Customer service in the insurance industry

The technology transformation over the last 10 years has opened up new opportunities.

This is to allow insurers to get closer to their customers so much that so they can give a personalised service.

Using the right tools and metrics has allowed insurance companies to improve customer service like never before.  Having said this, is a gap in customer experience as many customers feel that they have not had good experience with insurance companies.

When dealing with insurance companies as most of the customers would only speak to insurance companies when there is a problem.

The insurance industry as a whole has been very hard for many years to make a difference for customers but have failed to secure their trust.  For this reason most insurers are asking what can be done to win customer trust and to improve customer experience.  This is also to help insurers when dealing with customers and to increase customer retention rate.

Digital technology is one of the biggest areas where insurance companies are looking at to take their customer relations to next level.  Already insurance companies are using technologies to improve speed of claims.  But more importantly allowing them to offer new experiences that are already changing how customers look at insurance.

Consumers are becoming more demanding higher level of standards in service matching service they find in other industries such shopping and Banking.  Consumers want service to improve so much so that they have an unprecedented level of choice.  Consumers want transparency and immediate answers to related to their policy, claim or new business.

Some insurance companies have already become fully digitalised such as InShared which is a Dutch general insurer.  InShared have incorporated a virtual assistant on its website since 2012 that provides answers 56% of the company’s non-claims customer contacts.  Their online service also include:-

  • Initial quote for making a claim
  • Booking repairs
  • Managing their details

And much more… 

This has allowed InShared to keep their costs low and at the same time making the customer feel more in control of their insurance affairs.

Long standing and established insurance companies are lagging behind in updating their technologies.  New technologies allow their customers to be more in control of their policies and other insurance affairs.  This is due to large insurance establishments being hampered partly by old and legacy IT systems.  And the implications of costs of updating these systems would be enormous.  However, some larger insurance companies are making changes already.  Changes are being made where they can without having to take on higher risks of high costs insurers and also having to train their staff and possibly employing more staff to manage the technology.   Larger insurers tend to place their focus on ratings, risk and products.  But whilst lagging behind in technology has meant that they are sometimes behind in understand their customer’s demands and requirements.  A lot of the larger insurance companies are still placing their focus on e-commerce.  This includes updating their website content and design which is something have always been doing over the years.

Some insurance companies are now developing deeper, personal with longer lasting relationships with their customers.  This is done by using digital capabilities which allows them to gain an enhanced knowledge of their customers.  This is allowing their customer’s insurance record & history, personal likes and dislikes life habits.

Technology has allowed insurance to become much more commoditised impacting customer decisions, such as being more prices driven. This has however impacted on insurance company’s profit margins affected whilst customer engagement decreasing as a result.

Research has shown that 79% consumers say that they will use new technology and digital platforms over the next few years.  This is for their insurance needs as more insurance companies jump board in updating their technology.

Research has also found that digitisation can lead to more enhanced customer engagement allowing the insurance company at competitive advantaged with their competitions.  A research by PwC has found that 68% of the consumers would use an insurance app on their Smartphone.  However two thirds or 67% would even fit a sensor attached to their home, car allowing greater analysis.  But in return would like to see their premiums to be lowered.

As the insurance industry is changing in terms, prices, policies, insurance companies will need to adapt and implement new tools and technology.  This would allow them to capture and analyse new sources of customer data allowing the insurance company to develop a deeper relationships.  Once the data is statically analysed and turned into insights that can lead to innovations in the insurance industry.

Insurance companies who are already at the forefront of the technology sphere are encouraging other companies to upgrade their systems and to up their game.  These companies have found that digitisation has allowed them to change customer behaviour and increasing customer loyalty but also allowing premiums to be reduced.

Having said these insurance companies have understood the impact technology can have on jobs and costs for managing the technology.  But at the same time it will allow for insurance professionals to spend less time on menial and admin tasks whilst spending time on energy on customer engagement, efficiency and betterment at decision making.

The data analysed will need to be turned in to action that will enable insurance companies to provide products and services that customers actually want.  This will also enable customers to give their view and opinions into the products and services that they are getting.  This is where insurance professionals will need to expand customer product lines that best suites the customer and product that is also much more beneficial to the company. Read: How to buy a mortgaged property from others

Customers are becoming more price driven the insurance companies will need to tailor products and services worked out from customer expectations.   This is one of the reasons why insurance companies are placing greater emphasis on developing teams of professionals who are involved in carrying out research into customer experience.

There is also the big data which allows insurance professionals to become real-time consultants.  Whilst increasing emphasis on customer expectations and constantly share insights with each other.  This could mean that the insurer can even warn you about speeding or even let you know that you have not locked the door.  Maybe also inform you about an illness you have and give you information on medical consultants.  This would allow providing you with the information about how this could affect your insurance renewal even well before the actual renewal date.  The other round could be that the customer could inform the insurer they have stopped smoking or their illness has been cured.  How this will exactly impact customer behaviour is yet to see in real-time terms.

Insurance companies may need to employ a team of experts who can manage the whole customer experience or could potentially outsource this part of the business to another company who can do this for them.

We are yet to see how this will impact on consumer and insurers financial risks and also maybe physical risks for the consumer is yet to see.  Either way, insurance and technology will always be evolving hand-in-hand, either at snail’s pace or at speed.