Customer experience in Insurance operations: The key to retaining customers?

With Insurance market conditions changing significantly, the rules of engagement with customers is also changing. And customer Service is increasingly emerging as one of the major differentiators in the insurance industry.

For instance, before the ongoing COVID-19 pandemic, a J.D. Power 2020 survey reported that 77% of auto insurance customers wanted to change their carrier, as a result of a trigger like bad service or premium rate change. And brand loyalty is even more at risk now – another J.D. Power pulse survey in April, when the ongoing pandemic was in full swing, showed that 52% of auto insurance customers wanted to lower their cost of insurance by either reducing coverage or changing carriers. With customer loyalty levels declining in the industry, insurers need to focus on meeting consumer demands at all stages of the customer journey and in all interactions. We are seeing that insurers are now rethinking their strategic goals priorities, aiming to improve the customer experience they offer.

How are insurers staying relevant to their customers?

1. Use of digital transformation Changing customer expectations and rising competition have been the key drivers influencing the insurance industry to adopt digital transformation. Insurers are simply optimizing existing processes by enhancing workflows or using digital tools to completely re-imagine existing business operations. These digital technologies improve operational efficiencies, optimize existing business processes through workflow improvements, and automate manual processes leveraging technologies like RPA, AI/ML, and help with better business insights through data management and analytics. Digital transformation can be an expensive and time consuming process that needs to be executed in a planned and phased manner. Though some insurers are building in-house capabilities by upgrading or replacing their legacy applications, a  much easier approach would be to partner with a third party vendor to help through with the complete transformation journey, without a need to invest too much upfront.
   
   
2. Increased usage of Data & Analytics Data analysis & Analytics seem to gaining strategic importance in the insurance industry, just like we see in other industries. In recent years, insurers have started harnessing data to achieve some of the following goals:
   
   
   • Improve customer experience through customer analytics. Understanding customer patterns using data analytics to help cross-sell and up-sell policies
   • Reduce claims handling time
   • Help drive better underwriting decisions
   • Reduce cost and eliminate risk
     
     
3. Omni-Channel Support and Communication An omnichannel customer support strategy is becoming important as customers and prospective customers are becoming more technically savvy and relying on multiple communication means. This is also critical for customer retention as customers are seeking immediate and quick solutions via a variety of channels and with a seamless transition among these channels. In response, insurers are widely adopting many different customer service strategies including self-service as well as omnichannel support through phone, live chat, email, etc.
   
   
   • Self-service swiftly catching up Having a well-built customer service portal enables consumers to find solutions to their problems, check the status of their policies and claims without having to wait for a response to their inquiries. Insurers have started strengthening their company websites, or developing channel specific portals, to enable customers find the relevant data that they are seeking and influence insurance buying decisions.
     
     
   • Omnichannel Customer Contact Services An omnichannel customer support capability, including a mix of voice and non-voice support channels like chat, email etc. has become a necessity to serve customers better. An omnichannel customer support solution helps to provide an integrated view of a consumers’ communication across the different channels and thus helps provide an engaging customer experience. It also avoids loss of information if customers switch communication channels with each interaction. Insurers are therefore moving towards providing omnichannel customer contact services, not only for customer retention but also for customer acquisition. Another trend that we see is that several consumers still prefer a human, person-to-person interaction, by speaking to an agent by phone. This may sound counterintuitive, but is certainly a need for complex transactions or for specific customer preferences.  So the voice channel, or call centers, will still continue to be a need in addition to digital channels.