2018 presents some big challenges for the motor insurance sector, not least of which is the General Data Protection Regulation. James Roberts, business development director for insurance at Europcar UK Group, believes partners can help insurers here.
Much time and resource is already being devoted to ensuring businesses are prepared – and compliant – with the new regulations. And the insurance sector is top of the charts, according to recently released government data, in terms of awareness and preparedness for the GDPR to come into force on 25 May.
The government research, which surveyed businesses and charitable organisations, found that firms in the finance and insurance sector have the greatest awareness of GDPR at 79%. The information and communications sector comes second at 67%, followed by education at 52%.
Businesses in the financial and insurance sector also topped the table in terms of already having made changes to comply with the new regulation, at 54%. This is significantly higher than the average of 27% across all UK businesses surveyed. Perhaps surprisingly, given the wealth of customer data held by retail and wholesale enterprises, only 13% of organisations in this sector have already made changes.
With the insurance sector appearing to be well focused on being ready for GDPR, the challenge now is how to ensure this doesn’t mean businesses lose sight of the customer – and more importantly – the customer experience.
The insurance sector has a good track record. The 2017 Customer Satisfaction Index, published by the Institute of Customer Service, revealed that the insurance sector in the UK achieved a 0.7 points rise in overall customer satisfaction – increasing to 79.4 out of 100 – which is above the UK average.
However, the ICS report also revealed that there was a sizeable drop in the Net Promoter Score for insurance companies. This suggests that it is becoming harder for insurance brands to earn customer advocacy, and this is particularly important in the context of how customers are responded to when things don’t go to plan.
According to the 2017 ICS report, 62% of insurance customers said that they had to put more effort into dealing with organisations than they did in the previous year. The ICS, therefore, suggested that insurers need to think about how they respond to customers across all channels – from the call centre to email, text and apps – with a need to work harder on consistency as well as demonstrating greater empathy to the customer issue.
A fundamental component in achieving this goal is empowering different departments within an insurance organisation to work together and talk to each other in such a way that the customer experience is, at the very least, not undermined, and ideally is enhanced. But, for established organisations working with legacy systems and processes, this isn’t necessarily easy to achieve. The objectives of different departments can also conflict, creating a disconnect, not only between departments, but between insurers and their suppliers.
To overcome these problems, insurers could have more confidence in their partners who, I believe, can play a fundamental role in helping insurance businesses work better within their organisations and, therefore, deliver a better customer experience. Partners can bring new processes and technologies, without requiring insurers to make significant internal investment or process changes. And partners with a good understanding of the insurer’s brand values can enhance the customer experience simply by doing their job, enabling insurers to eliminate some of the friction that often adds cost to the claims process, instead achieving a positive claims experience for everyone involved. And that has to be good news for overall customer satisfaction.
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