From Price to Loyalty: Shifting Insurance Customer Perceptions 

Insurers are not doing a terrible job at customer experience, but they need to consider more proactive, personalized, and technology-driven approaches to remain competitive in an impulsive market.

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The insurance industry is unique in that it does not sell a physical product, but rather the promise of a service the customer may use in the future. As a result, the level of trust a customer must put into the hands of an insurer needs to be that much higher, while for insurance providers, the ability to deliver a superior customer experience becomes even more critical.

Customers may express satisfaction with their insurers, but that does not always equate to loyalty. In the end, price often wins out when first selecting an insurer. As with any industry, insurance providers must strive to refocus their approach to customer engagement. The onus is on insurers to provide the kind of proactive customer service that will give them an edge to secure long-term customer devotion.

The needs and preferences of the customer must be taken into careful consideration to help shift customer perceptions away from seeking the lowest price to seeking the best experience.

When it comes to insurer satisfaction, there’s room for improvement

There are several key factors insurers must keep in mind when looking to provide greater value to customers that supersedes a price tag:

  • Deliver proactive, personal experiences. The insurance agent-consumer relationship is too often one of reactivity—with the agent reacting to an issue that the customer surfaces. And when a customer reaches out, there’s no guarantee that the agent receiving the complaint knows their history and preferences. Proactivity and personalization can turn a subpar relationship into a stellar one. But with a lack of customized service and customer knowledge, there are no factors besides price motivating customers to remain loyal to their insurers.
  • Consumers are ready for advancements in customer experience. As buying habits and customer expectations shift, insurers need to evolve to accommodate these changing needs. Today’s tech-savvy customer base is open to—and expects—innovative and cutting-edge use of technology by insurance companies for better customer experiences. Customers are also willing to share more data about themselves if it means better pricing and service.
  • The insurance customer journey has shifted: The insurance customer journey is not what it once was. Today, many millennials buy online only, putting more emphasis on digital channels than ever before. It is critical that insurers have the right technology in place to accommodate and provide better experiences for all consumers—particularly new generations of buyers.
  • The human element remains a top priority. Digital transformation and next-generation technologies rightfully get much attention when considering how to improve business operations and customer service. But at the end of the day, the human factor remains key to maintaining high levels of customer satisfaction—and this still comes in the form of the tried-and-true phone call. Customers seek a quick resolution and personalized experience. The longer the wait time—or the more touchpoints needed to resolve an issue—the worse interactions are perceived.

Insurers are not doing a terrible job at customer experience, but they need to consider more proactive, personalized, and technology-driven approaches to remain competitive in an impulsive market. They should expand their business strategies to not only keep costs down, but also to give customers a reason to be loyal, so they don’t just chase the lowest quote. By offering better, more hands-on, and innovative service, insurers can create lifelong customers, while becoming a more attractive option for prospects.

Life Insurers Need New Approaches to the Lagging Millennials Market

Jim Ryan // Jim Ryan is vice president and industry market lead for Pegasystems’ insurance business.  He is responsible for developing Pega’s insurance product strategies and works with clients to develop solutions that address their business objectives. Ryan has held senior leadership roles at AIG, AON, Swiss Re, and Ernst & Young covering the life, property and casualty, alternative risk transfer, and multinational segments. As a CIO, he led distribution and customer engagement transformation programs that included SAAS, cloud transformation, and process automation solutions.

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