The insurance sector has become notorious for low customer loyalty and bad Customer Experience.

Research by The Actuary revealed that 27.9 percent of consumers find it the worst sector when it comes to customer service.

This was only made all the more clear in the Institute of Customer Satisfaction’s most recent Customer Satisfaction Index (CSI). In its survey of more than 10,000 UK customers, the sector was granted the unenviable accolade of being the only one not to improve its satisfaction index score in the six months leading up to July 2017.

In contrast, other industries like the financial services are consistently showing improved levels of customer satisfaction and engagement. In the recent CSI, three banks (First Direct, Nationwide, and M&S Bank) were ranked in the top ten scoring organisations for customer satisfaction for the first time, challenging retailers who traditionally dominate this area.

So, for an industry that’s long had a bad reputation when it comes to Customer Experience and satisfaction, what do insurance providers need to do to turn things around and keep up with other sectors?

1. Go beyond the remit

Like banks, insurers operate in a highly competitive environment and customers are faced with an overwhelming amount of choices. However, the truth is that customers often base their choice on price alone. According to research by Marks & Spencer, 95 percent of respondents stated that price was one of the most important factors when deciding which insurance provider to choose.

The average customer’s level of engagement with their insurer is scarce. Typically, a person will only make contact when they need to make a claim, or renew a policy. To make matters worse, making a claim tends to happen at a point of crisis, for example: theft, damage, or loss – when people are, understandably, feeling upset, angry, or worried about their possessions, health, or family.

These factors mean insurers need to work harder than most to create a positive Customer Experience, and a good way to do this is by diversifying their offerings outside of their remit.

It’s time providers found new reasons to be a part of customers’ lives, moved away from being perceived simply as a point of contact during a time of crisis or renewal, and became a provider which offers ongoing support to – and engagement with – customers. For example, thinking beyond the traditional, physical products insurance policies cover – homes, cars, phones – to offer solutions that can help customers in other ways.

2. Protect their online identity

A policy offers peace of mind. Many people take out insurance policies and never need to make a claim. Consumers simply feel better knowing that should disaster strike, they have the right support in place to help them. And it isn’t just physical possessions that people want to protect these days.

With cyber security scandals hitting the headlines every week, consumers are increasingly aware of – and worried about – protecting their online identity.  According to research by Callcredit Information Group, 66 percent of consumers perceive the risk of identity theft and online fraud as one of their biggest concerns around sharing personal information online.

So when you consider the common perception consumers have of their insurers is as ‘protectors’, it’s clear there is an opportunity for them to help customers to prevent and detect such fraud incidents before they have even occurred – and help assist and resolve issues if they do arise.

For example, by providing cyber prevention and detection services that continually monitor their customers’ activity online and flagging incidents when they’re at risk. By doing so they can offer a beneficial service and solution that increases engagement.

3. Embrace digital transformation

We’re in a world where we live through our devices, so to improve the Customer Experience insurers clearly need to keep pace with the digital age. But, there’s still some way to go. A recent survey by Eptica found that the UK’s leading insurance companies fail to accurately answer more than two thirds (68 percent) of routine questions asked through the web, email, Twitter, and Facebook.

Looking to the US for inspiration, insurers should take note of digital insurer Lemonade, which is making waves for its digital-first, fuss-free approach to claims. At the start of 2017, its virtual assistant Jim set a world record as it reviewed, processed, and paid a claim in three seconds – with no paperwork. If all insurers can aim to deliver this level of service, which brings cost and time-saving benefits to consumers, this could lead to increased engagement, loyalty, and advocacy.

In the UK however, it’s the financial services companies doing this particularly well, with digital bank Atom leading the charge. In a clear sign that Atom wants to offer its customers something different, it acquired software company Grasp, which specialises in games and virtual reality development, to improve its digital platforms.

Atom’s app lets customers personalise their experience by choosing a logo, name, and colours. By allowing them to adapt the interface to suit their personal preferences, it makes the banking experience truly unique and improves customer engagement.

Insurance is often perceived as a necessity in life. It’s not particularly enjoyable but it’s always needed. To improve their Customer Experience, insurers need to think beyond their current offerings and find other ways that they can add value to consumers’ lives. If they do so, they might stand a chance of turning their reputation around.

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About The Author

Vice President and Country Manager UK, Affinion

Karen is a B2B specialist with more than 20 years’ experience in the financial services sector, primarily in retail banking and general insurance. In her role as Vice President and UK country manager at Affinion, Karen provides strategic leadership advice to the UK team and is responsible for driving and delivering UK commercial growth through both new and existing business.