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Insurers today face significant challenges to achieve consistent and profitable growth. Foremost among these is gaining the ability to meet the increasingly demanding expectations of today’s insurance customer. Accustomed to the personalized and responsive service delivered by digital native brands like Amazon and Uber, insurance customers now expect efficient and personalized experiences from insurers—and their specific expectations continue to raise the bar.
The accelerating change in customer expectations, and the stakes involved, was noted in a global survey conducted by Bain & Company, “Customer Behavior and Loyalty in Insurance, Global Edition 2018, Customers Know What They Want, are Insurers Listening.” The survey highlights the ever-increasing role that digital is playing for customers in insurance, revealing that the number of digitally active customers has increased more than 60 percent in the last four years, with mobile channel adoption increasing approximately 70 percent in the last year alone.
While not surprising, the increasingly digital inclinations of insurance customers, as well as the continued desire by customers for seamless, omnichannel customer experiences, means that insurers must up their game and become more nimble in delivering exceptional service to prospects and policyholders. Unfortunately, while insurance customers continue to rapidly adopt digital channels, many insurers lag in their response to the demand. The Bain report, like numerous other industry surveys, shows that the vast majority of insurers are, in fact, “failing to deliver delightful digital experiences.”
For insurers, the practical implications for becoming customer-centric are significant. Those insurers who have succeeded in delivering fast, efficient, and “hassle-free” service are seeing higher customer loyalty and referral as reflected by Net Promoter Scores (NPS) according to the report. Other cross-industry customer experience findings echo this result. The Aberdeen Group recently noted that across industries, companies with the strongest omnichannel customer engagement strategies retain an average of 89 percent of their customers, compared to 33 percent for companies with weak omnichannel strategies.
From ‘Inside-Out’ to ‘Outside-In’
While a few first-mover insurers are seizing the promise of digitization and using it to win new customers and forge tighter bonds with existing customers, many insurers are being left behind. In addition, insurers are facing the challenge of new digital-native InsurTech entrants. These digital-first upstarts are seizing the opportunity to deliver customer experiences that not only meet customer expectations but exceed them. Leading InsurTech brands are effectively addressing the new customer expectations with digital service that starts with the customer in mind.
To address the challenge of higher customer expectations and drive a virtuous cycle of improved customer loyalty and referral, insurers would do well to adopt the approach of insurance leaders and digital native brands. Fundamentally, insurers must shift their IT mindset from a technology-first, “inside-out” approach to one that begins with customer needs in mind, provides digital and omnichannel access, and is fundamentally “outside-in.” Those insurers that succeed in delivering “delightful digital experiences” stand to reap the rewards of increased customer loyalty and profitability.