Insurers and Their Struggle to Appease Web Customers

In my last post, we talked about the challenges of online e-commerce that are often brought to light during the annual Cyber Monday conflagration that recently passed. Of course, it was acknowledged that Cyber Monday itself isn't something that insurance companies need to worry as much about.

However, here's a bit of news that gives one pause for thought: insurance companies' sites rank near the bottom of the list in terms of online shopping simplicity.

Global strategic branding firm Siegel+Gale just issued its second annual Global Brand Simplicity Index, based on a survey of more than 6,000 consumers across seven countries to uncover perceived points of complexity and simplicity in people's lives.

Within the online retail industry, Amazon, Zappos and iTunes are among the leaders in providing customers with simple interactions and experiences online. Consumers benefit from easy price comparison, free shipping and a streamlined selection process funneled through customized communications.

On the opposite end of the spectrum, however, general insurance and health insurance are considered the most complex by U.S. consumers. Healthcare is at the very bottom of the Simplicity Index, with respondents seeing little difference between one carrier and another and citing challenges to understanding which services and treatments are covered by insurance. Issues cited as confusing and problematic were “convoluted policy statements” and overarching holding companies that put their names “on a dizzying array of insurance companies cobbled together through acquisitions and mergers.” Ouch.

As the Siegel+Gale report describes it, “in the U.S., every single touchpoint—from quotes and online queries to policy documents—were rated as complex and filing a claim was considered nightmarishly so everywhere but Germany. Insurers were generally successful in providing quotes and bills that people could understand, but failed to make a policy change or answering a specific question a simple matter.”

Touchpoints rated as too complex include the following:

1. Understanding policy documents

2. Understanding the payment of a claim (coverage, deductible)

3. Selecting the right coverage for my needs

4. Making a change to my policy

5. Finding an answer to a specific question online

Companies could even make more money by simplifying their interfaces, the report states. “Across all industries, U.S. consumers are willing to pay between 2.4 and 5.3 percent more—a Simplicity Premium—for brands they believe offer the greatest degree of simplicity. U.S. businesses could also benefit from the power of simplicity, as they are leaving more than $20.1 billion on the table by not providing simpler interactions and experiences. The health insurance industry stands to capture the most in lost revenues, more than $4.3 billion.”

The report does hold out hope for progress, though, noting that insurance companies appear to be ramping up their technology investments in 2012 to better facilitate consumer interactions.

But there's a lot of work to be done.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

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