Insurers need to do a much better job of communicating with customers
Not all that long ago, insurers didn’t have to worry too much about customer communication. Communication was managed entirely by the broker and after all, if someone took out a policy, it was usually for life. Apart from the odd update, the only time they’d have to talk to a customer was during a claim.
Over time, however, things have changed. People have more insurance options available to them than ever before and each of those insurers are angling for their custom.
In such a climate, it’s vital that insurers maintain direct communications with their clients. While a broker, in many cases, brings customers onboard and has a personal relationship with them, it’s up to the insurer to ensure that their customers receive regular communication that is meaningful to their relationship around their policy. Insurance is a grudge purchase, so for insurers to stay top-of-mind in a positive manner, they also need to make sure that the communications they send out are relevant and personalized.
Customers who have not interacted with their insurers during the last 18 months
Global insurance consumers who prefer communications at least semi-annually
Unfortunately, most insurers are getting it wrong. According to research from EY, “44% of customers have had no interactions with their insurers during the last 18 months. ”According to the same research, “57% of global insurance consumers, across all product types, prefer to hear from their providers at least semi-annually.”
It’s also worth bearing in mind that the contact consumers usually have with insurers – a quarterly bill, annual renewal or claim submission – doesn’t do much to expose them to the kind of relevant, contextual information that encourages loyalty.
Compare that with the high levels of communication they get from businesses in other sectors, and factor in the large degree of choice consumers have available, and you can see why a “business-as-usual” approach is a major risk.
The benefits of better communication
Given the scarcity and type of communications used by insurers, every interaction can be used to garner a better relationship.
Research from Bain & Company shows that insurers now realize this and are investing in their communication efforts. They’ve embraced digital platforms, retrained employees and redesigned the way they interact with customers.
It’s an investment worth making too. According to Bain & Company, companies that undertake these initiatives can grow their Net Promoter Scores by as much as a 20 percentage points over a three-year period. Those who don’t, see a similar percentage point loss.
Massive scope for improvement
It’s important to note that most of these gains are slow and will only pay off in the long term. Insurers also need to look at short term initiatives that will have a real impact.
Among the most important of these initiatives is digitizing customer interactions as much as possible. This allows for quick turnaround and meets the customer’s expectation of immediate gratification. For example, consider sending policies via email and then providing an electronic signature option. This speeds up the process and provides a far better experience. That executed policy can then be emailed back to the customer immediately.
Walking the talk
If an insurer is really committed to taking a digital-first, customer-centric approach, how should it go about doing so?
First, insurers need to understand how and when customers interact with them. Customer journey mapping is essential to identifying ‘moments that matter,’ across the customer lifecycle.
Insurers should also move away from the cost savings mindset when approaching customer communication and rather focus on the benefits of engaging with customers and tracking their behavior.
Practically, insurance agents need to develop a plan that enables them to:
- Digitize the customer experience
- Gather information about their customers
- Leverage data to create personalized communications
- Drive customer engagement by including relevant, contextual cross-selling offers
- Segment and personalize communications for higher conversion and engagement rates
Make it personal
A quick scan through the points above is enough to show how big a role personalization should play in insurer communications. Customers want insurers to communicate with them on the channels they use and, more importantly, treat them like individuals.
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