Choosing an insurance company is one of the most important decision customers will make when it comes to protecting their families, properties and livelihoods, and offering a positive experience is arguably the most important part of attracting and retaining customers. However positive customer experience ratings worldwide declined at an alarming rate in the past year, according to the eighth-annual “World Insurance Report,” by Capgemini, a consulting, outsourcing and professional services company, and the European Financial Management Association. Despite efforts by insurers to meet the increasing demands of their customers, positive customer experience ratings dropped 3.7 percentage points to 28.9 percent in 2014 from an already low 32.6 percent in 2013.

Growing customer demands and falling positive customer experience levels aren’t the only challenges insurers are facing. Insurers also are confronting waves of disruptive changes, including big data analytics, an aging population, ongoing economic uncertainty and the growing frequency and severity of natural disasters, which threaten to challenge and undermine businesses. Complicating the issue is the increase of new competition from non-core insurance players against a backdrop of more stringent regulations.

Falling Short on Core Capabilities

With so many pressures, insurers must adopt a more customer-centric approach to remain competitive. However, the report found that insurers are falling short on core capabilities that can help them improve customer experiences and take advantage of opportunities created by disruptors.

Most insurers are connecting with customers at only a very basic level, according to the report. While many insurers offer services across a range of channels, the customer experience across these channels often is disjointed. Similarly, most insurers aren’t engaging with their customers regularly enough or personalizing content for different customer segments.

Insurers also are struggling to gain a complete view of their customer relationships. Most capture and store customer data, but many fail to capitalize on analytics to identify behaviors, preferences or a comprehensive, real-time view of their customers.

Many insurers are still in the early stages of fully monitoring their businesses, the report found. Ideally, measurements of customer, channel, and product profitability are tracked and available through real-time dashboards, providing decision-makers with up-to-date analytics that can be used to continually refine business activities. In reality, most performance measures used by insurers are financial in nature, and there is little tracking of customer and channel data to support business decisions.

Customer Centricity

To meet the growing demands of customers and improve customer experience levels, insurers must adopt a more customer-centric approach to every type of insurance activity. The use of analytics to assimilate customer data, view relationships as a whole, and deliver personalized products through appropriate channels will be essential to achieving customer centricity. Here are the seven key areas insurers need to focus on to succeed as a customer-oriented insurer of the future:

  • Price Competitively. A number of pricing practices can be refined through technology. For example, by incorporating and analyzing externally gathered data, such as health status, road conditions, or even social media connections, insurers can further personalize pricing, leading to greater customer satisfaction.
  • Connect Elegantly. Leading-edge practices include streamlining interactions across physical and digital channels and communication with various third parties. More sophisticated practices incorporate data from wearable technology, personal digital assistants or smart dashboards, in the home or car, that automatically transmit customer data related to risk factors.
  • Engage Regularly. Many insurers are offering high-quality, relevant content, such as car maintenance tips and goal-setting programs, and sharing it with customers through digital channels. They also support mobile technologies for simplifying transactions, data capture, payments and photo uploading. Insurers of the future can improve engagement by adopting always-on natural-language digital agents to support 24/7 communication.
  • Deliver Perfectly. Current leading practices involve a significant amount of automation and integration. Electronic channels are used to support transactions, and personal communication occurs seamlessly when needed. This will soon become standard and will be refined as customer expectations evolve. Enabling real-time straight-through-processing across multiple channels will be another benchmark insurers measure themselves against.
  • Measure Relentlessly. Insurers that excel in monitoring their businesses track and analyze measurements related to customer, channel, product profitability and financials in real-time. Increasingly sophisticated analytics will enable insurers to more accurately predict the outcomes of various events, leading to better risk measurement and improved profitability.
  • See Completely. Leading insurers have been able to attain a single comprehensive view of individual customers and their connections to family members, businesses and other entities. This tactic also applies to all channel partners, claims vendors, and third-party services. Retrieving data from social media activity and wearable technologies will enhance this capability even further.

Most insurers are struggling to transform their businesses into customer-centric entities. The ones?in the lead have succeeded in redesigning their firms around their customers. They are delivering value propositions that speak to customers and are achieving high rates of customer satisfaction, along with growing profitability. Most insurers, however, have neither fully developed a road map and business case for becoming a thoroughly customer-centric organization, nor have they allocated the resources to execute such a plan.
This blog entry has been reprinted with permission.

Readers are encouraged to respond using the “Add Your Comments” box below.

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.


Register or login for access to this item and much more

All Digital Insurance content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access