WHY (AND HOW) INSURANCE FIRMS NEED TO TAKE A NEW APPROACH TO SERVICE

By Toan Huynh, vice president Cloud Sherpas

There’s a new breed of consumer, whose penchant for digital and mobile technologies and rising expectations of engagement are changing the world in which we live. While no industry is immune to these changes, their impact on the insurance space is perhaps one of the most far-reaching.

Who is the New Breed of Consumer?

I have news for you: I represent this new breed of consumer and so do you. Whether we realise it or not, we’re all affected by changes in technology. As digital and mobile continue to permeate our everyday lives, we’re starting to look at the world from a screen-first perspective.

A lot of the discussions around rising consumer expectations and the need for digital solutions focus on the Millennial generation, and with good reason. As Millennials come of age, they’re becoming a dominant force in the consumer market and these digital-natives expect everyone to use the technology they have grown up with.

But here’s the twist: these conversations should no longer be limited to Millennials, because the behaviours and expectations native to this group are quickly influencing other generations. For example, a 2013 survey on customer communication channels found that nearly 33% of online adults aged 68 and over in the US had used live chat for customer service and 20% had used screen sharing. Just think about how those numbers will continue to increase as these channels become more ubiquitous in our everyday lives.

How is Technology Changing Insurance Service Expectations?

Changing customer expectations, which are in large part fuelled by technology, extend to the entire customer experience – from the initial research and purchase process all the way through to any service requirements.

As Resource’s “Forecast 2015: The Executive Perspective” report on insurance industry trends finds, firms’ approach to customer service “requires a new mindset, because customer expectations have changed. ‘They no longer compare us to our traditional competitors,’ says one executive. ‘These days, their baseline is the best the Internet has to offer, so we may be compared to a credit card company, a cable provider, or even an online shopping vendor.’ In addition, says another executive, ‘In an interconnected, social-media-driven world, bad experiences and reviews can quickly escalate and have the potential for a greater ripple effect than ever before.’ Customer service and relationship building are vital to the success of insurance companies and the industry as a whole, according to the executives.”

Looking at customer service in particular, we can pinpoint two key areas of interest that can help firms deliver on these rising expectations: convenience and efficiency including channel options and length of the interaction; and the overall value of the relationship.

Convenient and Efficient Service is Important…

Today, we want to do things on our own terms. So if that means requesting support online at 10 PM rather than calling a service centre within the 9 to 5 PM business hours, we expect to be able to do so.

Similarly, given that time is one of the only things that we can never get back, it’s not surprising that everyone places a high value on it. As a result, we all consider the appeared value that companies place on our time an important factor in how we rate the customer service experience (a recent survey reveals that over 63% of US online adults agree with this statement).

All of this boils down to the need for convenient and efficient service. For insurers, this means providing multiple channels for engagement to suit varying customer preferences and focusing on the backend systems that help agents (or even customers engaging in self-service) to resolve any issues quickly and effectively.

…But Providing True Lifetime Value Reigns Supreme

Although making the service experience as convenient and efficient as possible can go a long way, to succeed in today’s changing environment insurers must also focus on the value they can deliver to customers during these engagements.

The key here is to understand that each time a customer reaches out for support is a new opportunity to create a more intimate relationship with them. In some cases, agents might not be able to resolve issues quickly (or at all on the first point of contact), and this makes customer sentiment the most important metric to consider. At the end of the day — resolution or not, fast or slow — the key is to have customers leaving the engagement with a positive feeling.

Furthermore, by pushing service conversations beyond single transactions, firms can build long-term relationships with customers. When done correctly these relationships can prove valuable, personalising the experience for customers and increasing retention and loyalty as a result.

Omni-channel is Critical

Toan Huynh
Toan Huynh

In order to power this modern service environment, insurers need to stop looking at service as a cost centre and start looking at it as a profit centre. Firms can achieve this goal (and improve convenience, efficiency and value along the way) by focusing on omni-channel service efforts.

The omni-channel line of thinking takes multi and cross-channel efforts one step further, working to truly bridge the gap in firms’ relationships with customers. While multi-channel provides different methods of engagement from which customers can choose, cross-channel links these channels together and provides firms with a single view of their customer. However, the true goal should be omni-channel, which not only provides firms with a single view of customers, but also allows them to make strategic decisions based on this information. Meanwhile, from a customer perspective, omni-channel gives policyholders an interactive experience with a cohesive brand, rather than a single channel experience within the brand.

Creating this type of omni-channel service experience can deliver three key benefits:

  1. Extending the firm’s brand
  2. Transforming the customer experience
  3. Increasing revenue

When insurers do omni-channel well and begin to reap these benefits, the rewards are truly fantastic. Although every industry is affected by these changes and can benefit from taking the omni-channel approach, the impact in the insurance space is particularly high given the current rise of market disruptors and the potential to build relationships that create truly life-long customers.

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