4 actions to accelerate customer experience performance for insurers

For insurers, improving customer experience and service quality is not only a necessity; it is also a loyalty and revenue growth lever. According to a Forrester study1, an insurance firm can expect incremental revenues up to $300 million if it were to move from a below average customer experience score to an above average score.  Insurers such as Progressive and Zurich also report link between improvements in customer experience score and retention.

It seems the question is not whether to invest in customer experience or not, but rather where and how to. In our view, insurers who are starting their customer experience improvement journey can accelerate their performance by addressing these 4 areas:

  • Start with experiences that matter most: It is generally not feasible to try and improve customer experience all at once because not every touch point has the same level of impact on overall experience. Instead there should be few ‘must win battles’ defined in the organization that will make the most impact in customer experience. How to find these ‘must win battles?  One way is to run an intuitive process and to select focus areas from ‘known history’ since the organization may have a sense on which customer journeys are more influential on loyalty or satisfaction. Another way can be to take the complete picture of customer journey and to find out problem spots through a quantitative process.
  • Recognize the differences between Claims vs. No Claims customers: A customer who had no claims experience has very limited engagement with the insurer such as research, sign-up, payments, renewal and perhaps a support interaction in a given year. A customer who had a claims experience on the other hand starts with a negative event in her life such as a traffic accident and goes through a rather intense engagement boxed in a time as little as couple of weeks. The motives and loyalty creating experiences of a claims vs. non claims customer are very different and require different approaches from an experience delivery stand point.
  • Deploy targeted customer experience listening points including 3rd parties: From assistance services to repair, several number of external organizations have impact on the customer experience especially in the claims process. For example a typical auto insurance customer needs to deal with various 3rd parties such as towing service, experts, car services, rental car agencies in a claims situation.  A house insurance customer deals with plumbers, locksmiths, experts and so on. If timely measurement of customer experience at a 3rd party is in place, problem areas and service levels can be reported back to the organizational owners and actions can be taken faster.  To make customer experience actionable, insurers also need to deploy transactional measurements such as Transactional NPS to collect feedback specific to that transaction right after the customer transaction. The challenge is to ensure delivery standard and consistent experience to customer (such as a replacement car) where the insurer has limited control over performance.
  • Already think about improvement loops from day 1: Feedback collection without a clear definition and process of how it will be used for improvement scales down customer experience into a research activity.  To make experience actionable, organizations need to ‘close the loop’ on each feedback by identifying the root cause and taking action within the organization based on pre-defined improvement categories.  While this may seem like a simple task and process, it provides discipline and added visibility to improvement operations later on.

 

Sources:

1 Forrester, The Business Impact of Customer Experience, 2014

2 Zurich, Investor Update Presentation, 2014