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Is Trust the Biggest Issue?


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It probably goes without saying that improving customer satisfaction is a challenge for any business. From delivering consistency across all channels, to keeping up with a rapid pace of technological change and an increasingly demanding customer base, the road to transformation can appear daunting to most. But to insurance providers, the challenge can seem even greater - whether it's dealing with a lack of opportunity to engage with customers or with what is arguably the biggest concern: trust. We explore the reasons and the possible solutions when it comes to the T-word for insurers looking to transform their service.

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Is Trust the Biggest Issue?

  2. 2. t probably goes without saying that improving customer satisfaction is a challenge for any business. From delivering consistency across all channels, to keeping up with a rapid pace of technological change and an increasingly demanding customer base, the road to transformation can appear daunting to most. But as the upcoming CX Insurance event will highlight, the challenge to insurance providers can seem even greater. In the land of the blind… Not only are the common CX hurdles difficult to jump, a vast amount of companies remain in the dark when it comes to understanding their own levels of success or even the perception the public has about their brand. According to a recent study undertaken by Bain & Co, 80% of companies surveyed believe they provide a “superior experience” but only a mere 8 percent of companies had customers who agreed with that stance. In that same study, the commercial impact was also evident. Of the 80% of ‘misguided’ companies, average annual revenue growth was notched at just 2%. Of those that were actually doing things right?...A massive 19%. All is not lost. Recent figures quoted by Success CXP also suggest that nearly all businesses are savvy enough to put CX among its top priorities and wish to be recognised as leaders in this field. So far, around a third of companies are just getting started with a formal initiative while only a fifth consider their initiative to be ‘advanced’ in its design. So change is afoot, but not all that quickly. However, many of these companies are insurance companies, an industry infamous for its slow uptake of true CX CX NET W OR K I F E B R U A R Y 2 0 1 6 C X N E T W O R K CYNICISM towards mass media,big business & government CONSUMPTION behaviours are undergoing a cultural shift COMMUNITY becoming redefined and seeking sense of belonging CUSTOMISATION is now a critical element of the 1:1 experience COMMUNICATION for customers means always being connected but easily overwhelmed CONSERVATION is quickly becoming a way of life CONVENIENCE... becausedesire for instant gratificationcan drive innovation 7 Deadly Trends of Customer Experience Source: Donna Peebles
  3. 3. transformation. Of course, there is fair argument that they have a much tougher task on their hands. CX centres on easy customer engagement, straight-talk, and – perhaps the key ingredient – trust. Those who offer insurance have the chips stacked against them in all categories, let alone when it comes to having a culture of technological innovation needed to keep up with consumer demand. Other markets have found ways to reinvent themselves, such as digital companies benefiting relationships through multi-product models (from DVDs to washing machines, and – yes – even insurance), whereas conventionalinsurers have failed to be proactive. As an example, a survey on the subject of Multi-Channel CX for Insurance recently evaluated ten insurance companies from across the general, motor, home, life and pet sectors on the basis of a number of crucial CX factors. Among the results, only three of ten insurers successfully responded to customer contact via Twitter, only five of ten successfully responded to a customer email, and one insurer even failed to respond to all ten customer questions posed to it online. With the exception of a few countries, the percentage of insurance customers reporting positive experiences is fewer than 30%, worse than in banking. The elephant in the room Mention insurance to most people outside the business and the reaction is likely to be less than lukewarm. More often than not, customers will only connect with their providers through necessity – when they are having to form a new plan or make a claim. Almost no one relishes this prospect. This provides little time for insurance companies to offer an enhanced personal service or to gain a better understanding of their customers to leverage new promotions. But if there is one massive strike against the industry’s name, it is the common belief that insurance providers are money-oriented and not people-oriented. By nature of the industry, insurance could never work on the (often ill-advised) mantra of ‘customer is always right’. That means dialogue between company and customer is often impeded by a mutual sense of distrust, warranted or not. The trust factor is rising up the ranks of customer concerns. A CapGemini study found that it was the third most important factor in determining whether a customer chooses to take up with a life or non-life insurer, falling just behind price and product features, but bearing more weight than aspects like ease of purchase, loyalty awards and even online accessibility. CX NET W OR K C X N E T W O R K F E B R U A R Y 2 0 1 6 ‘The common belief is that insurance providers are money-oriented and not people-oriented’
  4. 4. This raises the question: are insurers listening? If they put their ear to the ground, they may not like what they hear. With social media now making the likelihood of a dissatisfied voice being broadcast for all to hear, insurers need to interpret this in terms of a business risk. 84% of customers trust the experience of other consumers, outweighing any active or reactive marketing efforts a company can offer. This means that as much as insurers need to have the capability to respond to these broadcasts immediately, efforts are best placed in nurturing a positive experience in the first instance, then encouraging social broadcasting of these individual achievements. Meanwhile, the very subject of communication across all channels is as much a matter of trustworthiness as the service provided. Sending a message out and receiving no response can be interpreted as incompetence, detachment or even outright contempt for the customer. In a moment where a problem needs an answer, a lack of input can transfer the customer’s frustration from the issue at hand to the insurer itself. Inversely, an immediate and helpful response can endear even those in the midst of a meltdown. And don’t think that won’t be remembered. To an insurer, a policy may look like a piece of paper. To a customer, it is their future in an envelope. Fraud presents another unique stumbling block for insurers, costing the industry $30 billion each year. With fraudulent claims on the rise, carriers require smarter and more effective security and prevention technologies. Relying on this analysis to be done after a claim has been made serves to erode trust. CX NET W OR K F E B R U A R Y 2 0 1 6 C X N E T W O R K Nota “sexy”product Aninherited image/culture Lack of transparency Can feel remote Claimsprocesscanbe cumbersome Emotional customers vs rational business Preconceptionthat “theywon’tpayout” Providersprioritise cost-containment Providersassume manyclaimsare fraudulent Insurersdon’tgenerally value/rewardloyalty Customerstreatedlike strangerswitheverycontactToo muchjargon Impenetrable comms Complex Ts& Cs From the CTX Insurance 2015 Workshop Why the lack of trust in insurance providers?
  5. 5. Fredi Lienhardt, VP of the Big Data & Smart Analytics Centre at Swiss Re, told a CX Network conference that “It is important for insurance companies to start providing tailor made products, that are completely aligned to the needs of the customer at the time they want it. This can be achieved through reacting in real-time, being flexible and really listening to the wants and needs of the customer.” …So are we overthinking the problem? CX NET W OR K C X N E T W O R K F E B R U A R Y 2 0 1 6 Accidentsandfires commonaftera sunny bankholiday Be available How insurance providers could address the trust issue During/afterasevere weatherevent Is 24/7 availability a possibility? Make iteasyfor customerstoprovide more information Gather datato proactivelycommunicate whencustomerneedshelp Couldincentivise through fun/competitiive promotions Explore biometrics and advancedtech Greetcustomerswarmly, not“Hello, what’syour policynumber?” Understandchanges inlife stage/circumstance “Protectmy family” “Take me withyou” on the journey Make the important informationshortandclear Follow uptocheckpeople understandwhatthey have bought BEFORE they needtoclaim Emulate Santander’s “welcome”calls Make the important informationshortandclear Insurance isa “keeping life ontrack” service Emulate South Africa’s“All Life” service Quickrecovery afteran event Offersevere weather alerts,relevantto home/motor/health From the CTX Insurance 2015 Workshop
  6. 6. You can’t buy trust…or can you? To begin the fight back, insurance companies simply need to move from providing remote product-led information to their customers, to focusing on an optimised experience that is open, human-led and promotes engagement. In other words – embarking on a mission to improve trust. Being price-sensitive towards customers can lead to them holding multiple products with a carrier, which in turn can lead to the ‘organic’ advantages of word-of-mouth and social media recommendations. In the bid for securing customer lifetime value, these are key factors to consider and leverage. To get there, all insurers need to seriously consider transforming digitally, both internally and customer-facing. Technology upgrades and upskilling staff are both necessary to engage with customers on a multi-channel basis, as well as to prepare for the innovations in online interaction that lie just around the corner. At the same time, if more advancement and investment can be made into countering fraud as it occurs – or deterring it altogether – customer-carrier engagement has less chance of being darkened by the shadow of investigation. None of this should be interpreted as a tough expense. The easier the customer journey, the fewer repeat interactions and errors which results in lower cost. Ultimately, improving customer experience not only enhances the time the customer spends with employees but also increases revenue, thereby raking back in a return on investment. With this in mind, if trust is the issue, investment may well be the answer. Customer Experience Transformation: Insurance 2016 will return to London, UK, on 25-26 May, offering the insurance industry invaluable insight into: • Addressing your insurance-specific customer experience needs • Benchmarking against the industry leaders and your peers to gain an understanding of the market • Establishing the next steps you need to take in your customer experience journey • Learning how the latest technologies can help you attract and retain customers • Discovering how to engage your customers to reduce churn rates CX NET W OR K F E B R U A R Y 2 0 1 6 C X N E T W O R K CLICK TO FIND OUT MORE
  7. 7. 25 - 26 May, 2015 London, UK 2015 brought alarming news for the insurance industry in the form of two industry studies which reported record-breaking drops in customer experience satisfaction. Insurance companies are fast realising that customer experience now one of the most important ways to achieve competitive differentiation in an increasingly commoditised market. Customers have more options and higher expectations than ever before, and very little loyalty to insurance companies. Creating truly engaged customers is the most sure-fire way to ensure a reduction in churn levels and increased profitability. For today’s customer, this means an engaging digital experience, fast- response times and a company which puts the customer first. Customer Experience Transformation: Insurance will bring together pioneering customer experience leaders in the insurance industry to guide you through the best ways to achieve true customer satisfaction loyalty. Download the agenda Discover how to: • Address your insurance-specific customer experience needs • Benchmark against the industry leaders and your peers to gain an understanding of the market • Establish the next steps you need to take in your customer experience journey • Learn how the latest technologies can help you attract and retain customers • Discover how to engage your customers to reduce churn rates +44 (0) 207 036 1300 BOOK NOW Delivering a positive customer experience to reduce churn and differentiate from competitors #CXinsurance