Filed Under:Agent Broker, Agency Management

Digital transformation can help insurers keep customers loyal

An unhappy policyholder is likely to turn into a former policyholder. (Photo: iStock)
An unhappy policyholder is likely to turn into a former policyholder. (Photo: iStock)

Insurers are not keeping up with consumer expectations — and their customers are not sticking around long enough to give them the opportunity to prove otherwise.

We in the insurance industry have read the abysmal rankings in customer experience satisfaction scores and know that customer loyalty is at an all-time low.

Customer churn because of declining loyalty and poor customer experiences represents as much as $470 billion in Life and Property & Casualty premiums globally. This is according to Accenture’s 2015 Global Consumer Pulse Research, which analyzed responses from more than 13,000 P&C and Life insurance customers in 33 countries.

Other notable findings indicated that only 29% of insurance customers are satisfied with their current provider and that fewer than one in six respondents (16%) said that they would definitely buy more products from their current insurance provider.

What are insurance customers looking for?

Like most industries today, a good digital experience is appreciated by insurance customers.

In the Accenture report, consumers rated digital and cross-channel engagement as being very important and an area in which they seek improvement from insurers. Nearly half (47%) of the survey’s respondents said they want more online interactions with their insurers. In the past six months, half (49%) of P&C consumers purchased a policy online and 41% used a mobile device to make the purchase. Although many consumers are purchasing insurance products online, only 15% said they are satisfied with their insurers’ digital experience.

Digital transformation leads to premium growth

With such a heavy emphasis on digital, it’s not surprising that those insurers who lead in digital channel strategies also lead in premium growth.

The J.D. Power 2016 U.S. Insurance Shopping Study, which focuses on auto insurance, measures purchase behavior and purchase experience satisfaction. According to SNL Financial, direct premiums written in the personal lines auto insurance market in the United States increased by approximately 4.7% to $199 billion in 2015, with much of that growth coming from new business generated by direct writers who have invested heavily in digital channels.

While many consumers head online to research insurance products and obtain quotes from an insurer website, only a fraction actually complete the purchase online. The preferred channels for closing a purchase are through direct contact with an agent or through a phone representative.

The J.D. Power study shows that an overwhelming 74% of shoppers use insurer websites or aggregators for obtaining a quote and researching information, however only 25% actually purchase their policy online, with 50% using an agent and 22% via a phone center.

Integrate channels for a seamless experience

Insurers are picking up the pace and using multiple channels to target consumers.

E-mail, social, websites, mobile, phone and direct mail are all popular methods for customer and prospect outreach. Although insurers are engaging through a variety of channels, the missing link is the enablement of seamless movements between each channel.

As consumers use different channels at different points in the purchase process, the ability to move easily and effortlessly from channel to channel, or even from device to device, is vital for a positive experience.

An integrated channel strategy is easier to achieve with the advancement of more-sophisticated technologies and analytics. Knowledge of who the consumer is at an individual basis can now occur in real time at the moment of engagement. As is often the case, data is fragmented across many systems —obscuring customer behavior. Through the use of cloud-based marketing platforms, data, technology and analytics can be brought together to create holistic and unified marketing insights and right time messaging wherever and whenever a customer or prospect decides to engage.

Optimize claims processes

One of the biggest factors affecting customer churn is the claims process.

Customers will quickly change carriers if they experience a poorly handled claim process.

According to a Forrester study, more than 30% of customers who endured a bad claims experience switched insurers within a year of the incident. And claims are costly because of increasing inefficiencies and increased customer churn as a result of poor customer experiences.

By sharing data across systems and channels, the claims process can be optimized to reduce inefficient operations, data duplications and customer frustrations. Providing online tools and resources to support a better claims workflow also benefits customers who are already dealing with a stressful event. Ultimately, improving the claims system will empower insurers to deliver highly positive and enriched customer experiences.

Improving the customer experience can go a long way toward improvements in policyholder retention, identification of cross and up-sell, ability to achieve higher premiums, and an increase in brand loyalty and customer advocacy.

Related: 4 digital strategies to reach Auto insurance shoppers

Jim Kaiser is vice president of data solutions for Wesley Chapel, Fla.-based data marketing company DataMentors.

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