The Biggest Barrier to Successful Self-Service Inspections

The Biggest Barrier to Successful Self-Service Inspections

May 23, 2019/ 0 Comments / / by Jim Gardner

Self-Service Inspections reduce costs of inspections by 75% and turn around reports in 3 days.  The biggest barrier to achieving this, is your ability to engage the policyholder.  The main element which impacts engagement is WHEN the policyholder is invited to complete the inspection.  Invite at point of sale and get 80% engagement effortlessly.  Invite post bind and get 20% return plus the extra effort of phone calls, emails and plenty of back and forth.

Crunch Some Numbers

Let’s compare completing 1000 commercial Inspections with a self-service approach vs. traditional loss control.

A traditional inspection for a main street type commercial exposure is $120.  1000 inspections will cost $120,000.  The average turnaround time will be 30 days.

Self-service inspections would be $30 per inspection and total cost would be $24,000 at 80% completion rate.  Done at point of sale, the turnaround time is 3 days on average.

For self-service, the results decline to 20% success rate when the invitation is sent post-bind.

Summary

1000 @120/inspection = $120,000

80% @$30/inspection = $24,000 or 20% the cost of 1000 traditional inspections

20% @$30/inspection = $6,000 + cost of doing the traditional inspections on balance of policies

Inspecting at Point of Sale

Doing inspections at point of sale may seem counter intuitive as some of the policies may not end up being bound.  The ROI is still very positive, at 80% quote to bind, 200 inspections would be completed on policies that did not bind, at a cost of $6,000.

The easy math is that looking at 80% of the book via self-service has a cost of $24,000.  Add in the cost of inspecting policies you do not bind and your total inspection cost of $30,000 compared to $120.000 for a traditional inspection approach.  Depending on your average cost of claim, preventing just 3 to 4 claims will pay for the inspection program.

Adding in a Value Proposition

To engage the policyholder and the agent in the self-service proposition they need to perceive they are receiving value for their effort.

What is the value proposition for them?

Value Add for Policyholder

A digital experience

The consumer expects at a minimum, a digital choice for interaction.  The policyholder of today wants to be involved in building out their risk management experience.  A natural place is the inspection.  When given a choice, we only see 20% of policyholders who will opt out of doing a self-service inspection. 

Reducing friction

A traditional inspection is a nuisance at best.  At worst, it can harm the agent-policyholder relationship.  The policyholder appreciates the option to complete it themselves and not have a stranger on their premises and the hassle of yet another appointment.

Earn a credit/discount

An Amazon or Starbucks gift card is sometimes all that is needed to put a smile on your policyholder’s face in return for engagement on the inspection. 

The related approach is to charge the policyholder for the traditional inspection but also give them a gift card if they complete the inspection themselves.  This is a paradigm-busting approach, but it makes sense: charge for the cost of the inspection but give an option to receive something if you do it yourself.  Be creative!

Connection to agent

I do not think that consumers want to avoid interactions with their agents.  My experience is that they want a tangible value delivered by their agent if they choose to interact.  The self-service inspection connects the agent more solidly to the person and the property…but does not require a time-consuming site visit.

Personalized Report

Zillow and Realtor.com are great examples of real estate as entertainment.  I know I enjoy web surfing anything about my house and seeing what data is out there.  Rather than sending out a “bad news” recommendation report, why not send out an overview of the property that would be a quality, personalized and branded deliverable from the agent to the policyholder?

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Value Add for the Agent

New engagement channel

By taking ownership of the inspection process, the agent adds on a new touch point to the life cycle of the insurance policy.  Whether the policyholder does a self-service inspection, or the agent performs the inspection themselves, it moves from a separate interaction conducted by a third-party provider to a value-add service from the agency. 

Agency Differentiator

Agents are under pressure to differentiate themselves as they compete with direct channels, deal with competitors’ larger marketing resources and how to find ways to stand out in their market.  The risk advisement that comes from evaluating or completing an inspection of a client’s property leads to a consultative service which is not readily available and can be a competitive advantage.

Deeper knowledge of risk

Through the inspection process there typically evolves a better understanding of the risk.  The inspection process reviews how many buildings there actually are, what services are provided (not just listed on the website) and confirms operations that may or may not have been described during the application process.  Familiarity is a cornerstone of building long lasting sales relationships.

Upsell/Cross sell

Inspections should be leveraged for more sales opportunities.  An inspection can be utilized to mine for additional premium with the current policy to identifying other lines of business which should be offered to the client.

Communicating Negative News Early

Especially when self-service or agent completed inspections are done at the point of sale, the agent becomes aware of negative property or insurability issues early on.  With this early knowledge, the agent can be proactive and expediently assist the policyholder in needed changes. 

When negative issues are exposed at day 40, both the underwriter and the agent must jump into crisis management mode and typically deliver bad news to the client.  Not fun!

Conclusion

Self-service inspections are a fresh approach to loss control which require a set of workflows and timings to make them most effective.  With the policyholder completing their own inspections at point of sale, the benefits, both tangible and intangible, are considerable.

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