In the race to deliver better customer experiences in the insurance industry, insurance organizations have been pushing hard to get across the finish line but are still lagging behind other industries.
Insurance Customer Experience Falls Short
Historically, insurers have been more product-centric rather than customer-centric; and this focus has been reflected in the industry’s Net Promoter Score (NPS).
In 2021, insurance brokers in the US and Canada had a NPS of around 34 and globally, the average NPS across the industry was 57. This low score shows that customers are still not satisfied with the level of service being provided by their insurers.
What can insurers do to catch up and improve their customer experience?
3 Steps to Improve Insurance Customer Experience
In order to catch up to policyholder demands and changing industry needs, insurers can follow these 3 steps to jumpstart their CX initiatives:
Identify Digital CX Maturity
41% of policyholders say that they are likely or more likely to switch providers due to a lack of digital capabilities. So, are insurers able to deliver the digital capabilities their policyholders are looking for?
According to IDC, there are 5 levels of digital customer experience maturity for insurers.
- Level 1: Superficial
Insurers here are lagging far behind. These insurers are slow to change and grow because they are unable to keep pace with ecosystem needs. Additionally, their goals and strategies are not aligned to focus on improving CX.
- Level 2: Enriched
At this stage, insurers understand the need for better CX, but their efforts are inconsistent and unsustainable because programs are disparate and not executed well.
- Level 3: Multidimensional
The insurer at this stage has aligned to a CX-focused strategy. They have made efforts to build a connected ecosystem among their agents, employees, and customers, which results in improved loyalty and business performance. They are on part with their peers and competitors.
- Level 4: Amplified
With a customer-focused strategy and integrated ecosystem, insurers can begin to sense and respond to market needs early. This allows them to provide value to their policyholders and grow their market share.
- Level 5: Disruptive
The highest level of CX maturity means that insurers are well attuned to the market, able to consistently and sustainably grow the business ahead of their competition through new digital technologies and business models. Leaders encourage innovation and experimentation to develop better ways to serve their policyholders.
- Level 1: Superficial
Evolve Priorities to Be More Customer-Centric
Depending on where the business falls in the maturity model, insurers can assess how they can transform their strategies and tactics in order to be more customer-centric. For example, two critical CX strategies that insurers in level 2 and 3 should focus on:
Customers want to interact with their insurance providers on multiple channels.
Millennials contact their insurers up to 2.5x more times through social networks and 2x more through mobile.
But most insurers are not equipped to deliver integrated and seamless experiences across these touchpoints.
By investing in an omnichannel customer service strategy, insurers can provide a consistent experience regardless of the channel they use so customers can receive relevant and targeted information.
Insurance is complicated. Not only for the end customers, but also for the intermediaries and carriers who need to sell the policies.
70% of customers say that connected processes are very important to win their business (such as seamless handoffs between departments and channels, or contextualized engagement based on earlier interactions)
Insurers should invest into the digitalization or replacement of their core functions in order to simplify the processes for their users.
Build A Specific Digital Strategy Roadmap
With CX priorities guiding the way, businesses can map and plan out what they need in order to cross that finish line.
While it may be exciting to see the end goal come into focus, insurers must be careful not to rush and overwhelm their teams. IDC recommends breaking up the digital strategy into short-term and long-term goals for a more manageable and sustainable customer experience transformation.
To see how, grab your copy of the full IDC InfoBrief here.
See the full list of steps to improve CX in the IDC InfoBrief.
The Race to Improve Customer Experience
Your training for this race is complete. You’ve identified the gaps, established strategic priorities, and mapped out the tactics. Now it’s time to start driving. Download the full IDC InfoBrief to learn how you can bring about successful CX transformation.
Source: IDC InfoBrief “How to Accelerate Customer Experience Transformation in Insurance”, May 2021, sponsored by Liferay