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Response Tap's Ross Fobian on how the insurance industry can deliver better customer experiences

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Ross Fobian, CEO of Response Tap, looks at how the insurance industry, while it's one of the most competitive and commoditised sectors there is, still doesn’t appear to have fully embraced the value of customer experiences.

A recent Forrester study looked at the potential increase in revenue for businesses from improving the customer experience. For one of the industries surveyed it predicted that even a one-point improvement in customer experience (on the Forrester satisfaction scale) could result in more than $1bn in additional revenue. But for the insurance industry there remains a number of hurdles to overcome before realising these benefits.

Moving from commodity to value

It’s no surprise that the insurance industry has struggled with improving the customer experience. Insurance policies are complicated, there’s no getting around that. Policies are legal contracts that need to be fully understood by the consumer. But for many customers, buying insurance remains a box-ticking exercise, often carried out last-minute – anyone working in travel insurance will know just how last-minute. In an industry where regular and valuable contact between consumer and business is rare – research by Consumer Intelligence says that home and car insurers only interact with their customers once or twice a year – creating a superior experience for those fleeting interactions is even more important.

For any major changes to occur, the reputation of the industry needs to shift from being a commodity to a valued experience.

Build with the user in mind

Another challenge insurance providers face is how they can ensure that their processes are designed with the end user in mind. Many online quote building processes, for example, have been criticised for being cumbersome or for not enabling customers to get to the point of purchase quickly or easily enough.

Frustrating interactive voice response phone systems, if customers want to ring up to clarify something, also add another barrier to building loyalty. Insurers need to find ways to build stronger relationships, without purely relying on lowering the price of a policy.

One way to do this is by making the customer’s path to purchase as slick as possible, and more personalised to their needs in the same way they experience (and expect) this in other areas of their lives. This has to start with how customers want to buy their insurance policy before insurers can personalise the experience on offer.

In a recent survey of 1000 consumers who had purchased insurance in the past year, 55% said they had bought insurance over the phone. This wasn’t because they wanted to get a lower price. More than 60% of those who used the phone wanted to feel reassured that the policy they were buying was accurate and suitable for their needs. And young people were the most likely to have bought a policy in this way; 70% of 18 to 24-year olds had bought insurance via an insurer’s call centre in the past 12 months. This is where a huge opportunity lies, for insurers to nurture relationships with that generation to foster loyalty for years to come.

With these stats in mind, the answer to improving the customer experience isn’t necessarily to optimise the digital journey and streamline it. Listening to your customers, and talking to them, could be the differentiator but only if the age-old frustrations with phone calls – clunky IVRs, long wait times, having to repeat all your details to the call handler – can be alleviated.

The value of a good conversation

If policies are complex, it makes sense that the phone call as a conversion channel is the easiest way to allay any concerns people may have when it comes to something so important. This is especially true if the needs of the consumer aren’t straightforward.

We know that improved customer experience can increase revenue. Returning to the survey, 40% of the 1,000 respondents said they would pay between 5% and 25% more for a policy if the experience was as quick and easy as buying online. The signs are that nurturing the phone call as a premium sales channel in this industry could see insurers reap big rewards. With businesses now using the latest technology to route calls to a relevant specialist and bypass IVRs altogether, there really is no excuse for phone calls not to be as slick, and personalised, as their digital counterparts. Once this is embraced by the industry, providers will realise the full joy of the customer experience. 

For more on this topic visit: The joy of CX: Why better customer experience has so much appeal for the insurance industry.

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