How can insurers improve customer loyalty?

By Karen Wheeler, Country Manager and Vice-President, Affinion UK

It’s no secret that the insurance industry faces a constant challenge to keep customers loyal. Taking out insurance policies to protect homes, health, businesses and possessions can be seen as a necessary, but dull, part of everyday life. And unfortunately, insurers are often associated with bad customer service. This was proven when the Institute of Customer Satisfaction released its latest Customer Satisfaction Index. In a survey of over 10,000 UK customers, the sector faced the unenviable accolade of being the only sector not to improve its satisfaction index score compared to the previous six months.

So, what can insurers do to turn this around and build better relationships with their customers?

  1. Stand out in a crowded market

A fundamental challenge insurers’ face is that they operate in a highly commoditised environment, with customers faced with a sea of overwhelming choice. And the reality is that customers are often only basing their choice on cost. According to research by Marks & Spencer, 95% of respondents stated that price was one of the most important factors to them when deciding which insurance provider to choose.

The nature of interactions between customers and their providers is also a challenge. Customers typically only make contact with their insurers when they either need to make a claim, or renew a policy. Making a claim usually happens at a point of crisis, for example theft, damage or loss, when people are understandably, feeling worried about their possessions, business or family.

Insurers therefore need to work hard to differentiate themselves from competitors by engaging with customers in a positive way, and finding new reasons to be a part of their lives.

  1. Think outside the box

Many consumers and businesses take out insurance policies and never have to make a claim. The appeal is the peace of mind it offers; people feel better knowing that if the worst happens, they have the support in place to help them. Of course, it isn’t just physical possessions – houses, cars, phones – that people want to protect.

With cyber hacking scandals hitting the headlines every week, consumers and businesses alike are increasingly aware, and worried about, the threat of online fraud. According to research by Callcredit Information Group, 66% of consumers perceive the risk of identity theft and online fraud as one of their biggest concerns around sharing personal information online. The government’s Cyber Security Breaches Survey of 2017 also found that a quarter of all companies experience a breach at least once per month, but despite this only a third have security policies in place.

As the old saying goes, prevention is better than cure – and this is certainly the case when it comes to online fraud. If a hacker finds out the password a person uses across several sites – banking, retailer apps and email accounts, for example – the repercussions can be extensive, with risks to reputational damage and the exploitation of sensitive data.

  1. Become their digital guardian angel

When you consider the perception consumers’ have of their insurers as guardians of their belongings, there is a natural role they can play in helping customers to prevent and detect fraud incidents before they have even occurred – and help assist and resolve issues if they do arise.

For example, providing cyber prevention and detection services that continually monitor their customers’ activity online and flags incidents when they’re at risk. This can include:

  • Device based software detection tools that block malware and protect against the risks of data theft
  • Safeguarding mobile browsing to ensure no-one is prying or intercepting what is being typed or sent
  • Public web scanning so individuals and businesses know where personal information is being stored
  • Social media scanning – big data analysis based on information not accessible via standard search engines
  • Dark web scanning – the detection of compromised personal information shown on hidden layers of the web

These solutions present an opportunity for insurers to futureproof their role in consumers’ lives by offering value, benefits, and – most importantly – peace of mind. That way, they may well move up the table in the next Customer Satisfaction Index.