Customer churn is not a new concept in the insurance industry — in fact, losing customers is often considered part of doing business for insurance companies, and many companies accept it as inevitable.
However, it does not have to be. It all comes down to understanding the emotions of the clients: fear versus care.
Warranted or not, fear is the emotion many customers associate with insurance, whether purchasing as consumers or as businesses, whether in the "value P&C" or the "premium specialty" market. Insurance is essentially sold in this world based on fear of what might happen. It is purchased for a "just in case" situation, and customers fear they or their loved ones will be left liable for a large sum of money.
What customers really want is to be cared for by experts who understand the best products for them across an increasingly complex product set. Customers, for their part, fear that they might have not managed to get the best product at the right price. They often believe, for reasons right or wrong, that insurance professionals push products that fetch them a hefty commission — not the ones that really serve the best interests of their customers. And many customers fear that the insurance company will find excuses to avoid paying out insurance claims, or paying the correct amount.
|Going the extra mile
Today, the best companies in the insurance industry are realizing that they have to alleviate these fears with offerings that provide confidence. Customers want products and services that make them feel cared for and part of the system. The best insurance companies are going the extra mile to make customers feel special and cared for. Easy online quotes, externally certified product comparisons, and one-click processing of claims are just some of the ways insurance companies are engaging with their customers.
Customizations such as naming care associates along with client phone numbers, emails, chat and social media accounts; enabling field insurance professionals so they can process payments on the spot; periodically reviewing an individual or a company's portfolio of insurance products for premium reductions — not just additional upsells; providing features such as "click for details" that let users drill down and see what factors prompted a certain underwriting decision, are other add-ons that are being offered.
Every time a company launches a new capability, market expectations rise and those companies that do not provide the same or better capabilities not only lose customers, but tend to lose the best ones. Now and in the future, the ability to offer services that make customers feel cared for is more important than ever.
This is the first in a series of articles from Jon Mayo of NIIT Technologies about how to utilize data in the insurance industry to decrease customer churn, increase revenues, and lower cost. In coming articles, he will analyze how data is impacting business models, how to upgrade data warehouses to be more effective, and how to fully leverage data efficiently to drive business outcomes.
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