Onboarding: Setting the Tone for Customer Relationships

Insurers need to do more with less to make few interaction go as well as possible to increase customer satisfaction and, ultimately, retention.

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In the insurance world, customer relationships look a lot different than they do in other industries. You might only interact with your customers once or twice per year, and usually for one of two reasons: either it’s time to discuss billing or premiums, or something bad has happened on your customer’s end and they’re now entering the claims process. Neither scenario is particularly conducive to a customer wanting to take the time to get to know their insurance carrier better.

Other financial service industries like banks have 10-20 times more touch-points with their customers. That’s many more opportunities to strengthen the relationship. Insurance providers, therefore, need to do more with less—in other words, they need to make those few interactions go as well as possible to increase customer satisfaction (and ultimately, customer retention).

A Focus on Onboarding

While client servicing during a claim or dispute significantly impacts that customer’s happiness with their provider, many customers will not have a claim in a given year—or in some cases, ever. For those individuals, this leaves insurers with even less opportunity for positive customer interaction that will increase loyalty and convince the customer to stick with that provider.

One area that every customer must go through, however, is onboarding—the process of setting them up in your system with all the resources they need. Beyond whatever marketing and sales activity encouraged the customer to choose your organization, this is the first real interaction with your company and sets the tone for the relationship; getting it right is important.

For some companies, this is where they drop the ball. Marketing might have promised great
things, but when the customer starts interacting with those in the organization who will be handling their account, there can be a bit of a shock if the process is not as easy or positive as they were led to believe.

Challenges to Top-Notch Onboarding

Of course, in some cases, getting onboarding done right is easier said than done. Insurance carriers have to contend with the following roadblocks or difficulties, all of which have the potential to frustrate or inconvenience the customer:

Onboarding can take a long time—In some cases, it can take weeks to get a customer fully set up in backend systems and give employees what they need to properly service them. That delay might go unnoticed by some customers, but others will be put off by needing to spend a lot of time across several days or weeks connecting with their provider, or from any delays in assistance if something comes up early in the policy.
Information gathering is inefficient and draining—Depending on your field and the specific customer involved, you could need to gather an incredible amount of information about your client as part of the onboarding process (or even earlier, during application vetting). The need for various data at different stages of the process means customers are filling out quite a few forms and questionnaires—those can be grating on even the most patient of individuals, especially if some forms ask the same questions that others already had. This inefficiency is multiplied if manual documentation is still in use at an insurance carrier. The digitization of files has been a long time coming for many firms and with the proliferation of tools to manage, transmit, and even sign legal documents digitally, sticking to pen and paper today is bound to prove unpopular with customers.
Data privacy concerns—Regulatory trends continue to push for stronger protection of customer privacy and data, and improved cybersecurity measures to safeguard that data. One of the most recent examples is an amendment to the Gramm-Leach-Bliley Act that was finalized in October 2023 and introduces new reporting requirements for financial services organizations, including insurance providers. Individuals and organizations seeking insurance policies need to provide their own personal data, employee data, and/or sensitive business data to the insurer. If the customer isn’t fully confident that information will be collected, transmitted, and stored securely, or if something happens to expose that data, it will be very difficult for insurance companies to repair that relationship.

The Opportunities for Turning Onboarding Into a Customer Retention Machine
Despite these challenges, insurers can take advantage of the onboarding experience and turn it into a high-value opportunity to increase customer retention. Here’s where you can focus to make that happen:
Eliminate policy misconceptions—During onboarding, have an agent or an in-depth and easy-to-navigate policy guide (i.e., not 1,000 pages of legalese) available to ensure that the customer has the opportunity to confirm what they know about their policy and ask any questions. Having these misconceptions corrected up front is far preferable for the customer rather than discovering something they thought was covered was, in fact, not covered after it occurred.
Speed up the process—It’s 2024, so there’s no need for onboarding to take weeks or even several days. Today’s AI and workflow management tools allow for onboarding to be completed in a day or two. This is because recent innovations in technology allow for the necessary onboarding steps to be automated when possible and directly routed to the people in charge of those functions when 100 percent automation isn’t feasible. For example, by automating the filling of questionnaires with the data that customers previously submitted—in earlier forms or even as far back as when they interacted with your sales or marketing efforts—the process of collecting and validating that data will take far less time and effort for all parties involved.
Show off data privacy and fraud prevention capabilities—Putting your commitment to keeping your customer’s information safe right up front during the onboarding process—either as a section in the front of a written guide or welcome packet or in an onboarding conversation with an agent—will help to put them at ease. Companies need an airtight lifecycle management process for the customer data they will need to confidentially collect and implement. Of course, this is also a good opportunity to remind them that your fraud prevention tools are there to help them as well, as evidenced by using onboarding automation tools to validate the documents customers provide and ensure there aren’t forged documents or suspicious anomalies. Preventing fraud from getting through your defenses helps you keep the average customer’s premium prices down.

Given the small amount of interaction insurers have with their customers compared to other financial service organizations, onboarding is an excellent opportunity to increase customer stickiness by exceeding expectations and making the process as easy and painless as possible. AI-powered automation tools and close adherence to data privacy regulations will put insurers in the best possible position to start out customer relationships on the right foot.

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Jag Lamba, CEO & Founder of Certa // Jag is the founder and CEO of Certa, a third-party lifecycle management platform for procurement, compliance, and ESG. Certa is backed by Techstars and top global VCs. A Wharton and McKinsey alum, Jag lives in Saratoga, Calif., and loves hiking and playing soccer with his son.

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