Insurers cite improving communication quality as top driver
The report also reveals expectations for a high-level insurance customer experience are not being set by the insurance industry, but by policyholders’ experiences with consumer brands like Google, Amazon and Apple. This phenomenon means insurance carriers are recognizing the need for “excellent interactions” with both agents and policyholders, and low quality experiences during the sales or claims process can “quickly erode customer acquisition and retention.”
While 80 percent of respondents consider both the agent and policyholders as their clientele, most lean toward the agent as their primary customer with only a relatively recent interest in policyholder retention as a key reason to improve those interactions. Coupled with this, 70 percent of insurers cite improved communication quality as a key driver for improving the customer experience for both groups of customers. Additional key drivers for customer experience improvement were reduced operating and support costs (60 percent) and increased customer retention (60 percent).
Reducing operating and support costs makes self-service a critical area for an insurer’s customer experience strategy. Yet for self-service transactional capability, research results show that its importance rates high at a 4.25/5.0, but actual insurer capability is among the weakest, ranking only a 2.5/5.0. The core capability that ranked highest in terms of importance is consistency of user experience at 4.5/5.0, but it too ranks poorly in capability at only 3.4/5.0.
For multichannel customer communications, insurers consider capability in the paper channel to be good, but agree that improvements to all other channels would be valuable. While most carriers have started implementing mobile initiatives, few are addressing other emerging channels (mobile, social media and online video). Only 40 percent of those with a mobile strategy have integrated it into internal customer communications systems. According to the Novarica report, “Insurers need to consider emerging channels in order to prepare flexible systems that provide communication options to customers.”
It goes on to say that insurers will face increasing pressure to provide an overall experience that is consistent, which underscores the need for modernization of legacy systems and elimination of data silos.
Strategizing and managing the customer experience is another challenge for insurers. The report shows that most have an ad hoc approach to the customer experience, with shared ownership among multiple business functions and IT. Novarica’s analysis shows that governance will increase in importance in order to “maintain a consistent focus when prioritizing and funding technology initiatives to meet customer experience objectives.”
Steve Francis, president and general manager, GMC Software Technology, North America, says, “Insurers face enormous challenges like low net promoter scores industry-wide; new channels that add costs to all departments; compliance burdens that increase with each new channel and regulatory mandates that demand aggressive speed to market. However, customers simply don’t care about internal obstacles. They demand information over the channel they prefer, seek clarity and want a consistent customer experience. Insurers need to adopt customer communication strategies that meet both internal requirements for cost-effectiveness and speed, while policyholders get the top-notch customer experience they have come to expect from companies they touch.”
Download the Novarica Research Partners Program report, underwritten by GMC Software Technology, “Insurer Plans for Customer Experience Improvement,” here.