Customer loyalty is not to be taken for granted, especially in today’s unpredictable climate. Insurers, more than anyone, know how much an unstable economy can rock the boat. Considering it’s an industry based on calculating risk, the insurance world shouldn’t be surprised at understanding the importance of customer experience. Customer acquisition through quick wins such as low introductory prices and referral bonuses are simple ways to garner some attraction. However, more effort needs to be made to retain these customers. Insurance customers are not known for their loyalty; and insurers, seeing the importance of repeat business, should be innovating more than ever.
Digital experiences don’t need to just benefit the customer
Although customer experience should be at the forefront of innovation, there’s no reason why the insurer shouldn’t innovate for more short-term benefits too. (of course, the overall reason for said innovation is to benefit the insurer). Here are two examples:
Telematics can be part of the customer’s digital experience as well as benefitting the insurer right away. The data collected by the insurer can solidify its business proposition and products. The intelligence provided by telematics can ensure the insurer is in touch with the market in real-time. Customers benefit from telematics through popular reward-based systems. Additionally, they can garner a better understanding of the impact of their driving.
As insurers increasingly wish to productise their offering to customers, recommendation engines are a good first step for this strategy. Recommendation engines benefit the customer by providing them with a more personalised online experience; as well as make them understand insurance a little better for what they need it for. This strategy can benefit insurers through, once again, valuable data insights.
Of course, the above two examples showcase how insurers in the P&C space, for example, can benefit. But it’s not as easy as it sounds to achieve.
Should insurers just start from scratch to elevate the customer experience?
Those who have outdated legacy systems that are no longer fit for purpose will be asking themselves this very (valid) question. It’s not easy to shoehorn in new technology when you’re just about coping with what you currently have. Additionally, you run into the problem of not having a well put together system that won’t be futureproofed for upgrades or further innovation.
The Greenfield way is definitely worth considering for insurers who don’t want to be limited by their existing technology and architecture. Speed to market as well as scalability are both big boons to have in a highly competitive space such as insurance.
However, Greenfield won’t be the answer for everyone, with testing and resource being several large challenges to overcome.
Which direction should insurers head in to increase the digital customer experience?
These days, it’s no longer about being mobile-friendly for the customer. Easy mobile access should just be a given for the customer experience, rather than an added benefit. Nowadays, insurers need to think about all digital platforms they need to integrate with. This of course means vehicles, but other digital items in the home (such as security systems). Awareness of IoT in the insurance space is increasing, however not enough insurers are acting on the opportunities presented. There are of course data concerns to consider (as there would be with telematics).
Example: If a customer’s house gets broken into, and the insurer can easily access the necessary information quickly through the customer’s security system within minutes of FNOL – the settlement (and the claim as a whole) can be dealt with superbly. A once-stressed customer can feel that their insurer is looking out for them.
More often than not, an excellent customer experience comes down to empathy and ease of use of the product/service. If insurers can achieve these two things; customer retention can look to increase.