Insurance Customer Experience: 6 Signals Your Company Needs It

Most insurance companies find it challenging to attract and retain new customers, especially given that, traditionally, insurance has been a low-touch industry—insurers seldom interact with policyholders. According to a recent study by the Independent Insurance Agents of Dallas, insurance companies have an 84% customer retention rate compared to 93-95% of top companies in other industries.

But with the recent technological advancements and the introduction of digital platforms, insurance companies can now better engage with their customers and provide personalized services. Even so, that doesn’t necessarily mean that all insurers are effectively engaging with their customers.

In this post, we’ll walk you through some of the red flags that indicate your insurance company’s customer engagement strategy isn’t working. But before we get to that, here’s a brief overview of what the customer analysis model is and how it impacts customer engagement.

What is the customer analysis model?

A customer analysis model incorporates both qualitative and quantitative research methods with the aim of better understanding the customers. When insurers know what makes their customers tick, they’ll be better placed to provide them with services that cater to their specific needs.

Customer analytics solutions are like tides that lift a boat: insurers can create better insurance products with better marketing campaigns, the sales team can come up with better pitches to convince potential clients, and product development will know which products individual policyholders need.

Typically, customer analysis undergoes the following processes:

• Identifying who potential clients are—in this case, policyholders
• Discovering what their needs and pain points are
• Grouping customers based on their traits and needs
• Creating a profile of the potential policyholders

For the customer analysis process to be effective, insurers need to actively engage with customers to understand their pain points and what products and services they need to solve their problems.

6 Red Flags of Poor Insurance Customer Experience

Here is an outline of the red flags that an insurer needs better customer engagement:

1. Decrease in policyholders 

Just like in any other industry, the number of policyholders an insurer has increases when policyholders find value in the products offered by the insurer, and the insurer effectively engages with them. Otherwise, an insurer is likely to experience a decrease in the number of policyholders.

When insurers frequently and relevantly engage with their customers, they are more likely to find value in the products of those insurers and therefore retain them. Among other things, insurers should provide their customers with relevant information, such as the existence of new products. By consistently delighting them, engagement can help insurers win over new customers, or at the very least, pique their interest. In short, engaging customers serves as an excellent route for insurers to grow the number of policyholders.

2. Long purchase cycles 

Customer engagement needs not only come into play when dealing with existing customers. Rather, it should also be used in improving sales cycles and converting prospective customers into policyholders. A long purchase cycle means that an insurer’s customer engagement strategy isn’t effective. They are not actively or relevantly engaging their customers to convert them into buying customers.

When the customer engagement process is planned and executed well, it can be an excellent tool for stimulating prospective clients to give your insurance company a shot. There are numerous opportunities to tap into, whether it is educating or informing prospects about the insurance products on offer, addressing their needs, or establishing yourself as an authority in the insurance industry.

3. Decline in customer retention and increase in churn 

Customer engagement plays a significant role in the total revenue a company makes. An increase in churn and a decline in customer retention are telltale signs that an insurer is not properly engaging with customers.

According to research by Bain & Company, a 5% increase in customer retention can produce more than a 25% increase in profits. This data underscores the importance of all companies, including insurance companies, in focusing on retaining their customers. And whereas there are endless strategies employed by various insurance companies to help retain customers and reduce churn, the surefire way of achieving this feat is by devising a systematic customer engagement roadmap.

4. Lack of cross-selling and up-selling opportunities 

When you analyze the data you collected from your customer engagement campaigns and discover that it does not indicate the behavioral attributes of the customers, then it is likely that your customer engagement strategy isn’t effective.

Data collected from insurance customer engagement campaigns should be able to help insurers figure out what works for each customer segment and their behavioral attributes. This will help insurers better shape and personalize customer recommendations and target cross-selling and up-selling offers accurately. This will also help insurers to deliver more intelligent and relevant recommendations that can be appreciated by policyholders.

5. Weak customer relationships 

While the insurance industry was reluctant to capitalize on the growing internet penetration, over the years, more and more insurance companies have adopted the use of the internet in their operations. However, one aspect that most insurers haven’t mastered is the art of building sustainable, long-lasting relationships with their customers.

Effectively engaging customers is pivotal in helping insurers connect with policyholders in a way that makes them want to continue taking insurance coverage with them. Insurers who engage customers across various channels and touchpoints are more likely to form stronger relationships with their customers. Regularly interacting with customers about what’s relevant to them helps insurers provide products that not only appeal to them but address their pain points.

6. Negative customer feedback 

One cannot really undermine how vital the quality of service impacts the image of a business. For most customers, engagement is one of the most important aspects of customer engagement. And when they feel like they are not properly engaged, they may give negative feedback. This can hurt an insurer, especially since, nowadays, most insurers look at reviews before deciding to work with an insurer.

By actively engaging customers across channels, insurers can address any concerns about the quality of services before dissatisfied customers use them to hurt the image of the company.

PilotBird can help improve the customer engagement of your insurance company

As opposed to previous years, customer engagement is now a vital component in the success of an insurance company. Suppose you’ve noticed any of the above issues with your insurance company’s customer engagement campaign, then it’s time you tried out PilotBird’s solution. To see for yourself how predictive analytics, machine learning, and customer analytics solutions can improve your customer insurance engagement, contact PilotBird for a free demo.

Sources 

Thomas, L. (n.d). The Independent Insurance Agents of Dallas: Customer Loyalty and Retention Primer. https://www.iiadallas.org/page/75

Wertz, J. (2018, September 12). Don’t spend 5 times attracting new customers, nurture the existing ones. https://www.forbes.com/sites/jiawertz/2018/09/12/dont-spend-5-times-more-attracting-new-customers-nurture-the-existing-ones/?sh=2cceb9305a8e