In the Insurance industry, the battle to win and retain customers is getting only more difficult each year. So, what’s driving this competition? Well, it’s clearly the era of consumer empowerment – and this is forcing insurers to stay competitive by providing innovative products, aggressive pricing, and personalized customer service.
A recent survey by ‘J.D. Power 2019 U.S. Insurance Shopping StudySM, has some revealing facts about customers’ shopping behavior when purchasing an insurance policy, in this case, an auto policy.
1. Consumer empowerment puts pressure on Insurers
Insurers are forced to showcase a strong reputation and offer a choice of products and personalized services as customer expectations are high. Since only about 3% of new customers enter the market every year, the only way to grow is to retain existing customers and gain new ones from competition.
2. Drop in overall customer retention percentage
There was a 4% increase in the number of existing customers shopping for new policies in 2019. Another interesting fact was that the number of customers switching insurers increased from 31% to 35% year on year. Although the overall customer retention percentage stood at 88%, there was a 2% drop (year on year) in the retention percentage – customers are increasingly switching carriers.
3. Factors influencing customers shopping behavior …Price is the key influence
Price was the leading trigger factor for customers to shop for new insurance (64% insurance shoppers said so) and the most influential decision driver to settle on purchasing from an Insurance carrier was their competitive pricing (at 33%).
4. Brand awareness is now critical
Insurers need to be able to create a strong brand recall in the consumer’s mind to get business. Hence insurers are now focussing on strong brand building activities to create brand awareness and attract insurance shoppers when they are ready to initiate the purchase process.
What can Insurers do to stay relevant, with competition increasing?
With the consumer having multiple choices, and high expectations when they are ready to buy, insurers are left with no other choice but to provide optimized customer experience. And with the millennials presence and use of social media and other digital channels to shop and communicate, insurance carriers are moving to an omnichannel contact center, which allows them to service the prospects where they are, as well as seamlessly across the various digital and voice channels.
In addition, insurers are now investing heavily in generating awareness of their brand through social media channels and working to generate business thru digital communication channels such as email, website, mobile apps, etc.
Most insurance carriers find it hard to create these service channels from scratch and don’t wish to invest upfront. One of the easiest ways to solve for this issue is to start using third-party service providers that are proficient as well as updated in these services.
About SLK Global
SLK Global is a business process transformation enterprise offering technology-enabled solutions for the banking, mortgage, insurance, cards & payments and title insurance industry since 2001. SLK Global can help reduce operational costs by 35% – 40%, improve efficiency by 15%-20% and boost quality levels and customer satisfaction with business process management solutions and contact center services, for P&C insurance carriers, MGAs and Wholesale Brokers.
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