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How can insurers maximize customer experience

By Mia Papanicolaou, COO, Striata

With waves of digitally-led disruptors entering the market, the need for traditional insurers to improve their customer experience (CX) is greater than ever. Without the burden of legacy systems, new players can build customer-centric products and services from the start, attracting customers who’ve grown accustomed to getting everything they need through digital channels.

Most legacy insurers, however, have struggled when it comes to improving CX. In fact, 2018 research from Forrester showed that the customer experience health insurers provide is ranked the lowest the research firm tracks, coming 15th out of the 19 categories. Insurers in other segments (including auto and life) also showed clear space for improvement.

One of the most effective ways insurers can improve CX is by utilizing technology and the available data to enhance their customer communications.

The benefits of communication 

Mia Papanicolaou
Mia Papanicolaou

The link between communication and customer experience should be obvious. So much of CX is about the relationship between a company and its customers and it’s impossible to build a relationship in silence. That’s especially true in a world where 73% of customers expect companies to understand their needs and expectations. It should hardly be surprising then that 95% of customers are looking for some degree of proactive communication from the companies with which they do business.

And yet, most insurers traditionally fail to speak to their customers in any meaningful way.

Stats show that more than 90% of insurers worldwide do not communicate with their customers even once a year and that 20 to 40% of their customer base will not receive a single communication all year.

Technology and data 

There’s no reason this should be the case. Insurers have much larger amounts of data on their customers than most other industries. Leveraged effectively and combined with the right technology, insurers can use this data to deliver hyper-personalized communication that is timely, relevant and useful.

Using artificial intelligence (AI) and machine learning (ML), for example, it’s possible to sift through the data and provide individual customers with offers for the products most relevant to them. These technologies will also allow customers to customize coverage for specific items and events (known as on-demand insurance).

Using geographic data, meanwhile, insurers can provide users with proactive communication around things such as extreme weather conditions. While simple text messages will always play a role in this regard, insurers can enhance their communications on other digital channels using visuals to show ways in which to prepare for the event and limit the damage.

In both scenarios, customers are likely to have a better experience with their insurer. With customized offers, people feel understood as individuals and that they’re getting a good service. Furthermore, personalized alerts make it less likely that they’ll have to submit a claim. As a result, they’re less likely to shop around and switch insurers, even if it’s easier to do so than it ever has been before.

It’s important to note, however, that insurers should always be conscious of customer wants and needs when it comes to using technologically-enhanced communications.

Moreover, the insurer needs to ensure that its customer communications don’t veer towards being over-familiar. Any user-specific behavioral communication (around driving habits or exercise, for instance), should be strictly opt-in and well within ethical norms.

Standing out from the crowd 

The insurance space is far larger than it once was and customer loyalty is no longer a given. With a slew of new, digital-first players entering the market, traditional insurers simply cannot afford to take a business-as-usual approach. They need to ensure that the experience they provide their customers is as good as, if not better than those same customers enjoy in every other facet of their lives.

One of the most effective ways of doing so is by embracing technology to enhance customer communication. And while some new technologies may seem like a gamble to traditionally-minded decision-makers, doing nothing represents a much bigger risk.