How listening drives solutions
Two weeks ago, I discussed a Majesco report from April that surveyed 1,000 UK insurance customers for their service preferences. We shared a link to the full report and discussed the findings that were somewhat ironic in nature. You can read that blog here.
We covered insurance communication and service-related issues, including:
- Not every insurance customer is focused on price.
- Those who are focused on price, are infrequently using insurers for their comparisons — they are using aggregators instead.
- One-third of insurance customers surveyed are dissatisfied with their insurer’s service levels.
- Improved service technologies will save insurers on administrative costs.
While these issues may or may not be surprising to insurers, they can certainly be used for prioritising business technology projects. We can segment our discussion into two buckets: Communication and Service. Acknowledging that Communication and Service overlap, and that both are “two-way” in nature, I would like to focus on Communication as the outward messaging from the insurer to the customer and Service as the interactions that are initiated by the customer to the insurer.
What Drives Communication Solutions?
The Majesco report found a host of issues surrounding communication, and not all of them were technology related. For example, 33-35% of customers felt that insurers should make policies easier to understand. Roughly the same number wished that everything they needed could be sent via e-mail. Between 50-60% of customers were only contacted by their insurer once per year. Compare this to many retail companies that communicate with customers once per week (or more) and you’ll see that both insurer loyalty and consumer knowledge suffer from a lack of effective, consistent messages.
Consumers today wish to be known and to be catered to, and to grasp the value they receive for the price they pay. This one issue touches several technologies. To foster both a comprehensive approach to communication and an individualised message set, insurers should work to modernise customer engagement capabilities, data and analytics technologies, communication tools (social media, mobile apps, e-mail marketing technologies, agent communication tools) and any technologies that unify customer information between separate systems, such as general insurance, life and pensions for insurers. These projects involve a blend of technology upgradations in customer facing systems and data management systems but may not need replacement of core administration systems. Insurers should start with a customer-focused plan for communication (enhanced by surveys within the customer base) that will foster retention, loyalty and knowledge sharing – then see where that plan leads regarding relevant solutions. In this way, insurers will tie solutions directly to customer listening instead of anecdotal conjecture. It will help to seek advice from a technology partner. Solution Provider partners are familiar with new technologies and experienced with those that work best for insurer-specific functions.
The end result of excellent communications will be higher retention. Straightforward, frequent communication across all channels will keep many customers from feeling the need to shop around on aggregator sites. They will know they are “taken care of,” a feeling that insurers should do their best to foster in every possible way.
Service Solutions Benefit From a Broad Approach
“How do our customers wish to interact with us?,” is a question that should drive insurance service solutions. In Majesco’s recent report, we found that between 57% and 63% of customers use the telephone as their primary route for communicating with their insurers. When asked how they would like to communicate, most said that e-mail would be their primary vehicle, followed by telephone, website portal and online form. For simple policy management, however, the digital numbers jumped. Between 49%-57% would prefer to use an online form or a secure online portal.
Most striking though, is that no service channel seems to be going away. There is significant interest in maintaining mail and “in-person” service. So, while insurers would like to phase in new service methods, they will still need to be maintaining the old ones. The solution lies in a service methodology shift, pushing digital service capabilities that stand to save insurers a tremendous amount of administration cost. With £8 out of every £100 of premium being used to support customer service, a savings opportunity exists with an improvement in self-service that will help insurers safely broaden their service offerings.
Unfortunately, there is still a significant hurdle. Modernisation across these technologies impacts both external, customer-facing applications and legacy admin systems. To keep administration information accessible in a real-time, omni-channel environment, an insurer is best to move away from their legacy systems as a part of an overall plan for a competitive, sustainable structure aimed at future growth.
We see organisations of all types and sizes wrestling with modernisation, its proper timing, the financing and the cost/benefit analysis. We also are seeing a tremendous uptick in organisations that realize the benefits of shared technologies and cloud-based functionality. Insurers are attempting to create a service structure that will continually provide high-level service by properly designing the interactions between the front end and the back end so that they can plug and play (and unplug and unplay) front end components. These architectures are prepared for integrations of any type with standardised integration points and common service layers.
It all sounds expensive, but once again, this is an area where a partner can lessen the pain of investment by utilising proven, repeatable designs. If every investment is measured against a litmus test of customer necessity and competitive advantage as well as time and cost savings, then an insurer can move forward into modernisation with optimism and confidence.
Building consumer relationships is all about listening, then reacting positively with meaningful changes. Today, this is best accomplished when new models of service and communication use modern technologies to give regular, meaningful touches to every customer while at the same time increasing customer access and control.