a wall of paperwork
PHOTO: Christa Dodoo

People have insurance for their home, life, auto or health, but many of these consumers find the customer experience (CX) of the industry marginal at best.

According to Forrester Research, the CX health insurers provide is among the lowest the research firm tracks, ranking 15th out of the 19 categories. “Success among health insurers means being the best of the worst,” Forrester researchers Faith Adams and William Willsea wrote in Forrester’s 2018 report on U.S. health insurer’s customer experience (paywall).

Insurers in other market segments (auto, home, life) need to improve as well.

The keys to CX quality in insurance, according to Forrester, stem from effectiveness, ease and emotion. Typically, this means having a combination of digital and human access.

“To make sustainable CX gains, insurers must become more rigorous in identifying where customers struggle, by leveraging research and insights,” the researchers wrote. They added that customer service is the most important driver of CX, but a little more than half (56 percent) of life insurance customers say they get the help they need, and sometimes insurers rely too much on technology. By contrast, 71 percent of those auto and home policy owners surveyed said they had a positive experience with their insurer’s customer service.

Insurance Struggles to Provide Excellent CX

One of the ways insurers are trying to provide improved CX and customer service is by digitizing some elements, such as signups and claims verification.

“In today’s highly competitive marketplace, delivering best-in-class customer experiences is more important than ever,” said Brooks Tingle, CEO of John Hancock Insurance. “In our industry, that means making life insurance significantly easier to buy and fun to own. When you think of it, historically that has not been the case — the life insurance buying process has been cumbersome, invasive and long and policy owners had about two less-than-exciting interactions with their insurers a year, receiving a privacy notice and a bill.”

Tingle admitted the industry, though it has improved, is still struggling to provide excellent CX, which digitizing the buying process can help provide. The company is trying to address the issue through its John Hancock Vitality, life insurance combined with a technology-based wellness that provides education, support, incentives and rewards for customers.

“With John Hancock Vitality, we’re having an average of 23 positive interactions with customers a month — from a paradigm that was one or two administrative interactions a year,” Tingle said. 

Related Article: Want Better Customer Experience? Start With Your Employees

Using Martech to Ease CX

With customers expecting seamless access to a variety of channels, incorporating martech is essential for insurance CX today, said Clark Wooten, group vice president of insurance services at Acxiom. “The rapid proliferation of channels, devices and data sources has impacted the complexity of identity resolution strategies and increases the risk of brand loyalty erosion as competition soars in this transformative climate. Customers expect carriers to deliver a seamless, omnichannel and highly personalized experience but organizational and industry obstacles, including data silos and evolving data privacy policies, create a barrier between these expectations and services delivered.”

There was a time when insurance customers were satisfied with a timely response, a fair price and quality service, Wooten added. But times have changed. Today, consumers are looking for:

  • Cross-channel personalized experiences.
  • Seamless, consistent and connected journey.
  • Data accuracy, protection, privacy.
  • Choices in buying — where, when, how and who.
  • Interaction where, when and how they want.
  • Real-time interactions and responses.
  • An experience similar to other great brands.
  • Value exchanges above and beyond.
  • Trust and honesty.

Related Article: How Leaders Turn Martech Strategies Into Tactics

Focus on Service Rather Than Selling

Customers typically have few interactions with their insurance company. In fact, without a claim or premium change, there is often no interaction at all. More than 90 percent of insurers worldwide do not communicate with their customers even once a year; 20 to 40 percent of their customer base will not receive a single communication all year, said Oliver Börner, principal business solutions manager for global customer intelligence at SAS. “Given the limited interactions, it’s imperative that insurers provide exemplary customer experience at every opportunity — and equally paramount that those interactions do not center on selling. Insurers should instead strive to become their customers’ trusted advisor."

He added that the typical insurer’s customer communications are 90 to 99 percent sales-focused and 1 to 10 percent service-focused, but the goal should be 70 percent of communications directed at serving the customer and building trust and only 30 percent aimed at sales.

A few examples:

  • An insurance company communicates in real-time sending a message about burglary in the neighborhood or the risk of a flood.
  • Faster processing of claims (many insurers now have claimants fill out forms, submit digital pictures, etc., online to speed the claim process).
  • Provide analytics to provide accurate pricing and quicker approval/denial decisions.

The above ideas are just starting to gain traction in the industry and can take some time to incorporate, but there is definitely a trend (and a need) in insurance to try to provide better CX.