As competition increases, Property & Casualty Insurance carriers are looking at enhancing customer experience to win greater customer loyalty. But this is a recent change for them. The P&C Insurance industry has traditionally been slow to adopt best practices to improve customer experience, but competition and market forces are rapidly making insurers take a more customer-centric approach.
New-age customers, accustomed to customized on-demand services from service providers in virtually all other industries, have come to expect the same level of customer engagement and convenience from P&C insurers too.
Earning customer loyalty has always been one of the greatest challenges for most insurers, and today’s customers easily switch carriers in case their expectations are not met. According to a Pitney Bowes study, 20% of customers are ending their relationship with their carriers after just a year, and moving on to another insurance provider – an average retention rate of only 80%.
Meeting and exceeding customer expectations of customer service is the key to retaining customers and bringing down customer attrition rates. Analysis by Bain and Co. shows that US P&C insurers have considerable room for improvement in customer services across the value chain. U.S. P&C insurers lagged leaders in Net Promoter Score (NPS) per episode by between 20 and 40 points (an ‘episode’ consisted of all the customer-facing and back-office activities involved to fulfill a customer’s need). Most U.S. P&C insurers seem to have lower NPS scores in all five categories of insurance episodes categorized by Bain (learn, purchase, manage, review and claims) – see figure.
The analysis also indicated that customer experience goes beyond just the obvious points of customer contact, like the point of sale, or claims settlement. It is important that insurers evaluate all customer touchpoints over the entire customer journey to determine how they can meet customer expectations for an effective customer experience that will help them retain customers. Insurers should be equipped to tackle every unique request from every customer touchpoint quickly and accurately. In today’s connected world, communication mediums can include email, online chat, telephone, social media, etc., for customers to interact with their insurers. Most companies, including insurers, must now consider using Omnichannel and multichannel support for customers that integrates communication across the various channels. An omnichannel solution can provide not just a great customer experience, but can also help in boosting outreach and sales.
Setting up and managing an in-house omnichannel contact center requires time and resources. It involves substantial infrastructure and technology related expenses, and the need for a strong digitalization strategy to support integration between the various channels of interaction. In addition, the technology must be supplanted with the right agents with skills in voice, social media as well as an understanding of the industry they are supporting. And these skills come with associated costs to recruit, train and retain – adding to the operational and fixed costs of the contact center.
Most P&C insurers are now partnering with third-party omnichannel contact center service providers, rather than using in-house resources. These third-party firms have the right infrastructure in place to provide support for customer’s interactions in any part of the customer value chain while monitoring the Service Levels set up by the client. The more experienced third-party providers offer flexible pricing models that help reduce the cost of contact center operations for an insurer and also act as an extension of the insurer’s call center operations.
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