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How can insurers offer a customer-first experience?

By Pete Ballard, Foolproof

Customer insight is identifying a growing need for insurers to deliver differentiated and value-adding customer experiences through emerging technology which offers newfound business efficiencies and the potential to determine the immediate future of insurance innovations.

The insurance industry is going through a period of change. Insurance customer satisfaction is continuing to fall, and the industry is now the fourth worst in the world for customer satisfaction.

Unfortunately for insurers, there are a number of contributing factors to this problem, and no ‘quick fix’.

Changing attitudes to consumerism means people own less so are insuring to lower levels on their contents, home, and car insurance — if at all. Additionally, subscription services are becoming more popular than owning certain items, with insurance often included in the fees.

For those who do still want to buy insurance, it’s not the easiest task. Though the industry has modernised, parts of it remain inaccessible and confusing, especially when it comes to technical wordings and policy statements. Our research with insurance customers reveals that — in an increasing number of cases — the wrong cover is often purchased. Additionally, most customers only uncover they have inadequate cover after a claim has been refused. As a result, the insurance field and its digital assets leave many customers dissatisfied with the lack of simplicity and transparency in the end-to-end insurance process.

To resolve this issue, insurers are implementing technology. By automating processes and decreasing running costs, insurers are lowering premiums to entice more customers to purchase insurance. However, this isn’t the case. Research by the Institute of Customer Service reveals that 60.4% of insurance customers are not prepared to compromise service in pursuit of the cheapest deal, and 27.2% are willing to pay a premium for better service.

We’ve worked with numerous insurance firms attempting to crack the issues facing the industry, working with both business leaders and customers to identify pain points and deliver a better experience. The resounding message is that insurers need to put their customers first when it comes to redesigning their offering, incorporating technology only where it adds value. Any considerations on price should be secondary to the customers’ needs. 

Everyone wants cheaper premiums, until they have to claim 

Our experience with insurance customers has shown us that attitudes to insurance fall into one of two groups. Customers who have never had to claim on their insurance may be enticed by a cheaper premium. However, those who have experienced the claims process value customer service foremost — regardless of cost. For example, customers who have had a claim refused as a result of a failure to fully understand complex policy wording, will especially know that cheapest is not always best.

When considering how insurers can improve their offerings, there’s no need to apply tech for tech’s sake. Though a cloud-based document option is a nice touch that allows customers to access their policies at any time, the solution could be much more simple in the form of clear and concise copy, coupled with visual design to aid understanding.

One of the biggest challenges faced by our insurance clients is a lack of ‘findability’. Despite advances in the e-commerce insurance marketplace, customers still face difficulty in finding the right insurance. Equally, a lack of a clear and concise breakdown of what your insurance covers — in an accessible and navigable format — is sadly common.

The ethos of US home insurance startup, Lemonade seems to be heading in the right direction. The company has clearly identified this problem and is committed to making insurance easier for its customers to digest:

Were here to pull back the curtain and explain in plain, transparent language the ins and outs of your standard homeowners insurance policy.

Our most important piece of advice to insurers is: provide clear information within well designed (e.g. responsive and intuitive) forms which incorporate mechanics to avoid errors and ensure the process is seamless and pain free.

Preventing loss before it happens

Another way insurers are improving their offering is by getting active in the area of predictive and preventative measures. These seek to help consumers avoid loss and inconvenience rather than redress the loss after the event. This is a proactive, rather than reactive, approach.

For example, health insurance firm Vitality provides their customers with discounted gym memberships and reduced premiums for those who track their fitness activity. Implementing preventative measures in this way allows Vitality to limit payouts and maintain healthy customer relationships. Even though this is mutually beneficial, the customer is at least considered and placed at the forefront of their services/plans.

Personalisation for the better

One of the best ways insurers can increase customer satisfaction is by making users feel valued through a personalised service.

There’s plenty of evidence showing that customers prefer services tailored to them. Research by Segment found that 40% of consumers say they will likely become repeat customers after a personalised shopping experience. Salesforce found that a further 57% of customers are willing to share personal data in order to receive a more tailored experience.

Our recent project with Simplyhealth to create an innovative new product designed to provide advice and support to ageing people and their carers, gave some interesting insight to offering a differentiated customer experience.

Simplyhealth’s Care for Life service is tailored to provide the right advice to the right individual — at the right time — to meet healthcare needs. The system uses artificial intelligence to understand where an individual has been, where they are now, and what they need to know next. The service’s content, copy, and design adapts to the needs of the user. The system facilitates this by seamlessly transitioning between elements of the user’s journey with the product, offering exponential value to ageing people and their families when they need it most.

Removing friction

If a customer is making a claim on their insurance, it always means something has gone wrong. This can be a difficult time, with emotions running high. Insurers can ease this difficulty and improve customer satisfaction by using technology to make the claims process as painless as possible. Of course, this requires a sensitive approach: even the most advanced AI claims system cannot replicate real human compassion.

Other projects we have worked on with insurers address the stress and anxiety that accompanies recording details from those involved in a road traffic incident. The systems created to tackle this challenge should integrate image capture with the application’s claims procedure — automatically populating the form fields with information. We have found that putting the user in control removes friction and simplifies the claims process.

Another client, the UK’s leading pet insurance provider, invested in creating a relationship with veterinary professionals and extends this to integration with their backend systems. Claims no longer have to be made by customers, as data is sent automatically, and the exchange is made on behalf of them by the insurer. This helps alleviate some of the distress for pet owners by delivering a frictionless experience at what will already be a difficult time.

Summing up

Emerging technologies can have a significant impact on insurance. When coupled with changing consumer attitudes towards ownership, providers need to respond fast to altered consumer expectations and improve customer satisfaction.

Insurers that will gain the most commercial real estate are those who start now by intelligently applying emerging technology to address customer experience issues. As such, you should work on forging stronger, more enriched, customer relationships which add long term value to your business.