When you think about it, insurers typically have very low numbers of touchpoints with their customers. They often only interact with them at two points in the customer journey, purchase and claims. Given that the claims process is already a stressful time for the customer, that means that insurance companies need to meet a very high standard of customer experience and are given very little opportunity to prove their worth.

For their part, consumers unable to discover any other differentiators for insurance products are using price as their guide. Online aggregators help them to find the best price for most types of insurance. But this new distribution model for insurers is forcing them to compete on price alone, driving an unsustainable race to the bottom.

The inside view

Speaking at the Global Insurtech Summit in London, Stephanie Smith, chief operating officer of Allianz, pointed out the problem with shopping for cheap deals online.

“The frustration for us is that insurance is not just about price, it’s about the service that you receive. Aggregation sites drive people to the cheapest product and not necessarily to the right product for their needs,” she said.

At the point-of-sale, customers are concerned with the ease of getting a policy and promises of a quick resolution to any claim.

“The digital economy demands a quote in two minutes, a policy in 30 minutes and claims resolution in just 60 minutes,” said Vivek Jetley, executive VP and business head of analytics at EXL Services, in a separate presentation.

“You need to have something that cuts through the clutter. When someone buys insurance today, they’re not necessarily comparing insurance company A to insurance company B and they’re certainly not thinking about it in terms of the “insurance” buying experience. They’re comparing it with other consumer experiences – buying something on Amazon for example.”

Changing the customer experience

If you never really engage with your customers throughout their contract, there’s no opportunity to build a trusted relationship. This erodes any potential for creating brand loyalty. The answer for most insurers is to increase the touchpoints by expanding product sets and building up products and services around their core insurance offering. For some, it’s also about connecting with customers through technology, such as black boxes for car insurance and fitness wearables for healthcare insurance.

In Deloitte’s survey of insurers in the EMEA region[1], 62% said they believed that consumers regard non-insurance products as the most important factor when choosing an insurer. Insurance is pivoting from mere protection to prevention.

For example, allowing customers to take steps to improve their fitness and health, tracked by a wearable, in return for lower premiums can improve customer experience and save both customer and insurer from the dreaded claims process. Text or WhatsApp message updates on inclement weather might work in the P&C market and offering cybersecurity managed services alongside a cyber risk contract is also the type of expansion of services that insurance firms are exploring. In a crisis like the coronavirus pandemic, insurers should stay in regular contact with individuals and businesses about their payments and about how potential claims might work. Compassionate and proactive communication will be hugely appreciated by customers, even if the information that has to be delivered is not always good news.

Content and conversation

The key in all this customer experience change is connecting with people. And if you’re going to talk to your customers more, you have to know how to talk to them. The same Deloitte survey found that 57% of insurers believe that the way to build customer loyalty is with access to friendly and knowledgeable staff for assistance. It’s no leap to realise that the content resources on a website, the interactive contact through email and social media and the brand proposition all need to reflect an open dialogue and easily understandable key information to drive engagement.

The 2019 Eptica Insurance Digital CX Study[2] found that this area of customer experience is lacking. Insurance brands only provided answers to 46% of all routine questions on digital channels and they’re also focusing on the wrong places. While only 8% of consumers named Facebook as their first or second choice of channel for information, insurers answered 65% of queries there. Nearly half of consumers rank email as their primary or secondary channel, but only 20% of email questions were answered.

While the customer experience revolution is a huge challenge for insurers, it’s also an opportunity to evolve into the sort of full-service provider that customers can build a real relationship with. But to do this successfully, marketing has to evolve too.

Cyber insurance should come with thought leadership on the latest threats and solutions. Home insurance should include push notifications on local crime and content discussing the pros and cons of smart homes. Insurers need to concentrate their marketing efforts on informing customers about the experience they offer and making sure that the content they’re looking for is readily available. The aim of insurance is protection and security and making sure customers have the data they need to feel that protection is paramount.

[1] A demanding future: The four trends that define insurance in 2020, Deloitte, 2019

[2] Eptica Insurance Digital CX Study, Eptica, 2019