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With a significant shift towards buying insurance online, Sam Barrett looks at the ways that consumers can come away with a more positive experience" and how clicks can transform into sales.

The internet has revolutionised the way insurance is sold. According to research conducted in 2008, on behalf of digital consultancy Foolproof, 93% of people use the internet to research insurance, up from 82% in 2006. Also 76% say they intend to buy their next policy online, compared with 58% in 2006.

However, while there is this shift towards using the internet to buy insurance, not all consumers are happy with their online experience. For example, in its 2006 survey, Foolproof found that 94% of visitors to insurance websites had experienced a problem and, although it didn't collect this information in its most recent survey, its figures on quote completion rates indicate all is not perfect. Only 76% of quotes were completed in 2008, suggesting that one in four people experienced difficulties.

Foolproof's managing partner Tom Wood adds: "Insurers are improving their websites but not as quickly as they should be. On top of this, customer expectation has increased dramatically. A few years ago the customer would have blamed themselves if something went wrong when they were online but now they'd blame the insurer and leave the website. The insurance industry has got to stop looking at the internet as a low-cost distribution channel and see how powerful it can be."

All manner of problems can occur online that turn customers off. Error messages, broken links and sites being down are major stumbling blocks. However, as well as problems with the technology, the way websites are put together can also lose customers. For example, badly phrased questions, lengthy information-gathering processes and a lack of flexibility with regard to quote parameters, such as the level of cover or the size of the excess, can frustrate customers.

These frustrations are bad news for business. "Customers that experience these types of problems won't call you," says Geoff Galat, vice president of marketing and product strategy at customer experience management solutions company Tealeaf. "If they have a problem they'll leave the site. This means it's essential that companies do what they can to reduce these types of problems."

Many insurers claim to be working hard to get to grips with their customers' experiences and make improvements to their sites. Analytical tools, such as Tealeaf, Foolproof, Nice Analytics and Google Analytics, are the commonest ones employed to examine where things are going wrong. These provide data on site usage including: volumes of traffic; how many error messages a customer sees; where they drop off; and where sites clog up.

This can provide a useful insight into customer activity and allow insurers to improve their sites. For example, when HBOS General Insurance relaunched its website in October 2008, it used analytical software to get a picture of its users' activities. Lee Farringdon, its head of digital products and marketing, explains: "This allowed us to track customer behaviour and refine our site. As an example, when we launched we were offering customers £50 cashback if they bought online but the analytics showed that rather than increase sales, we were seeing a rise in the numbers dropping off at this point. Further examination showed that this was because there weren't enough reminders that the eventual price would be lower. We made this clearer and subsequently saw a 15% increase in throughput."


Using analytics

LV has also used analytics to improve its customers' online experience. One tool that it has found particularly useful is a heat map. This records the click density and where on a page customers are clicking. Paul Wishman, group e-commerce director, explains: "This enables us to see whether our pages are being used in the way we expected. For example, if we put a message up and customers aren't clicking on it when they're supposed to, then we know we have to redesign the page."

As well as tracking where customers are clicking on a site, some insurers are taking their web analysis a step further with Tealeaf, which is used by many of the insurance websites" including Moneysupermarket, Kwik Fit Insurance and LV.

Graham Donoghue, managing director of Moneysupermarket, explains the benefits it brings: "Tealeaf records every session, so we can replay it and see exactly what customers did. Analytics are useful but this gives us real transparency."

For example, to gain a better understanding of what its customers do online, staff in Moneysupermarket's call centre will contact customers who experienced a problem. They then run through the session with them to see what happened, which not only gives the aggregrator insight into where improvements can be made on the website but helps to create a bond with the customer.

Annie McRae, online operations and planning manager at Kwik Fit Insurance, also advocates this. "As well as enabling us to track customers' online experience we also use it to test functions before they go live. This enables us to keep live defects to a minimum," she explains.


Usability sessions

As well as analysing data, speaking to customers is an important part of getting the online proposition right for many insurers. More Than runs usability sessions with customers at least once a quarter. Pete Markey, marketing director, explains: "Consumers are always changing so you need to speak to them regularly to get an idea of what they want."

The internet also allows insurers to interact with customers in other ways. Online surveys are a common way of finding out what customers think about a website or product, although they are not without their problems or limitations. Lengthy surveys are rarely completed and insurers can find they only get responses from the very satisfied or very dissatisfied customers.

Rather than relying on the telephone or surveys, live chat, where an online customer is able to interact with a company agent, is becoming increasingly common. Mr Wood explains: "This was first introduced about five years ago but it was very clunky and expensive so it disappeared. It's had something of a renaissance though, as the technology has become cheaper than using the telephone and customers are used to chat in other formats" such as messenger services."

By way of illustration, customers at LV can elect to start live chat or the agent can step in and offer the chat facility if they see someone is having difficulties. "It's made a huge difference to our satisfaction and conversion rates," claims Mr Wishman. "Among customers that engage in live chat, conversion rates are double those of customers that don't. Additionally, we find that more than 50% of customers will complete a survey when they've had help, with more than 90% saying they're either satisfied or very satisfied."

Insurers are also getting smarter about incorporating online and offline functionality. As well as calling online customers to gain an insight into any problems they might be experiencing, some insurers are calling customers who requested a quote to see whether they can convert it to a sale.

Andy Watts, director of the insurer division at software provider SSP, says this can be particularly successful. "The normal conversion rate is less than 10% for online sales but one of the direct insurers we work with has managed to get more than 25% of its customers to buy as a result of phoning them after they've been online for a quote," he explains.

In addition to being able to tap into a warm lead, using the information gathered from the internet can also push sales up further. Mark Ingleby, business development director for financial services at customer management company Vertex, explains: "By using the information you gather on the internet you can build up a profile of your potential customer. Then you can call them and use this to fine tune the offer you make them, which makes them much more likely to buy."

As well as driving up conversion rates, a sophisticated website can give the insurer valuable feedback about what customers want. Mr Ingleby explains: "The online channel can be a really good early warning system. For example, you might see an increase in the number of people looking at large excesses, which could indicate that there is a demand for you to add higher excesses to your products."

This information can then be used to inform product design, either across the board or for online propositions only.

But, although the insurance industry might be taking steps to improve its offering, there is a lot more to come. Greater personalisation is being explored as a means of engaging the customer and improving conversion rates. Mr Wishman explains: "If someone comes through Google you can take the search terms to customise the pages they see. We're doing this at the moment with a handful of images but it's a concept that could be extended further."

For example, he says that younger customers often want a quick quotation service that delivers a cheap price while older customers want reassurance that they're buying from a reputable company. This could be built into the customer's online experience.

The way insurance websites have developed across the Atlantic also gives an indication of where the UK is likely to go. Mr Galat says the US insurance sector is very focused on the customer experience. "In the US, there's a lot more focus on creating a 'stickier' relationship with the customer. This has meant that as well as sales, more complex processes such as managing claims and mid-term policy adjustments have been brought online."

Putting these processes online has a number of advantages. As well as reducing the cost to the insurer it also builds a much stronger relationship with the customer. "Although the customer is doing more of the work, and saving the insurer money, they feel they are getting a better service," says Mr Watts. "If an insurer can build a rapport with their client above and beyond the annual renewal this creates a much stronger relationship."


Mobile technology

Another influence that is likely to cross the Atlantic is the use of emerging forms of technology to enhance the customer experience. As an example, Mr Galat says that some insurers have developed applications for mobile technology, such as the iPhone, that customers can use as part of the claims process. "If a customer is involved in an accident, the application will talk them through the information that's required, getting them to take various photographs that are all filed with the insurer," he explains. "This speeds up the claims process, giving the customer a much better experience but also reducing the costs for the insurer."

Getting it right and staying ahead of the internet game is essential. As technology develops, customers expect more from their online experience. Failing to deliver this can be business suicide, as Mr Donoghue explains: "Customers will vote with their fingertips and they're only ever one mouse click away from your competitors."

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