Improving customer experience in the insurance sector

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

This year the Institute of Customer Service shamed the insurance industry in its latest UK Customer Satisfaction Index as one of three sectors (out of a total of 13) that saw its overall satisfaction index score decrease in a year-on-year comparison. This comes as no surprise. In recent years it has fallen significantly behind its retail and financial services rivals. In fact, research by Engine Service Design revealed that 27.9% of consumers find insurers the worst when it comes to customer service.

Meanwhile, banks continue to improve. Only one insurer ranked in the Index’s the top 20 organisations scoring for customer satisfaction, while First Bank and Yorkshire Bank stole two of the top three spots (only beaten to first by Amazon) and the latter was awarded the impressive accolade of ‘most improved’ organisation, having increased its score by ten points.

So, how can the insurance industry improve?

Increase levels of interaction by diversifying offerings

Traditionally, customers only make contact when they need to make a claim or renew a policy and neither of these tasks are particularly enjoyable. As Andrew Brem, Aviva’s Chief Digital Officer said, it is “unbelievably dull”, but

“whether or not you find it dull, it is bloody important”.

To make matters worse, making a claim tends to happen at a point of crisis. So, insurers need to work harder than most other sectors to create a positive customer experience. To combat this, they should begin to diversify their offerings outside of their remit.

Insurers should look for new reasons to engage with customers. They can then remove the perception of only being a necessary point of contact during a time of crisis or renewal, to a provider which offers ongoing and relevant support.

A good example of this is Aviva Drive, a free app to help customers hone their driving skills. It records customer journeys via their phone’s GPS and once a customer has completed 200 miles, they’ll receive an individual driving score out of 10. Aviva use that score to calculate the customer’s personalised discount, compare the score to the national average and provide feedback on their driving.

Another area that insurers could explore is battling cybercrime. 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.

Consumers often view insurers as ‘protectors’ which offer peace of mind should disaster strike. So, when you consider this, it’s clear there is an opportunity for firms to diversify their offerings, help customers prevent fraud and assist and resolve issues if they do arise.

Tackle the digital challenge

We’re in a world where we live through our devices, so to improve customer experience insurers need to keep pace with the digital age. Our Connected Customer research found that customers interacting with their provider using both traditional and digital platforms were more engaged, while customers with access to three channels had engagement scores 11% higher than those using one. But, unfortunately for the insurance sector, there’s still some way to go in this area.

A recent survey by Altus Consulting revealed that slow adoption of digitisation holds many insurance firms back, with only four per cent of UK insurers currently running digital claims processes. Meanwhile, Eptica similarly found that the UK’s leading insurance companies routinely fail to accurately answer 68% of questions asked through the web, email, Twitter, and Facebook.

US insurer Lemonade 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. While McKinsey predicts that a motor insurer fully embracing digital could double its profits in five years, it’s important to note that digitisation isn’t just promising for profits. It’s about cost and time-saving benefits for consumers, which could lead to increased engagement, loyalty, and advocacy.

Unfortunately, due to its very nature, insurance has become associated with endless amounts of paperwork, difficult conversations and stress. But this needn’t be the case and the customer experience isn’t a lost cause because of it. Insurers need to recognise the importance of digital transformation and understand the variety of new ways it is possible to add value to customers’ lives. By diversifying offerings outside their current remit, they will be in a good position to break out of the poor customer experience cycle they’re currently stuck in and improve their Customer Satisfaction Index scores next year.