InsurTech Ohio Spotlight with Casey Kempton

Casey Kempton is Personal Lines President at Nationwide, a Fortune 100 company based in Columbus, Ohio and one of the largest and strongest diversified insurance and financial services organizations in the United States. Casey was interviewed by Daniel Kessler, Client Partner at Capgemini.

Casey, how does your background in cognitive anthropology help frame your perspective on the interactions of customers, carriers, and agents?

“I'll start with what cognitive anthropology is. Anthropology is the study of all people across all of time and space. It has various disciplines from cultural anthropology to archeology. Cognitive anthropology, like any other cognitive science, considers broadly the biological, neurological, psychological and cultural aspects of people and cultural norms. It's more quantitative in nature and endeavors to understand culture as it exists in our minds. This background has been helpful to me as a professional in general and as a leader in large organizations. It's added an element of understanding culture, cultural change and how we attach new possibilities to people's long-held belief systems to get them excited about changes in directions. It also helps me understand insureds’ and agents’ needs and behaviors that carriers can address more effectively.

For example, picture a triangle of value where insurance companies are manufacturing risk products for insureds. Risk products are generally in the form of a legal contract that the average policyholder isn't going to read nor appreciate every single word of. They tend to be lengthy, and that brings in the agent who, as their advisor, understands that contract very deeply and serves to translate, advise and help insurers understand what they're buying.

Trained in cognitive anthropology, I can recognize when there are various mental models about how insurance works and how processes, coverage, premiums and rate changes can be understood and experienced by consumers and agents. I've done a lot of work in business insurance where I’ve had opportunities to explore some of the myths about insurance to help better arm our agents with more information, insights and tools that assist them not just in the sales process, but through the whole policy life cycle.

I spend time thinking about those mental models and the opportunity it creates for us to better educate consumers and agents. A lot of that education is about the preparation and protection aspects of insurance, which is particularly salient in our environment right now for property insurance. With weather and climate trends being what they are today, they’re creating an additional strain to policyholders in a stressed economy where consumers are looking for any opportunity they can find to trim costs. In some cases, they may be underinsured or uninsured. Helping agents communicate the value of insurance as a risk-transfer mechanism in today's ever-changing world becomes even more important. We can be much more effective when we understand the perspective of a policyholder.”

What do you think customers would like to see improved in our industry?

“Being insured is generally valued in our society. It’s a mechanism that enables the financial wellbeing of individuals and businesses. The concept of risk transfer is also generally understood. The black box in our equation shows up in how premiums are assessed and calculated as well as product availability, risk selection, etc. Those aspects are squarely in the underwriting and pricing realm, which is not widely understood by insureds. Although carriers do the best that they can to bring forward the components of the policy, coverage and discounts received at the time of purchase and when there is a premium increase, the technical nature of these things is not broadly understood. This can generate confusion on the value exchanged for premium dollars and entice shopping frequency to find a lower price. Carriers and agents play a key role in helping customers understand what’s included (and what’s not included) in their policies and at the same time, customers should want to have that knowledge and understanding.

As a consumer, when I engage in a fully digital, app-driven environment, I can control a lot of aspects of my life. Insurance needs to meet that same standard, so there’s an opportunity there on the backend in terms of how the product functions and delivers a seamless experience for the customer, especially during the time of a claim. Experiencing a loss is an emotional time for any person or business. That emotion spans the full spectrum of degrees of negative emotion you can have about something. And often there's a moment of panic—not just because I've experienced a loss but because maybe at that moment I don't know if this is a covered loss.

An improvement in our industry comes when carriers coalesce around that moment of truth from all angles. That's something Nationwide does exceptionally well; other carriers do too. Carriers that come to recognize that in the long run—all the tools and technology around acquiring and servicing an insurance policy pale in comparison to the service delivery and how we lean into those emotional moments at the time of a claim—will create an advantage. This starts with how we communicate and create understanding about coverage, the premiums we charge and where policyholders can be more in control of their pricing.”

What are some of the technologies and innovations that you believe hold the most promise for delivering a better customer experience?

“One technology that continues to advance that I am optimistic about is usage-based insurance, and specifically telematics. These solutions give consumers more visibility and control over their insurance premiums as they are more based on actual driving behaviors and miles driven. They also provide drivers feedback with tips for behaviors to correct as well as positive behaviors, all aiming to reduce risk. Similarly, for property insurance, new technologies are always emerging that add sensing mechanisms and tracking to areas in the home that are more prone to cause damage or harm, all of which can be prevented or reduced. This is control that I think consumers will value more as data and insights infiltrate our day-to-day lives in many ways.

More broadly, it’s still unclear if there's a technology silver bullet that solves all our problems. It comes down to our network, the professional experiences that we have, the human element involved in understanding customers, being experts in risk and the experiences that we bring to work. Technology is only as good as the humans who are programming it in many ways.

If you do that well upfront, then it can absolutely augment how fast you can develop insights, but then it still is people who will make decisions about what we do with those insights. Part of the customer experience is visibility and stability around pricing, premiums and coverage. Technology will help us make faster decisions as the carrier and ideally augment speed-to-market of the capabilities we build. But, it isn't necessarily the answer from a consumer-experience perspective. I also don't think all insurance is going to move to a new platform or a new automated way of executing. There's been many forays into trying to fully digitize the end-to-end shopping experience. What I observe is that agents and advisors are just as important today as they always have been. Technology allows consumers to augment their agent experience to do a little more research on their own and take control where they prefer to do that.”

What's at stake if the promises of technology fail to deliver on the growth and efficiency gains that we're all hoping for?

“In general, there’s an expectation that all industries will be modernized, automated or even revamped in some ways from the new tools and artificial intelligence that's being introduced. It's new ground for all of us across many industries. We see automation tools driving more efficiency, but not every industry is being rewired by technology. Insurance is one of those industries that remains intensely people and relationship driven. That's always been an important part of how we transact business and build confidence and trust. I do not anticipate robots showing up to adjust claims. That’s a human moment, a human proposition. Whether that's happening on the doorstep of your business or through a call center, there’s still somebody behind that.

Carriers have the job to leverage technology to optimize our cost because taking costs out of the system and still delivering value and service enables us to put those unit cost savings back into pricing and/or investments into emerging risks and new innovations. We need to be able to focus effectively on evolving technology and emerging risk and the coverage needs that are appearing unexpectedly or anticipated. We need to be able to respond to those fluidly and nimbly. Carriers can move into that mode of operation when we have efficiency in our systems. I do not expect technology to replace human interaction in our industry en masse anytime soon.

I don't think people feel very emotionally about the insurance proposition, but they often do at a time of loss. That humanizes our industry in a way that many others don't necessarily have to solve for. Maybe they can double down on technology as the answer. We will use it as an enabler. We'll get better, faster, more efficient and more responsive with it. That ensures a benefit to policyholders and agents in a way that our industry hasn't fully tapped into. The promised land is how responsive we can be to customers’ latent and unmet needs from their insurance carrier, as well as their evolving needs as new technologies enter our lives. I believe it starts with education, transparency and elements of control for policyholders, all of which technology can support.”