As insurers struggle to keep costs under control while driving growth – or at least retain existing customers – customer experience has emerged as a key area for both better understanding their customer relationships and delivering on customers’ preferences for products and services.
As insurers have migrated to a more customer-centric operational approach they have learned that customer experience quality is a far more relevant metric to get a true picture of their customers’ satisfaction across products and channels over the entire customer lifecycle. Traditional customer satisfaction metrics rely on readings that are taken at a single point in time. Customer experience quality measurements, by contrast, can take into account scores of touch points between insurer and customer and determine whether the interaction was positive, negative or neutral. This approach has yielded new insights into insurance customers, including the following:
- Retention risks are highest for customers having a negative/neutral customer experience.
- In every geography, insurers’ positive customer experience ratings are much lower than their customer satisfaction levels.
- Even in the US, where the customer experience rating is the highest, more than 50% of customers are retention risks, indicating that significant opportunities exist to improve experience levels based on the areas customers say matter most.
- When compared to their banking brethren where interaction points are much more frequent, insurers have marginally lower customer experience ratings. Banking’s higher customer experience ratings indicate that best practices in data analytics, market segmentation and cross-channel integration are being implemented.
- Online channels are now preferred by insurance customers for activities like finding best price and comparing policy coverage, but customers prefer physical distribution networks (agents and brokers) when it comes to gaining trust.
Some of these findings may be unsurprising, but all provide validation about customer perception and behavior that has profound implications for technology strategy. However, the most important revelations are those that an individual insurer can clean from examining the experience of its own customers, which in turn will counsel a more specific view of the imperatives that carrier faces in retaining and building its customer base.