Insurance companies are facing greater challenges in a market characterised by product saturation, soft pricing and competitive premiums. The rise of connected technologies and online comparison tools is also making it difficult for insurers to differentiate themselves.
As a result, insurance providers have to fundamentally change how they assess and manage risk. New strategies are needed to respond to these challenges.
Customer experience is the ultimate differentiator
At a time when products and price have become ubiquitous, and customers are more demanding than ever before, a major focus area for insurers is to push the quality of their customer interactions.
Gartner has predicted that 50 percent of consumer product investments will be redirected to customer experience innovation within the next two years. From a global perspective, the 2016 World Insurance Report from Capgemini and Efma has found that new gen tech-savvy customers are increasingly turning to social media platforms for their insurance needs.
The insurance industry in South Africa appears to be lagging. Providers abroad, however, are not falling behind in the same way, and are instead driving engagement through the innovative use of CEM (Customer Experience Management) technology. Clearly, the emphasis on proactive customer experience is integral to driving retention and growth.
Real-time is key
While insurers are known to gather and possess a wealth of data about their customers, from basic demographics and risk status, to asset, finance and insurance portfolios. It is time they start leveraging analytics and customer insights to gain market advantages. This means using customer experience feedback to proactively drive the direction of product and service improvement.
Obtaining insightful data is achievable through talking to or surveying customers in the moment. The key is to ensure that such interactions are relevant and personalised making use of the most relevant message, channel and timing.
By way of example, one of the longest standing short-term insurers in South Africa deployed Eyerys VoC (Voice of the Customer) survey software to obtain continuous real-time VoC feedback. They used the data to understand specific competency gaps in their call centre and were thus able to correct specific issues, instead of a blanket approach. This included customised training for their agents as well as empowering call centre agents with the data access to improve next step communication with clients.
The overall result was increasing the quality every customer interaction, time per call was reduced, improved first call resolution and which in turn shortened time spent holding for customers. The net effect was a 15% increase on their Net Promoter Score and an increase in the profitability of the call centre as a whole. The company has since incorporated this focused action based on VoC feedback in every area of the business where customer interaction exists.
Another large financial services company realised that although their agents were receiving good ratings, they were still haemorrhaging customers. Using continuous real-time feedback, they were able to identify that the discontent stemmed from interactions with specific service providers (i.e. the panel beaters, plumbers etc. attending to the insurance claim) These third parties’ poor service resulted in clients terminating their contracts after a claim was paid. A new process was implemented to ensure that their third party service providers improved their service delivery, ensuring an end-to-end experience that delivered great customer satisfaction. After a short period to embed the new process, there was a clear reduction in customer churn.
Real-time insight gives insurers the power to strategically acquire new customers, increase wallet share for existing customers, and improve customer satisfaction to retain customers over the long-term.
Being proactive is the way forward
The future capability of the insurance companies to retain and grow their customer base rests on their ability to provide a rich and consistent customer experience across all touch points. Insurers looking to achieve this should begin with these three simple but powerful steps:
- Invest in customer experience: A real-time VoC strategy which provides daily insight into what your customers are saying. Partnering with CEM experts to learn how to improve customer experience and realign internal processes. CEM must be a strategic driver across the entire organisation and its culture and not just a disconnected function on the side.
- Identify the customer journey: Use the customer journey to understand how customers engage and communicate. Ask them what their preferences are. Don’t rush off to build what you think is the ultimate customer experience until you have a clear map of these.
- Close the loop: Gathering data is not enough, you need to actively respond to customer feedback. Employ the best real-time analytical tools to get the right answers that will accurately and scientifically inform which opportunities can be leveraged to build customer loyalty and innovate new products. Thus improving the customer experience and building a competitive differentiator.
Ultimately, a proactive, technology-driven, VoC strategy will provide true customer engagement and unlock a competitive advantage for insurance providers.