• Cognizant 20-20 Insights

WhatsApp Insurance? Shouldn’t WeChat? By embracing mobile , insurance carriers can reduce operating costs and deliver more timely, satisfying and authentic customer experiences.

Executive Summary The Rise of Mobile Messengers WhatsApp, WeChat, Messenger and The increased popularity of is similar instant messaging apps are no longer made clear by the following statistics: exclusively intended for exchanging trivial text • By the end of 2016, nearly 2.2 billion people will , sending ubiquitous selfies or finding own and use smartphones.1 your friend’s house. Rather, each messaging app is much more than the sum of those parts. Used • There are currently nearly 7.0 billion mobile 2 effectively, these messengers can be the tools subscriptions worldwide. of new-age distribution, digital marketing, after- • WhatsApp, the most widely used messenger on sales service and customer support. the market, counts 800 million monthly active users. WeChat claims 549 million monthly In fact, what was first recognized by entrepre- active users, and claims neurs as an inexpensive way for businesses to 600 million.3, 4, 5 stay connected with their customers has become a medium of choice for many big players, cutting • transaction values are across industries. For instance, Bank Kassa Nova expected to reach $721.4 billion by the end of 6 in Kazakhstan has partnered with WhatsApp to 2017. send alerts; Marriott and TripAdvisor are working The phenomenal growth of mobile instant mes- with WeChat in to provide travelers with sengers can be attributed to the following factors: innovative search capabilities, as well as channels dedicated to HR and job opportunities; companies • The exceptional penetration of smartphones, such as Armani and Cartier are advertising their emergence of high-speed 3G and 4G Internet products through messaging apps; and vehicular and lower data costs.7 traffic management is being aided by WhatsApp • The ability to increase personalization through in India. direct interaction and tailored customer com- munications. Meanwhile, these messengers have the poten- tial to reshape the insurance industry. This white • The ability to efficiently address ad hoc/person- paper examines the features of mobile messag- alized customer service demands. ing apps and how they can be used to significant • Exceedingly low cost, regardless of the scale advantage across the mainstream insurance and frequency of messages, and relative industry.

cognizant 20-20 insights | december 2015 freedom from regulatory restrictions. This has als from buying the right amount of insurance enabled businesses to use these messengers coverage or to save for retirement. Adding to for: this is the challenge of effectively engaging with customers and prospects through >>Organizational announcements. meaningful content. Consequently, insurers >> Product and process education. continuously seek ways to educate and engage >> Marketing and promotion. with customers that enable both easy dissemi- nation of content, as well as effortless con- Sales and distribution. >> sumption by the target audience. >>After-sales service and customer operations. • Ineffective distribution channels. With the >> Proactive and reactive customer service. emergence of new distribution channels, >>Customer engagement and awareness. insurers continuously struggle to: >>Take stock of their current distribution mix For example, companies in the following industries and assess the pain points against the pa- have used messaging apps for communications: rameters of adaptability and popularity. • In banking, financial services and insurance, >> Introduce new distribution channels to com- companies are using messengers for alerts pete with rapid technology advances and and reminders, marketing outreach and process modernization. engagement. Examples include three Kazakh banks — Kazkom, Bank Kassa Nova and Kaspi >>Create a cost-effective, efficient, widely net- Bank — that are using WhatsApp to manage worked distribution mix that is optimal for client engagement.8 both the sales force and customers. • In media and entertainment, businesses such These issues could be resolved by adopting mobile as BuzzFeed in China are using WeChat for messengers as an instrument of distribution. For content dissemination.9 one thing, the wide reach of mobile messengers • In retail, brands are using messengers for will ensure the distribution channel serves the promotions, sales, after-sales service and majority of people in any geography, as most engagement with high-net worth investors, mobile messengers work on both smartphones, including Harrods, Diesel, Cartier, etc.10 which are rapidly proliferating in developed and emerging economies, and traditional feature • In hospitality, organizations are engaging with phones. customers via messengers, including TripAdvi- sor and Marriott in China through WeChat.11 Additionally, the low-cost, non-intrusive nature • In shipping and logistics, businesses are using of instant messaging not only optimizes costs for messengers for shipment tracking, including insurers, but it also empowers customers. With SF Express in China.12 WeChat’s API, for example, businesses can build apps that run on its instant messaging platform, Why Insurers Should Embrace Mobile allowing them to customize functions according Messaging to their needs and perform specialized transac- tions, such as payment, image verification, etc. Instant mobile messengers can help insurers Insurers could also introduce features such as open a new channel of communication, reduce push notification with the help of stickers, icons operational costs and turnaround time, and and one-touch payment (as has already been discover new touchpoints to improve their mar- introduced by ). Some of the most easi- keting, sales and service. In this way, messengers ly-used stickers and icons include: can help insurers overcome challenges that have developed in the last few years, particularly in the • For customers: following areas: >>Contact me. • The need to educate and engage with >> Pay premium. customers and prospects. One reason for >> Send premium receipt. low or inadequate insurance adoption in both mature and emerging geographies is a lack of >>Change my address. financial education, which prevents individu- >>Change my phone number.

cognizant 20-20 insights 2 Mobile Messaging’s Sweet Spots • Inquiry, alerts and notifications • Renewals • Quick quote request • Account, fund and risk management • Policy data capture • Policy endorsements • Appraisals and risk • Download cards capture • Just-in-time information • Document/policy • Locate intermediary/ page management broker • Status inquiry Policy Services • Bill presentment & notifications • Billing inquiry Agency • Payments and payment status Management • Company, product Quote, New Business, • Receipt download and contact info Underwriting • Forms and brochure downloads Billing, Inquiry & • Product and service Reporting inquiries • Branch locator Claims & Maturity Marketing, Sales & Distribution

• Claims notification • Claims status and alerts • Emergency assistance • Repair shop locator • Just-in-time assistance

Figure 1 #2

• For agents: personal, structured customer support. The inher- ent non-voice, concise and synchronous nature Let’s talk/meet. >> of communication can help >> Please pay premium. insurers swiftly and effec- The inherent non- >>Your service request has been completed. tively address and redress voice, concise and queries and complaints. Lastly, mobile messengers can help insurers meet synchronous nature of growing consumer demand for better, more per- Representative Use mobile messengers sonalized service. Thanks to their experience in Cases can help insurers the digital world, consumers of insurance and One of the many advantag- swiftly and effectively financial services are increasingly attracted to es of mobile messengers providers that offer not only the best prices and is their ability to extend address and redress products but also the most convenient, custom- across almost all links of queries and complaints. ized and satisfying experience. With the advent of the insurance value chain. digital communication channels, customers now Their fast-evolving features, combined with have numerous avenues of contact and support; available functionalities such as video-calling, however, most of these still involve the need to location-sharing, file transfers and offline- chat manually record complaints or fill out surveys. ting, increase their potential for becoming key Further, because the data that is generated is tools for customers, insurance agents and finan- often unstructured, insurers cannot mine it effec- cial advisors. tively for actionable insights. Figure 1 highlights a few areas in which mobile Mobile messengers, on the other hand, can messengers could benefit customers, prospects be used by insurers as a very effective tool of and agents.

cognizant 20-20 insights 3 Product Announcements and Marketing Claims Handling • Challenge: Insurers spend a lot of money, time • Challenge: Claims management has frequently and effort annually on product announce- been cited as one of the most troublesome ments and marketing. Traditional methods and processes for insurers. Common issues include: channels, such as TV and radio, have not been >>Customers dread the claims initiation pro- overly effective for carriers seeking to be heard cess, which involves filling out numerous above the noise. (For more insight, read our documents on Web portals or apps. Claims white paper “Marketing Analytics a Smarter tracking is another area filled with prolonged Way for Auto and Home Insurers to Gain follow-ups and communication between the Competitive Advantage.”13) With the advent of customer and insurer. mobile telephony and SMS, and the meteoric Claims surveys, adjudication and processing rise of , the Internet is now a highly >> involve manual effort, complex workflows effective and inexpensive way to get messages and cross-departmental involvement, result- out regarding product marketing innovations, ing in high turnaround time. while making the entire exercise more fun and interactive. However, digital media also comes >>The lack of easily accessible information with a host of limitations, including: on emergency services prevents customers from getting the help they need in certain Capturing and holding the attention of pros- >> scenarios. pects and customers on disparate digital and social platforms. • How messengers can be used: >> Developing meaningful, reusable KPIs and >> Easier claims initiation via instantaneous measuring them. document upload and filling out of forms. Claims status tracking and further commu- Identifying the level of participation and in- >> nication between the insurer and customer terest of the target population. can be mediated by mobile messengers that >>Collecting and measuring feedback for cam- upload and download claims documents paigns. (such as forms and photographs) and enable • How messengers can be used: New-age mobile group calls between the adjudicator, survey- messengers are a perfect fit in these scenarios, or and customer, etc. as product announcements and marketing can >> Relaying findings by claims surveyors and be handled by insurers in the following ways: adjudicators (especially in the form of pho- >> Pushing engaging media (such as promo- tos and videos) from the website or app, tional videos, product posters and fliers) to which will help compress turnaround time. incite interest. >>Customer requests for roadside emergency >>Creating awareness or gathering feedback assistance and search for nearby service via surveys and short questionnaires rel- branches or cooperative repair shops. Using evant to individual product lines. GPS positioning, function location coordi- nates can be generated and shared through Organizing games and contests using the >> instant messengers to help locate the cus- various features of messengers; for example, tomer automatically. users can submit short video or audio clips based on a particular theme, or location- • Gaps that can be filled: based games can be designed. >>The adjustor receives all required and vali- • Gaps that can be filled: dated information on one claim form imme- diately after entry, reducing claim errors and Because messengers are ubiquitous, there is >> delays. no need to attract traffic to these platforms. The adjustor makes best use of available The personal nature of mobile messengers >> >> time and resources to improve claims pro- makes consuming audio or visual content cessing efficiency and client experience. more compelling. As noted above, the cap- tive nature of messengers will further en- >> Immediate availability of photos and loss/ courage engagement, interaction and feed- damage estimates reduces the possibility of back because users don’t need to dedicate misinformation or fraud. time to switching between media.

cognizant 20-20 insights 4 >>The loss payout department gets immediate >> Improved collaboration with managers, cashflow impact information for treasury or underwriters, risk managers and analysts. cash pool management. • Insurer: >>Turnaround time on claims can be reduced, >> Improved engagement with customers, par- leading to improved customer satisfaction. ticularly the digitally savvy Generation Y Asia Insurers Embrace demographic, which prefers non-intrusive methods of communication. Instant Messaging Substantial cost and time savings due to Insurers throughout Asia and elsewhere are >> self-service options reducing turnaround adopting mobile messengers for various applica- time and requiring less support staff. tions, including the following examples: Ability to drive customer awareness and re- Jubilee Insurance in Kenya recently launched >> • sponse. dedicated lines for WhatsApp use for customer communications.14 >>Customer empowerment through self- service, resulting in higher satisfaction and a China Pacific Insurance launched a WeChat • superior customer experience. service platform for both sales and customer service functions, and is the first insurer to Looming Challenges allow payments through WeChat’s payment service.15 Because mobile messengers are still emerging in the insurance industry, insurers can expect to • Ping An Auto Insurance in China provides claim encounter roadblocks, particularly the following: assessment functionality on WeChat.16 • Integration challenges. Integrating operations • CPIC Life in China launched a travel insurance and channels is one of the most important 17 product on the WeChat platform. challenges to overcome. Proper scoping, • Sunshine Insurance Company in China offers assessment, prioritization and change a crowdfunding insurance service called Love management exercises should be undertaken Upgrading on WeChat.18 to ensure successful adoption. • Wing Lung Bank in China launched a travel • Regulatory restrictions. Because of recent insurance product on WeChat.19 high-profile data leaks, as well as the industry’s inherent need to comply with cross-border Beijing-based Taikang Life Insurance provides • regulations, instant messaging will likely invite a health insurance product on WeChat.20 scrutiny from regulators that cover certain Instant Messaging’s Insurance Benefits transactions — such as the exchange of policy across the Value Chain and personal details, as well as access to con- fidential and critical documents over unen- Insurers that adopt instant messaging will realize crypted channels — as a source of unacceptable benefits throughout the ecosystem, including the business risk. following areas: • User adoption. With the plethora of sales, • Prospect/Customer: service and marketing channels already >> Synchronicity and 24x7 access to informa- available to insurers, it is unknown whether tion and service. instant messengers will drive additional customer and prospect traffic. Similarly, >>Quick, alternative channel of communica- because this is a direct channel with no tion and transaction. incentives for sales personnel, salesforce • Agent: adoption may also be a challenge. >> Up-to-date customer and sales support in- The success of messengers as an effective and formation, providing a better overview of efficient technology across the insurance value the customer’s needs and enhancing cross- chain will depend on whether these challenges are and upselling. overcome. While resolving data security issues is >>The ability to submit applications for as much a technology and process challenge as a straight-through processing and obtain real- regulatory concern, marketing, product engineer- time quotes, which improves productivity by ing and distribution challenges — in our view — are reducing administration time. just as important.

cognizant 20-20 insights 5 The Last Word ensure successful implementation and adoption. On a global scale, the insurance industry is buffeted • Analyze the current digital strategy to by a variety of business and technology forces, understand channel usage by different making it ripe for instant messaging adoption. customer segments to decide which services need to be provided by messengers. For life and retirement, this new channel • Assess available messengers, paying attention helps meet the challenges that cause under- • to the best choice for hosting apps on the and non-insurance, including a lack of financial messenger (e.g., Facebook Messenger) or understanding and product complexity. extending current services to a new channel. Demand for instantaneous, 24x7, hassle- • Set up security protocols to meet data security free customer service can be satisfied by • and other compliance needs. these “always-on” applications. Implement an organizational change Increased technology adoption by consumers • • management strategy, with attention to inte- across all demographics, and the gradual shift grating the new channel with current front- toward paperless, virtual experiences, paves and back-office processes. the way for the adoption of IM channels. • Establish KPIs to measure IM channel usage With the steady rise in importance and use of and gradually course-correct when needed. mobile messengers, insurers of all sizes, geog- raphies and lines of business will need to adopt messengers as a prominent channel for sales, service, education and engagement. We recom- mend carriers consider the following steps to

Footnotes 1 “2 Billion Consumers Worldwide to Get Smart(phones) by 2016,” eMarketer, Dec. 11, 2014, http://www. emarketer.com/Article/2-Billion-Consumers-Worldwide-Smartphones-by-2016/1011694. 2 “The Mobile Money Landscape: Market Statistics And Expert Views,” Monitise, Vol. 1, 2014, http://www. monitise.com/what-we-think/2014/06/25/important-mobile-engagement-2014/. 3 “Number of Monthly Active WhatsApp Users Worldwide, April 2013 to September 2015,” Statista, http:// www.statista.com/statistics/260819/number-of-monthly-active--users/. 4 “Number of Monthly Active WeChat Users, Second-Quarter 2010 to Third-Quarter 2015,” Statista, http:// www.statista.com/statistics/255778/number-of-active-wechat-messenger-accounts/. 5 “Number of Monthly Active Facebook Messenger Users, April 2014 to June 2015,” Statista, http://www. statista.com/statistics/417295/facebook-messenger-monthly-active-users/. 6 “Global Mobile Payment Transaction Volume, 2010 to 2017,” Statista, http://www.statista.com/ statistics/226530/mobile-payment-transaction-volume-forecast/. 7 Tony Danova, “Top Smartphone Trends in Major Mobile Markets around the World,” Business Insider, March 10, 2015, http://www.businessinsider.in/The-top-smartphone-trends-in-major-mobile-markets- around-the-world/articleshow/46521853.cms. 8 Mini Swamy, “What Is Up with Kazakhstan Bank Customer Engagement? WhatsApp Is Up,” Interactive Intelligence, May 30, 2014, http://callcenterinfo.tmcnet.com/Analysis/articles/380016-what-up-with- kazakhstan-bank-customer-engagement-whatsapp.htm. 9 Jon Russell, “Buzzfeed Jumps Aboard the Messaging App Train Starting with WeChat,” TechCrunch, Nov. 18, 2014, http://techcrunch.com/2014/11/18/buzzfeed-jumps-aboard-the-messaging-app-train-starting- with-wechat/. 10 Vijaya Rathore and Varuni Khosia, “Luxury Brands Like Cartier, Armani, Diesel and Others Use WhatsApp to Promote Products in India,” The Economic Times, Oct. 9, 2014, http://articles.economictimes.indiatimes. com/2014-10-09/news/54827542_1_whatsapp-reliance-brands-corneliani.

cognizant 20-20 insights 6 11 “Marriott International and TripAdvisor China Enhance Local Travel Experience for Chinese Travelers,” Marriott News Center, Dec. 10, 2014, http://news.marriott.com/2014/12/marriott-international-and-tripad- visor-china-enhance-local-travel-experience-for-chinese-travelers-v.html. 12 “Self-Service through WeChat,” SF Express, http://www.sf-express.com/hk/en/deliver/self-service_tools/ wechat/. 13 “Marketing Analytics a Smarter Way for Auto and Home Insurers to Gain Competitive Advantage,” Cognizant Technology Solutions, September 2013, http://www.cognizant.ch/InsightsWhitepapers/ Marketing-Analytics-A-Smarter-Way-for-Auto-and-Home-Insurers-to-Gain-Competitive-Advantage.pdf. 14 Sandra Chao, “Jubilee Adopts WhatsApp to Communicate with Clients,” Business Daily, April 23 2014, http://www.businessdailyafrica.com/Jubilee-adopts-WhatsApp-to-communicate-with- clients/-/1248928/2290590/-/w2pygl/-/index.html. 15 Carol Chen and Linda Xu, “China Pacific Insurance Goes Digital,” Huawei,http://www.huawei.com/en/ publications/winwin-magazine/23/china-pacific-insurance-goes-digital. 16 Sophie Loras, “China’s Ping An Leverages Social Data to Personalize Travel Insurance,” ClickZ, July 30, 2015, http://www.clickz.com/clickz/news/2419746/chinas-ping-an-personalizes-travel-insurance-with-uk- startup-bought-by-many. 17 Carol Chen and Linda Xu, “China Pacific Insurance Goes Digital,” Huawei, August http://www1.2015, huawei.com/en/static/HW-452019.pdf. 18 “Crowdfunded Insurance Schemes Prey on Friendships,” ECNS, April 18, 2014, http://www.ecns.cn/cns- /2014/04-18/110134.shtml. 19 “Summer Offer with Wing Lung Insurance via Online Application,” Wing Lung Bank, http://www.winglung- bank.com/wlb_corporate/en/about-us/promotional-events/travel-insurance-summer-promotion.html. 20 He Wei, “New Mobile Policy? WeChat Insurance App Rolls Out,” China Daily, Feb. 27, 2014,http://usa.china - daily.com.cn/business/2014-02/27/content_17310060.htm.

cognizant 20-20 insights 7 About the Authors Srinivasan Somasundaram is a Director within Cognizant Business Consulting‘s Insurance Practice. He has 18-plus years of experience in the life, annuity and pension sectors. Srini’s experience includes managing insurance operations, business consulting and product development, business transforma- tion program delivery, developing business propositions, GTM and large deal support. He has worked on projects in the UK, U.S., South Africa and APAC, with a focus on sales and distribution. Srini holds a post-graduate degree in management from Bharathithasan University. He can be reached at Srinivasan. [email protected] | http://in.linkedin.com/pub/srinivasan-somasundaram/0/a5a/156.

Aritro Bhattacharya is a Senior Consultant within Cognizant Business Consulting‘s Insurance Practice. He has eight-plus years of experience in the life, annuity and pension sectors, which include consulting and delivery management, insurance IT products evaluation, functional implementation and migration. He also has dabbled in social media consulting, digital distribution transformation, digital marketing and sales consulting, and digital innovation. Aritro holds a post-graduate in management from the Indian School of Business. He can be reached at [email protected] | https://www.linkedin. com/pub/aritro-bhattacharya/21/34b/629.

Vipesh Singla is a Business Analyst within Cognizant Business Consulting‘s Insurance Practice. He has four-plus years of experience in the life and annuity sectors and has worked for global insurers in North America, Europe and Asia Pacific across the entire insurance value chain, including product manage- ment, new business, policy administration, claims, billing and payments. Vipesh holds a post-graduate degree in management from the Indian Institute of Insurance. He can be reached at Vipesh.Singla@ cognizant.com | https://www.linkedin.com/pub/vipesh-singla-flmi-aapa-ara/15/303/93a.

About Cognizant Cognizant (NASDAQ: CTSH) is a leading provider of information technology, consulting, and business process out- sourcing services, dedicated to helping the world’s leading companies build stronger businesses. Headquartered in Teaneck, New Jersey (U.S.), Cognizant combines a passion for client satisfaction, technology innovation, deep industry and business process expertise, and a global, collaborative workforce that embodies the future of work. With over 100 development and delivery centers worldwide and approximately 219,300 employees as of September 30, 2015, Cognizant is a member of the NASDAQ-100, the S&P 500, the Forbes Global 2000, and the Fortune 500 and is ranked among the top performing and fastest growing companies in the world. Visit us online at www.cognizant.com or follow us on Twitter: Cognizant.

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