Customer Experience

Insurance customer engagement in a digital world

Five key areas for insurers to tackle as they recognise the need to increase customer interaction, engagement and experience to stay competitive.

by Adrian Clamp (contact)
6 minute read

In a connected age where the quality of the customer experience has become increasingly important across sectors, insurers face a challenge.

Insurance has long been an industry in which it is difficult to sustain customer engagement outside a claim or renewal. It is traditionally a transactional and commoditised industry in which customer relationships are not deep and contact is limited.

But this must change, as insurers themselves are acutely aware. Firstly, it is clear that other sectors have been developing greater customer interaction and engagement through digital channels – banks and retailers, for example, have become strong at including tools and personalised information on their apps that drive the customer to engage with them more frequently online. Consumers are starting to expect it.

Secondly, the large traditional insurers face increasing competition on several fronts. Insurtechs are springing up on every side, thin-slicing the market and developing agile propositions around micro-events. Beyond that, retail behemoths such as Amazon could easily begin to bundle insurance into their offerings. In addition, insurers are seeing increasing competition from non-traditional competitors entering insurance as an adjacent market – think Tesla and car insurance, for example.

The good news is that insurers are up for the challenge. KPMG International’s 2017 CEO survey, for example, found that, amongst over 100 insurance CEOs surveyed, 81% believe they are already actively disrupting the sector and 61% see technological disruption as an opportunity rather than a threat.

So, what can insurers do to up their game and drive the greater customer engagement that they so badly need to achieve?

Here are five key areas that we believe are critical.

1. Do the basics well

It’s about ensuring that insurers are easy to do business with and the value of every contact with the customer is maximised. For example, at renewal ensuring that any changes in cost are clearly articulated and fully explained. Insurers can’t afford to waste contact opportunities with the customer coming away dissatisfied.

2. Get predictive

An area in which insurers can really improve engagement is by taking a proactive and predictive approach – such as around weather events. A home insurer that proactively contacts its customers who live in a postcode where there have been high winds or flooding is only going to improve the way it is perceived.

3. More than just insurance

The future of insurance may not be insurance – it could be a part of something else. Insurers need to look at ways of involving themselves in the online ecosystems that are proliferating across different aspects of customers’ lives. So for example, online health communities such as Vitality or propositions around developing smart homes, where insurance can be wrapped in. Insurers need to explore partnership opportunities to extend their offerings and become relevant to customers’ lifestyle choices in packaged services that help with the prevention or mitigation of risk. 

Insurers also need to look at broadening their offerings to maximise their relevance. So for example, with critical illness or life insurance, rather than just pay out when there is a claim, they need to be looking at whether they can offer other services such as helping the customer with all the other things that need doing at a time of maximum stress: registering a death, contacting the authorities that need to be contacted, offering guidance on organising financial affairs. There’s an opportunity to take a more caring and proactive role.

4. Data mining and AI

For any of these changes to happen, it is an absolute pre-requisite to be able to capture and analyse all the customer data generated. Every channel needs embedded AI engines behind them so that information can be gathered and mined in order to develop more personalised propositions. We have three golden principles here. Insurers must be:

  • Insight led - developing services and innovations that spring from the insights they have gathered from customer interactions
  • Experience-centric - everything must be designed around the actual customer experience and from the customer's point of view: not as easy as it sounds for insurers who are often having to fit their processes around the legacy systems that have built up over many years
  • Digitally transformed - integrating AI and digital technology into their way of working.

5. Change the operating model

However, digital transformation is not just a matter of integrating new tech: the way the business is set up must be transformed too. Everything needs to become customer-centric. The days of contact centres being organised around products are gone. It needs to be about customer segments and life stages, with multi-skilled operators who can resolve as much as possible in one contact, without hand-offs. With much admin work now automated, insurers need to be looking at whether this presents an opportunity to bring work back onshore and shift their customer contact focus from ‘product’ to ‘event’.

It’s a major challenge for many insurers to truly increase customer engagement. But it’s something that they need to tackle as an urgent priority, if they are not to be pushed aside by new digitally smarter competitors.

Article original published in The Digital Insurer - Customer engagement in a digital world.

For more information on this subject, you can also watch the webinar "Customer engagement in a connected world" where Adrian is on the panel which discusses how digital customer engagement can deliver on the expectation of superior customer experience. 

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