The Amazon Effect has upended traditional modes of business across all industries as customers increasingly expect personalized, on-demand service.
The property and casualty (P&C) insurance industry is no exception, and customer needs and expectations are driving a digital transformation within the industry.
As companies in the P&C insurance industry strive to digitize their businesses, they must focus on implementing tools and processes that improve the customer experience, because gaining customer loyalty will be key to the survival of these companies.
Today’s customers have high expectations of the brands they patronize, and a saturated market means they’re less incentivized than ever to remain loyal to a single company. Customers expect on-demand, personalized service, even from their P&C insurance providers, and companies should turn to digital tools to fulfill those expectations.
Modern customers expect quick answers to their questions at all times, whether they’re contemplating a purchase, refining their policy, or filing a claim.
They expect a shorter and easier onboarding process. A full 45% of prospective customers who shop for insurance fail to convert, and they cite historically cumbersome, drawn-out, and inefficient processes as the reason. And, once they become active customers, they expect a fast, user-friendly, and transparent claim-filing process.
Moreover, today’s tech-savvy customers want to work with an insurer that can handle a wide range of new products and services (e.g., self-driving cars, connected homes, insurance for vehicles used in ride-hailing, etc.). And as a digital-first generation comes of age and begins to purchase P&C insurance, they expect their insurers to invest in and offer technology that makes the insurance-buying process easier and more customized.
Improving the customer experience is a tangible way to regain customer loyalty and boost your bottom line.
Loyal customers are more than consumers; they’re advocates—they’re your promoters. When insurers double-down on providing an experience that prompts a customer to promote the company, they can realize tangible benefits. According to a 2020 auto insurance industry study from J.D. Power:
“Small movements in NPS can translate to large losses of potential premium even without taking defection risk into consideration. The stronger the customers feelings are about the brand the more likely they are to talk (positive or negative) but more importantly, the more likely others will take action on their positive or negative recommendation.”
J.D. Power highlights the significant difference between positive and negative advocacy. They studied two groups of 1,000 customers. The first group gave their auto insurers NPS scores of 8+ and increased premiums by as much as $362,142 through their positive advocacy. The second group gave their auto insurers NPS scores of less than 5, creating up to $751,464 in premium losses. Your ability to drive loyalty through better customer experiences truly makes a difference to your bottom line.
And today, P&C insurance companies need the support of loyal customers more than ever before. A recent McKinsey report posited that the P&C industry has largely been “running in place,” with industry growth stagnating or decreasing in some markets. Moreover, a growing number of competitors has diluted historic customer loyalty. One way insurers can combat risk and regain growth is by delivering an exceptional customer experience that wins and retains customers.
Today’s customers are digitally savvy, and they associate helpful tech tools with a better experience, which leads to a more positive perception of the insurance company. To enhance the customer experience, insurers should invest in a slate of digital tools that customers want and, in many cases, expect.
Chatbots improve the experience for P&C insurance customers by answering easy questions more quickly. Rather than wait on hold to speak with a live agent, customers can leverage chatbots for self-service. Not only does this save time for the customer, but it also streamlines the paths toward the initial purchase, cross-selling, and improved customer service.
Automated quotes improve the customer experience by expediting the sales process for customers, thus boosting an insurer’s conversion rate. Today’s customers don’t want to spend hours (or longer) speaking with agents and sifting through documentation in order to receive a quote. Since 45% of interested customers don’t convert, companies should invest in tools that simplify these early interactions and encourage the speedy, easy purchase of P&C insurance.
Automated Claims Processing
Automating the claims process improves the customer experience by solving one of P&C insurance customers’ largest pain points. An antiquated claims process, which can be slow and confusing, is one of the biggest detractors of a positive customer experience. Automation expedites the process and eliminates potentially frustrating interactions, which improves the customer’s perception of the company and enhances the overall customer experience.
A consistent experience across all devices is critical for a positive customer experience. Today’s customers expect easy access to information, regardless of which channel or the device they’re using. According to the Bain report, “Over the next few years, acquiring and interacting with existing customers will increasingly cut across different channels.” Insurers should prepare for this inevitability by ensuring a consistent experience on every medium—the company’s website, mobile, social media, etc.—and thus improving the experience for customers.
Telematics improves the customer experience by offering the personalization today’s customers crave. Telematics offers “personalization at scale” by sending diagnostic data directly from a connected device to the insurer. This creates a direct line of contact between the insurer and the customer, who expects and prefers customized service. Ultimately, this type of personalized engagement allows the insurer to form a deeper (and ultimately more lucrative) relationship with the customer.
It’s a tough time to be in the P&C insurance industry, but digital transformation represents a new opportunity for connection and growth. P&C insurance companies ensure their own longevity by investing in digital tools that improve the customer experience.