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Insurance firms are not yet bang on the money when it comes to customer interaction and satisfaction. The industry as a whole has lagged behind other financial service providers like banks – but change is brewing.
In Capgemini and Efma’s 2018 World Insurance Report, insurance firms are ranked third after retail and banking on cross-industry customer experience scores. The greatest difference came in the 18-34 age bracket, where more than 32% of customers said they had a positive experience with their bank but less than 26% reported a positive experience with their insurer.
Playing catch-up in digital innovation is not necessarily a bad thing for the insurance industry because there are lessons to be learned from the banks and their approaches towards technology-enhanced customer experiences.
“Insurance companies can learn from banking firms in terms of how to develop customer intimacy, how to add value, and how to make the entire contact environment more immersive and altogether more sticky,” commented Seth Rachlin, executive vice president, P&C Insurance Leader for Capgemini.
“Banks and financial services providers generally have a far higher number of customer interactions over the course of a year than insurance companies do. What they’ve done is create mobile and web applications to make those interactions as seamless as possible, and they’re offering value-added services to keep people coming back – hence, the stickiness of the interaction.”
The Capgemini report found that most customers accept digital communications at the same level as conventional channels, with more than half of customers placing a high value on company websites for conducting insurance transactions, and more than 40% considering a mobile app as an important channel.
But customers don’t just want a standard mobile app; they want end-to-end personalization. To achieve that, insurers need a digitally integrated ecosystem that interconnects insurers with customers and partners and creates an efficient flow of information and services. Developing such is not simple for an industry so heavily reliant on legacy systems.
“The legacy systems many insurers rely upon are an impediment,” Rachlin told Insurance Business. “Another lesson to be learned from the banking industry is that there’s an imperative to modernize core technology platforms in order to participate in a digital economy and provide sought after digital customer experiences. The work banks have done over the past decade to modernize and API-enable their core banking capabilities has had significant pay-off in terms of being able to provide digital experiences.”
Success requires insurance firms to marry the best of digital and traditional channels. With enhanced digital agility, insurance firms can gain greater insight into customer needs and improve time to market for innovations, while driving greater operational efficiency and cost savings, the Capgemini report suggests.
“Insurance companies have started to recognize the threat customer disconnection poses to their businesses and many have been acting upon that threat and making changes over the past couple of years,” Rachlin added. “The consumer-focus has amplified further as a result of disruption in the marketplace from the likes of insurtechs and big technology firms.”
