We all recognise it from our own lives as consumers. Thanks to the likes of Amazon and almost every other successful online retailer that is following in their footsteps, we expect 24/7 access to our product and service providers. Our lives are getting busier and busier. We don’t have time during the business day to sort out our shopping, appointment bookings or filing an insurance claim. So, we need to handle all of this in our spare time online.
According to the 2017 World Insurance Report, nearly three-quarters (74.8%) of tech-savvy customers place importance on the ability to send claim notifications to insurers online or via mobile. And nearly 70% of Gen Y customers value the ability to digitally renew or cancel policies. For several years now, meeting and exceeding customers’ expectations has been vital to attracting new customers and keeping them from switching to the competition.
And the trajectory continues as consumer expectations rise. In an Accenture consumer study from 2015, 47% of respondents said they wanted more online interactions with their insurers. Fast forward to 2019, and a similar study from Accenture finds that insurance customers want better interaction across physical and digital channels. That means their expectations have gone beyond being able to sort basic services online. The same study found that personalisation of offerings and experiences is likely to be a highly valued differentiator.
2019 Accenture Global Financial Services Consumer Study
Self-service is critical to an optimal holistic customer experience. In the insurance industry, personalisation, convenience and level of service are expected by consumers – these are the key ingredients of a good customer experience. As we discussed in the first blog, customer retention has become a high priority for many insurers. By meeting and exceeding customer expectations through self-service, insurers can improve retention.
While customer retention strongly affects insurers’ bottom lines, new customers are essential to maintain a steady pace of growth and build a competitive edge. But customer acquisition in insurance is extremely pricey. “The insurance industry has the highest customer acquisition costs of any industry. It costs seven to nine times more for an insurance company to attract a new customer than to retain one.”
Excellent self-service is the link between retention and acquisition. When services exceed expectations, loyal customers are more likely to speak highly of their insurance company. And word-of-mouth marketing is, of course, the cheapest form of customer acquisition.
A faster, more seamless claim process has become a differentiator in the industry and key to a good customer experience. Through new capabilities in self-service claims, the consumer no longer waits days for an estimator to take photos; the extent of the damage is knowable at first notice of loss (FNOL), and vehicle damage photos facilitate speedier decisions to be made about the claim.
A speedier claim process not only delights the customer, it also brings cost savings to insurers. Without the need for insurance agents to manually intake claim information, process it, and find time to follow up with customers, staff can focus directly on verifying that a claim is legitimate and push it along to the next steps in the process. For example, a cognitive computing product was able to save one insurance company “up to 53% for FTEs (full-time employees) and warranty management activities: another customer saw cost reductions of 30 to 60% for email management and quote processing.”
Part 1 – The importance of self-service and time-to-market
Part 2 – How boosting efficiency can improve the customer journey and cut costs