A more comprehensive strategy is needed to support acquisition, satisfaction, retention and finally, loyalty. Insurers are building and enhancing channels, engaging more personally and socially, and moving to a service-based relationship that utilizes technology to meet customer needs.

The opportunity to acquire new customers and then keep them seems vast. There is a $10.2 trillion gap in middle-market life insurance today, and Americans overall are underinsured by $20 trillion. Insurers are trying to be more customer-centric, employing technology that improves the buying experience, service, drives policyholder value, facilitates cross selling and therefore improve retention and loyalty.

The challenge of effectively reaching a diverse customer base and sustaining a productive relationship is a complex one indeed. Satmetrix, a provider of cloud-based customer experience software for companies worldwide, measures the average customer loyalty of various industries. Their findings indicate that insurance was near the bottom, with a 'likely to recommend' rate of only 23 percent.

This number at first seems to contradict increasing customer satisfaction scores for insurers. But perhaps there is a gap between a satisfied customer and a loyal one.

Perhaps satisfaction comes from ease of transaction while loyalty comes from fulfillment in moments of truth such as claims and in quality human interactions that build a strong relationship. Distribution and service channels must provide quality service that exceeds expectations and differentiates a brand from the competition.

Brand perception and reputation are extremely valuable assets that must be built and protected. Trust and brand perception are vital, yet fragile and volatile. As the old saying goes, your brand is what people say about you when you're not in the room. In our age of online social media and an always-connected population, the constant risk to an insurer's brand has never been greater. Social media has become the new 'word of mouth.'

Customers easily voice opinions, complaints, and service experiences real-time via blogs and various social-media channels. In order to gain direct customer insight and build trust, insurers must utilize social media to proactively engage and create a 'social impact.'

Social-media technologies also help capture leads and immediately link prospects to insurance professionals who can service their demand in real-time. Deeper relationships are being formed through social media and often lead to cross-selling opportunities and higher retention rates.

As more tech-savvy generations begin to make decisions when shopping for insurance, it will be crucial for insurers to leverage technology for their own benefit. Today, customers are more likely to obtain information and make purchasing decisions based on what they can easily access and interact with online. This will be the same case when customers choose their insurance coverage.

Insurers need to improve the manner in which they interact with consumers. If insurers offer a variety of channel choices, customers can easily pick their personal preference based on their need at the time. Channels such as web and mobile apps make simple, low-value transactions—such as making a payment or updating an address—easier for customers accomplish without the hassle of calling someone or visiting an agent.

However, as the complexity of transaction increases, interaction with experienced professionals is needed and the channel preference shifts. Modern technology solutions such as a customer-centric distribution center with a collaborative infrastructure make both traditional insurance interactions and newer, online-focused interactions possible.

By incorporating this customer-centric distribution system, leaders in insurance will enable collaboration throughout the enterprise and distribution channels. This model streamlines channel escalation needs to better address customer requests.

The interaction can begin in one channel, (web or IM for example) and then transition to a multi-party video and screen sharing session to virtually surround the customer with expertise. This customer web portal enhanced with IM, video and screen sharing can convert dull insurance transactions into relationship-building interactions, which of course, is great for business.

The multi-channel approach can reduce customer abandonment rates, increase the number of products sold to customers, improve agent efficiency and vastly improve customer experience, all while driving down costs.

It is important to note that insurers and agencies will continue to face challenges as they aim to significantly increase customer loyalty. However, these challenges are no longer about what to do, but instead how to incorporate a sustainable, customer-centric infrastructure effectively to expand relationships with current and future customers. If and when successfully adopted, these customer-centric solutions allow insurers to cultivate relationships with customers, leading to higher retention rates and also increase operational efficiency.