Insurance is generally considered "low-touch" industry, continuing to fall short when it comes to engaging with consumers. Unfortunately, a single event - such as a poor claims experience or billing problem - is often the catalyst for policyholders to switch providers, creating a commoditized market and eradicating any sense of brand loyalty.
It's not all doom and gloom, however. Organizations can vastly improve customer engagement and reduce churn by implementing key strategies in the following areas:
The cornerstone of customer engagement, personalized messaging allows insurers to connect with their policyholders on a more visceral level. When customers are empowered to participate in the process - even something as simple as selecting their preferred communication channels - they feel valued and engaged, which can increase retention and persistency.
Personalization requires a holistic view of the customer, which can be obtained through data analysis. To start, insurers can analyze policyholder data from their own company databases, allowing them to set up communication workflows to generate relevant messages for specific groups. Broadening the scope, companies can use robust analytical tools to source, collect, scrub, validate, and organize consumer data to create a foundation for a solid engagement strategy.
Armed with the right information, insurers can create targeted promotions, marketing campaigns, and other communications to reach consumers who are most likely to respond favorably.
In a highly commoditized market, insurers are finding it difficult to differentiate themselves from the competition. Given the sheer quantity of choices, people often make insurance-buying decisions based entirely on price. However, many insurance companies are finding success by expanding product offerings to include modern solutions that resonate with today's consumer.
For example, insurers can design policies to meet the unique needs of gig economy workers. Or update traditional products to reflect changes in technology, such as autonomous vehicles and smart-homes. Some insurance companies have created an ecosystem model, partnering with other businesses to offer increased value to their policyholders. Some examples include credit monitoring, cybersecurity services, and multi-policy discounts.
Digitalization and Automation
Digitalization allows insurers to improve engagement by automating a variety of key functions, making the customer experience as frictionless as possible, while at the same time reducing the risk of human error. Today, many insurance processes can be automated, from quotes to claims, and everything in between.
As the most frequent interaction between insurer and insured, the payments experience is a particularly valuable touch-point for both automation and personalization. Providing seamless, more flexible payment options engages policyholders, allowing them to set up auto pay and installment plan options, along with the ability to make secure payments through their preferred methods (e.g., credit card, ACH, debit, etc.) and channels (e.g., phone IVR, email, text, etc.).
Claims provide another high-impact engagement moment that can benefit from automation. Many insurance companies already use digital claims reporting, and some employ high tech solutions for investigations and analysis. The newest opportunity in insurance automation is the claims payment itself. Digital claims payments offer a unique opportunity to deliver a positive customer experience for people who are depending on that settlement payment to resume their lives after a loss.
Automated processes, along with personalized messaging and products, have the power to improve the overall customer experience. With the right engagement strategy, insurers can build stronger relationships with their policyholders, increasing loyalty, retention, and persistency.