How to improve customer experience in the insurance industry  

With the global growth of the demands for customer experience, CX has become an integral part of nearly every business decision. Boardrooms across virtually all industries are busy with CX planning. When embarking on a digital transformation project, introducing a new product, or merging with a new software system, customer experience is what drives sales.  

With the advent of technologies that allow clients to interact with providers remotely, outstanding customer experience in insurance has become more critical than ever. 

Due to the overwhelming digitization, customer experience in insurance is no longer measured in isolation (vs. just other insurance providers) but rather vs. other digital service providers in general. Customer expectations drive this trend, taking things beyond the overall CX. Customers seek simplicity, quickness, and efficiency and will not accept anything less.  

A good CX strategy ensures seamless end-to-end interaction of policyholders with insurance carriers, personalized services, and omnichannel experience. It also streamlines the organizational and financial performance of businesses. Enhancing CX leads to higher customer loyalty and retention, more efficient operations, and decreased labor costs for customer support. 

Why is CX so important for insurance companies?

Today, the most resilient enterprises center their entire operation around the client. And for the end consumer, the most significant aspect of stimulating loyalty is the professional experience. According to The State of Connected Customer survey, 84% of customers feel the company’s experience is as essential as its products or services – yet there is a vast gap between customer expectations and what most organizations provide.  

Customers used to consider insurance a commodity product they had to buy based on what was offered for many years. But over the last decade, the market has grown saturated with more insurance products and possibilities, resulting in a more intelligent customer with varying requirements and desires. To address these evolving expectations, insurers must be more agile, work quicker, and prioritize superior CX. 

Insurance firms encounter several complications, such as personalization and integration. 88% of insurance clients choose highly customized services. They are also keen to accept integrated products (for example, house, life, and vehicle insurance with a single premium), demonstrating the value of seamless experiences. 

A McKinsey survey found that 70% of consumers hinge on their assessment of a company on the quality of its customer experience. According to a second McKinsey analysis, CX leaders in the insurance market are 80% more likely to retain clients and have two to four times the increase in the value of a newly launched business. 

In the survey by Forrester, health insurance scored the lowest in terms of CX out of 19 categories, with automobile, home, and life following closely after. This is hardly surprising considering that just 1-10% of a typical insurer’s client contacts are about their services, with the remaining 90-99% focused on sales. Insurers must reconsider their strategic position in terms of customer experience.  

Although sales calls are still crucial for converting leads, insurance businesses increasingly embrace the digital experience, the World Insurance Report says (Capgemini – EFMA). According to the report, “tech-savvy” clients who are more familiar with emerging technologies prefer digital methods and tools.  

The same goes for people aged 18 to 34. A Gartner survey found that more than two-thirds of marketers responsible for customer experience think their firms compete primarily based on the level of CX offered. In the same research, 81% predicted they would compete almost solely at the level of CX within two years. 

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Insurance customer experience challenges

Challenge 1 — Creating an omnichannel ecosystem 

The biggest challenge for insurance companies in creating an omnichannel environment is uniting various channels into one system, providing similar and consistent CX. Another problem is that most insurers still use legacy systems. The integration of new solutions with legacy systems is a resource-intensive process. Speaking about other issues, it is worth mentioning security — omnichannel environments require robust security measures to protect sensitive customer data.     

Challenge 2 — Developing highly customized solutions 

The key challenges associated with building highly customized solutions for insurance include the complexity of integrating data from various sources and maintaining its accuracy, complying with regulations, supporting the dynamic needs of personalized products, and educating customers and employees about the advantages of tailor-made solutions.  

Challenge 3 — Modernizing legacy systems 

The transition from legacy systems to modern platforms can lead to service disruptions. Customers may experience delays, errors, or temporary unavailability of services during the migration process. Managing these disruptions while maintaining a positive customer experience is a significant challenge. 

Searching for new ways to improve CX? Check out our solutions.

Three insurance customer experience trends to consider in 2024

Trend 1 — People are open to use digital channels 

According to McKinsey’s survey, 20% of customers use digital channels for account modifications, interaction with an insurer, and online payments. However, not all are satisfied with available means of interaction.  

Trend 2 — Employees are becoming more satisfied after CX transformations 

Agents and insurer employees become happier with improved CX as their work is also automated, processing times are decreased, and cross-sell and up-sell jobs can be done inside the channels.  

Trend 3 — Customers like simplified product distribution 

Insurance products are sometimes too complex to understand and compare. So, customers want more transparency in learning about different insurance options.  

How to align your business processes with CX 

Implementing a customer-experience (CX) change may be stressful. Many executives are reluctant to begin because they are intimidated by the numerous hurdles of implementing transformation across practically every division in the organization. However, it is this hesitancy that generates actual dangers for the company.  

The positive aspect is that there is now a tried-and-true method to improve customer experience. According to McKinsey, it consists of precise phases spread over three fundamental building blocks:  

• A clearly stated vision and purpose 
• An agile transformation methodology and deliberate deployment of new capabilities 
• Sophisticated analytics

Companies may get a competitive edge by integrating all three building pieces. 

Step 1. Define what CX your customers expect  

The first step in achieving a successful customer-experience transformation is to agree on a clear description of the sort of experience you intend to provide. A good CX aspiration fulfills the company’s mission and brand promise.  

Companies then transform their objectives into expected commercial value by identifying the particular changes in client behavior that they anticipate. Even if consumer demands change over time, they prioritize the experiences leading to expected customer behavior. After prioritizing the experiences with the highest potential to influence consumer behavior, CX leaders identify the internal procedures and technological capabilities required to rethink them significantly. 

Learn more about life insurance software product development process

Step 2. Transform your business 

While CEOs frequently create extensive CX-transformation roadmaps, many fall into the trap of adopting business-as-usual programs to accomplish the necessary change. Customer experience efforts at the most successful organizations look and feel radically different. These businesses form agile, cross-functional teams with genuine project ownership, extensive technological competence, and a culture of design thinking and continuous improvement.   

These aren’t frills for firms that are dedicated to a CX culture. They reflect a considerable investment in hiring and growing agile teams with solid experience in design knowledge, establishing cutting-edge omnichannel platforms and technology, and reinventing the experiences, goods, and services that best deliver on the brand promise. 

To develop client personas and understand customer demands, cross-functional agile teams conduct rapid-fire quantitative and ethnographic research using design thinking and sophisticated analytics toolkits. Once new goods and services have been produced, these agile teams ensure they are expanded across the business, integrated into the technological platform, and constantly tested and enhanced across segments and regions.  

Another critical component of all successful CX transformation programs is a central team that combines ideation tools and methods and continuously conducts both generative and evaluative customer research. It brings together cross-functional experts with specific expertise, such as scrum masters, omnichannel technology architects, designers, and researchers.  

Step 3. Facilitate transformation 

Executives who have effectively adopted new customer experiences maintain the improvements by focusing on the following fundamental aspects. 

1. Customer-centric mindsets. Employees must be assured they have the abilities and resources to provide the most excellent possible client experience. Leading firms create academies that mix digital courses, live workshops, and continuing nudges to help employees gain new skills.  
2. Integrated technology base. Businesses require an arsenal of technologies that covers the whole organization to provide excellent multichannel customer experiences. It frequently takes the form of a digital platform built around microservices and APIs to offer various services to customers quickly and flexibly. It can also be an omnichannel contact-center platform with call recognition, chat, video chat, and email management. Or it can be a single all-in-one system. For instance, a health insurer that wanted to reinvent its customer-onboarding experience undertook two parallel workflows: one that redesigned and streamlined the whole enrollment process and another that rebuilt the underlying technology. 
3. Flexible operational framework and governance structure. Innovation teams can only be effective with decision-making autonomy. This means building agile decision-making processes and delegating formal decision-making authority to team leaders. These new methods and decision rights sometimes necessitate internal negotiations yet provide amazing outcomes. 
4. Predictive analytics and machine learning are used to power a performance management system. Leading providers are already leveraging predictive analytics, machine learning, and big data to overcome the well-documented limits of customer feedback, which frequently delivers an incomplete and misleading picture of real customer experiences. At the very least, companies require sophisticated feedback loop management systems that teach employees which behaviors provide the most significant outcomes and instruct innovation teams on where to focus their efforts. Based on their previous experiences, the most excellent solutions enable businesses to estimate each customer’s contentment and future spending precisely.  

Bringing these essential components together has the most long-term influence on customer experience in insurance industry.   

You might be interested in our article on how to build insurance policy management software.

How to improve CX in insurance

We studied hundreds of tactics and identified the ones that can change CX initiatives and create actual growth in our current business climate below.  

Highlight the value of customer-shared data 

Improving the insurance customer experience digitally relies heavily on having correct data to solve requirements and difficulties. As the foundation of their CX activities, insurers should prioritize data collection throughout all client-related procedures, including purchasing, renewals, and claims. Insurers may offer more personalized insurance plans and experiences if they can access the relevant data at the right time. This boosts trust and the possibility that consumers will willingly give more data in the future. 

Furthermore, insurers should explicitly welcome consumers to share data across all interactions and make it as simple as possible for them to do so. Customers, for example, are more inclined to contribute more information if they are not compelled to repeat it. By pre-filling previously collected information, you may focus on increasing the understanding of your consumer by requesting new data. 

The data that is accessible in-house may be mined and supplemented using open data platforms and customer-centric analytics to develop insights, analyze trends and behaviors, and identify buyer values and factors, among other things. 

Lastly, including research methodology into experience design and providing feedback choices to capture real-time sentiment at crucial decision points throughout the insurance journey are critical to developing the most accurate knowledge of a consumer. 

Automate quotes 

Customers who browse for quotations online want a quick and easy search. Digitizing the whole quote-generation process boosts client satisfaction dramatically. What often strikes out is the ease and the ability to complete the entire procedure online in real time. When requesting personal information from clients, the CX’s aim should always be to simplify the process and reduce the time it takes to complete it. 

Minimize anxiety during the purchasing process 

Prospective clients need help with the complex and confusing terrain when obtaining business insurance. 92% of business service purchasers report feeling stressed during the purchasing process. The competitive distinction between service providers is thin, and purchasers are more risk apprehensive than ever after COVID-19.  

Fortunately, your CX program may assist prospects in navigating these difficult times. Requesting recommendations from satisfied customers discovered in your CX program can provide other prospects with purchase motivation. 

Testimonials, the second most convincing resource purchasers utilize during their purchase decision, may be obtained straight from your CX project to boost company development efforts and provide reliable proof of your service. Similarly, satisfaction scores and online ratings can help to alleviate buyer concern and be more compelling than your own sales and marketing materials, as well as your website. 

Enhance online presence 

Customers don’t simply buy items or services; they also invest in a particular brand and the experience it provides: A positive customer experience increases loyalty and income. Customers want a similar experience whether they connect in person, on social media, on mobile devices, or with online applications. If your online presence lags, it may greatly influence how a customer perceives your company. 

Create sophisticated workflows for the agent as well as the policyholder 

Insurers are beginning to recognize the advantages of revamping their systems and processes and creating intelligent workflows that combine data with AI, straight-through processing, automation, and other techniques to incorporate exponential technologies at every process stage.  

Integrating operations across organizational boundaries empowers staff and helps consumers to feel recognized, get speedier service, and receive insurance refunds or claim payments immediately. Furthermore, automating operations might generate novel ideas for company value. 

Touchless handling of claims is an example of an innovative approach to managing a claim from the first notification of loss (FNOL) to settlement with little to no human intervention.  

The bottom-line potential of fully automated claims in business vehicle insurance is very attractive. Although claims and losses are very high in this industry, one of the most practical methods to achieve revenue and optimize the customer experience is to improve operational efficiency and link companies from end to end. 

Thinking of claims automation?

Learn more about custom insurance claims management software.

Integrate AI insurance chatbots 

According to the analysis by Cognizant, “the evolution of chatbot technology will force a total reimagining of insurance” during the next decade. Customers want prompt and accurate replies. Chatbots eliminate bottlenecks and provide real-time answers to frequently requested topics.  

It’s worth noting that insurers spend an average of $124 million per firm on artificial intelligence. This significant investment is due to its multiple features, including the ability to optimize risk modeling, automate claims processing, and streamline customer relations. 

Some of the primary advantages of insurance bots are as follows: 

• Insurers can provide round-the-clock assistance in the form of a virtual assistant. Browsing a web page is frequently a one-way, static engagement. A chatbot may offer an additional level of interaction. 
• Bots can help employees use their time more productively by doing monotonous and time-consuming tasks. 
• Customers may be guided from quote to sale via chatbots. Providing this seamless experience is only one of the reasons why 79% of insurance executives believe AI will transform the way businesses deal with clients, according to Accenture. 

For example, the IFFCO Tokio General Insurance Company sought to enhance its claim processes after discovering that up to 30% of its clients were dissatisfied with the assessment of their claims.  

The insurance company built an AI-based Claim Damage Assessment Tool (CDAT), which assesses car damage from photographs uploaded by clients via an app using powerful computer vision and deep neural network-based algorithms. IFFCO Tokio General consumer claims were handled in 15 minutes instead of 3 to 4 hours utilizing AI, and processing expenses were reduced by 30%. 

Learn more: How to build a chatbot for insurance

How we can help you 

There are enormous opportunities for insurers to stand out from the pack by placing a strong focus on outstanding CX. We hope the above tactics give you fresh ideas for thinking about (and assessing the effectiveness of your company’s CX project! Don’t hesitate to get in touch with us if you’d want to discuss any of them. We’d be pleased to share more about our approach to CX strategy for insurance businesses, information about our study, or how We may assist your company in elevating its CX program.  

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