There Is an emerging trend of Insurers globally recognizing that, after years of sluggish growth in a highly mature and saturated market, customer-centricity can provide the basis of sustainable competitive advantage. This is demonstrated by the Increasing number of customer transformation programs being established by insurance and savings firms--underpinned by the latest Customer Experience Excellence (CEE) ratings which record positive progress for many of the world's largest players.
However, while many have Identified the Importance of CX Excellence In the process of delivering customer service across multiple channels, insurers need to go further in harnessing customer data and insight to grow the market and solve more customer problems through effective innovation and product development. Customer lifestyles are continuing to evolve rapidly, and traditional packaged insurance products risk lacking relevance without greater levels of customer-led innovation.
Enabling customer-centricity across the organization means connecting across front, middle, and back-office functions. Firms which adopt this connected approach to investing in CX capabilities can expect greater and more sustained results than those who focus just in the traditional customer-facing functions. One key area of focus for many insurers is how to develop a more progressive ecosystem of partners and suppliers. While the threat of Insurtechs hasn't unseated traditional players as direct competitors, there Is a significant opportunity for partnering with new, agile Fintechs across the traditional insurance value chain to improve innovation, cost-effectiveness, and customer experience. In the UK, Aviva's partnership with Lemonade Is an excellent example of customer-focused partnerships.
There is a positive movement towards insurers recognizing the need for, and making incremental steps toward, CX excellence. There are also emerging examples of insurers taking a global approach to driving toward customer-centricity. The next step will be for them to accelerate this activity and ensure that CX excellence capabilities are developed across their organization.
With the sector emerging with an even more mixed reputation following the pandemic, coupled with the hypersensitivity toward brand behavior, we see that insurers will need to focus on how they do business more than ever before. While data privacy regulations take hold across multiple markets, insurers are looking increasingly toward ESG for advantage. From Net Zero insurance policies to ESG-friendly pension funds and beyond, insurers must make sure that they are backing up their claims with positive action throughout the organization to avoid 'greenwashing'.
More insurers are adopting a 'customer journey' approach to designing CX, allowing customer pain points to be quickly identified and solved, and often reducing friction and therefore cost to serve. With multi-channel customer service becoming the norm, insurers now need to move to a seamless omnichannel experience--where the use of AI through harnessing the power of data and analytics should ensure the same journey regardless of channel.
While it Is clear that customers expect insurers to be there for them when they make a claim, more could be done to re-enforce the value of insurance throughout the lifecycle of the policy. With family finances continuing to be squeezed, there Is an opportunity to increase the level of useful and relevant engagement with customers outside of renewal windows and claims.
Time & Effort
With digital now being the standard purchase journey for insurance, customers expect the same level of digital sophistication across the policy lifecycle. Large legacy systems are continuing to impede progress in this space, with significant investment often required for something as simple as changing an address online. Insurers should look to cloud-based solutions and digital partnerships to accelerate opportunities to digitize across their journeys.
Insurers have a rich history of using sophisticated data analysis in their underwriting, pricing and financial modeling. Some insurers are beginning to harness AI capabilities to deliver a much more personalized customer experience, especially across digital channels. As consumer expectations of personalization increase, there will be a balance for insurers to achieve between the sophisticated use of data to improve personalization and not being seen as intrusive.
Insurers are in a unique place in financial services to deliver genuine empathy--especially at the key moment of truth in a claims situation. With the human touch seen as critical to 'operationalizing' empathy in these situations, insurers are wary of automating too many customer-facing processes due to the perceived risk to delivering empathetic experiences. However, there are a number of insurers who are investing in the right technology--and genuinely understand the customer's emotional journey--who are successfully delivering empathy and increased NPS In a digital setting.
The Customer Experience Leaders
In the global CEE report 2022, there are some excellent examples of insurers delivering fantastic experiences for customers which, in turn, are driving sustained commercial performance:
- Traditional approaches to claims transformation have centered on an internal need to reduce the cost of claims. However US insurer USAA took a different approach, setting out a customer vision for a touchless auto claims experience. They automated workflows and harnessed the power of AI to deliver a solution which not only delivered the customer vision, but streamlined the repair process and improved overall cost-efficiency.
- In Thailand, life insurer Prudential Is investing In connected technology to create tailored digital health experiences for employees of its group schemes. The 24/7 Pulse by Prudential app, the first of its kind In Asia, is likely to positively Impact workforce productivity as well as providing a key differentiator for Prudential.
- In the UK, insurer LV= are in the fifth year of their Green Heart Support program in which customer experience agents are empowered to be there for their customers when extraordinary things happen. This is one of the key reasons LV= are one of the most highly recommended insurers in the UK.
As customers continue to live through uncertain times, insurers are moving towards a more customer-centric model, but still have a ways to go. Their aim is to be a safety net for consumers and businesses in their hour of need. As technology advances, insurers have the opportunity to simplify legacy and fragmented architectures and thereby deliver great customer experience. They will need to design from an end-to-end customer perspective and attract and retain top talent to do so.