The latest UK Customer Satisfaction Index revealed insurance is one of just three sectors that saw its overall satisfaction score fall since last year. Karen Wheeler, Vice President and Country Manager UK at Affinion, looks at how the industry can turn its customer experience fortunes around.
Considering the national measure of customer satisfaction, last month the Institute of Customer Service published its most recent ‘UK Customer Satisfaction Index’. The survey of over 10,000 UK customers named and shamed insurance as one of just three sectors (out of a total of 13) that saw its overall satisfaction index score fall in a year-on-year comparison.
The insurance industry’s struggle is hardly a surprise – in recent years its lagged behind retailers and financial services organisations, which have set the standard for quality customer service and experience. In fact, the Index found that in comparison, banks continue to show consistent signs of improvement – two banks were ranked in the top three scoring organisations for customer satisfaction (only beaten by Amazon) and Yorkshire Bank was awarded the impressive accolade of ‘most improved’ organisation, having increased its score by ten points.
This can been backed up by research by Engine Service Design which has found that banks are greatly outperforming insurance firms as a result of their improved mobile and digital offerings and 27.9 per cent of consumers finding the insurers the worst when it comes to customer service.
But while the industry has notoriously struggled with customer engagement – in light of its recent decline, there is a renewed sense of urgency. It begs the question; what can providers do to turn things around and how can they improve the customer experience?
Diversify offerings to increase interaction
A typical customer’s level of engagement with their insurer is sporadic at best. In the past, a person has only made contact when they need to make a claim or renew a policy and neither of these tasks are particularly enjoyable. As Andrew Brem, Chief Digital Officer at Aviva has 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. Whether it is theft, damage, or loss – it is when people are, understandably, feeling upset, angry, or worried about their possessions, health, or family. Due to the negative emotions accompany these moments of contact, insurers need to work harder than most other sectors to create a positive customer experience. However, while it’s a challenge, it’s by no means impossible and a good place to start is by diversifying their offerings outside of their remit.
Insurance providers should look for new reasons to be a part of customers’ lives. This way they can move away from being perceived as a necessary point of contact during a time of crisis or renewal, to a provider which offers ongoing and relevant support to – and engagement with – customers.
A survey by GMC Software found that 85 per cent of consumers would like it if their insurer gave them personalised insight into how they could lower their premium. Therefore, by thinking beyond the traditional, physical products insurance policies cover – homes, cars, phones – insurers can offer solutions or services that can help customers in other ways.
A good example of this is Aviva Drive, a free app created by the organisation that helps customers hone their driving skills. The app records its customers’ journeys by detecting movement via their phone’s GPS and once a customer has completed 200 miles, they’ll receive an individual driving score out of 10 based on things such as cornering, braking and acceleration. Aviva then use that score to calculate customers’ personalised discount, compare the score to the national average and provide feedback on their driving.
Another area that insurers could explore is battling cybercrime. With cyber security scandals hitting the headlines on a regular basis, consumers are increasingly aware of – and worried about – protecting their online identity. According to research by Callcredit Information Group, 66 per cent of consumers perceive the risk of identity theft and online fraud as one of their biggest concerns around sharing personal information online. It isn’t just physical possessions that people want to protect these days.
The common perception consumers have of their insurers is as ‘protectors’. Some people will take out insurance policies and never make a claim, they just feel better knowing that should disaster strike, they have the right support in place to help. So, when you consider this, it’s clear there is an opportunity for firms to diversify their offerings, to help customers 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.
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. 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 is holding 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 more than two thirds (68 per cent) of 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. While McKinsey predicts that a motor insurer fully embracing digital could double its profits in five years, it is important to note that digitisation isn’t just promising for profits. If all insurers delivered a digital service, bringing with it cost and time-saving benefits to consumers, it could also lead to increased engagement, loyalty, and advocacy.
Insurance is often perceived as a chore by customers. It has been long associated with endless paperwork and tricky conversations. To improve their customer experience, insurers need to wake up to the need to engage, embrace digital transformation and identify other ways that they can add value to consumers’ lives, using this insight to diversify their current offerings. If they do so, they might just stand a chance of improving their next customer satisfaction score.
Karen Wheeler is Vice President and Country Manager UK at Affinion. She has more than 20 years’ experience in the financial services sector, primarily in retail banking and general insurance.