Technology / The expert view: Transforming customer experience for the insurance sector

The expert view: Transforming customer experience for the insurance sector

A group of senior executives from the insurance sector gathered at London's Goring Hotel recently for a Business Reporter breakfast briefing on the topic of transforming customer experience. The conversation was held under Chatham House rules and was sponsored by Genesys.

Introducing the briefing, Kashaf Chaudry, from Genesys, said that he was seeing in the market a strong drive towards efficiency and a focus on timely interventions with customers.

Transformation

A focus of the discussion was on transforming the customer experience. But when we talk about transforming the customer experience, what do we mean? We talk about providing a consistent experience but consistency of what? Most businesses have answered these questions by defining certain goals for how customer interactions should be handled. We often talk about managing processes but really we should be managing the customer, said one attendee.

Not all customers are the same - and it is important to understand the different types of customer that you have - but if your aim is to make each customer feel "understood" then it should be possible to deliver that for all.

Understanding the customer means understanding their needs. One attendee argued: "The claim is our product, not the policy." That thought guides their customer experience.

Something that companies have to work on is ensuring that their values are understood and delivered by front-line staff. That might mean finding ways to empower call centre staff so that they can make more decisions about how to handle customer issues.

Price and loyalty

We have encouraged our customers to think of insurance only in terms of price, one attendee argued, and that has caused a lot of problems. Many of our customers now want only the cheapest policy and don’t care about any other part of the deal. That often backfires on them following a claim, when they find the cheapest firms don’t always have the best claim process or the most comprehensive coverage.

A knock-on effect has been policies with an attractive, low first-year premium that increases in subsequent years because that is the only way to make the policy profitable. However, this just encourages customers to switch after year one.

This environment has partly been created by price comparison websites, though one attendee said that her firm had been very successful in converting customers through aggregator websites even though her company is not the cheapest. She said they had succeeded by carefully analysing each stage of the conversion process and making it as simple and easy as possible. Some people will pay extra for a simple sign-up process, she said.

The constant search for the lowest price has a knock-on effect on loyalty. Some companies try to build loyalty by sending regular newsletters, which often feels like an attempt to simply remind customers which insurance company they are with. Customers don’t want contact all the time, said
one attendee, and coming up with plans to do that is an attempt to solve a business problem, not a customer one.

We need to be more proactive in assessing customer needs, letting them know what services they have available and offering value outside of the times when they are making a claim.

Technology

As with fintech, lots of money is currently going into insurance startups, though the insurance technology sector is still at an earlier stage. That means insurance firms have some time before Silicon Valley businesses come after them but not that much time.

Most of those present say their company is already looking into AI and robotics, particularly for chat bots to handle customer contact. One delegate suggested that we might be on the brink of a world where human contact is an exception and most of our transactions and customer relationships are with bots.

Telematics boxes in cars are one area where technology is having a measurable effect in reducing claims – as well as promoting safer driving. Aimed predominantly at younger drivers, telematics boxes genuinely change behaviour.

Moreover, the link to the insurance company means the insurer often knows that the car has been involved in an accident before anyone else – they can send help, contact emergency services and arrange a replacement car without even needing to be asked, adding another level of customer service.

However, attendees were unsure of how this area would develop in the long term. As self-driving cars enter the market, car manufacturers might offer their own insurance to drivers, taking business away from traditional insurers.

On the process side, anything you can offshore, you can automate, said one attendee. Using automation can lower cost-to-serve without having a negative effect on customer experience so long as you work out where humans are needed.

One attendee summed-up the opportunity ahead for insurance companies: we need to rebuild our processes from a customer point of view.

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