is creating new levels of risk for the company?
Rob: I don’t believe so. Some circles suggest that there is potential for significant digital fraud activity, particularly in retail banking, for example. I don’t, at the moment, see that as a significant or unmanageable risk in the insurance industry. Of course, any time that online transaction happens, there is some degree of risk.
If you think about what an insurance business does — it effectively manages risk. This is just one of the risks we need to consider when selecting designing customer experiences. We have a very robust IT, information security program and infrastructure. As in any number of things, as long as risks are appropriately assessed, managed and mitigated, there is no reason that the introduction of technology should significantly increase risk.
Insightive.tv: Are there any organisation challenges you face in digital transformation?
Rob: It’s really interesting. Everyone will have a different view of what digital means. When we come back to what all of this means to customers, we have a great consensus across the group — simplifying and improving customer experiences through the use of great technology supported by well-trained people. Different parts of our business will inevitably need to move at a different pace because of differences in customer requirements. But there is no lack of appetite to continue to invest in good technology solutions to improve the customer experience.
What I can tell you is that we are committed to change. We do a lot of market camps, we stay open to what is out there. So do I see digital enhancement — yes. Do I know what the world will look like in three years — no.
Insightive.tv: How much of a priority would you say digitising the customer journey is within the wider transformation agenda?
Rob: We don’t have anything planned that has a badge that says ‘digitising the customer journey.’ What we have is customer journey transformation work, which includes a consideration for which bits are best does through well trained staff versus the use of technology and digitisation. We are not actively going out and saying — how do we digitise this process?
What we are doing is mapping end-to-end customer experiences across a range of products and services and working out which bits of the customer experience could be enhanced through the use of technology. It is the customer journey that is driving the strategy, not the other way around.
Rob Regan is Group Operations Director at Royal London. We spoke with Rob to get an understanding of how digital transformation and digital contracts are transforming business operations at Royal London.
Royal London is the largest mutual life, pensions and investment company in the UK, with Group funds under management of £93.8 billion. Group businesses provide around 9.1 million policies and employ 3,179 people.
Part of THE DIGITAL FUTURE OF CUSTOMER CONTRACTING series