Merger and acquisition (M&A) activity remains strong within the insurance industry.

Companies looking for growth, diversification, expansion or cost efficiencies may find success through M&A activity.

However, one of the most critical — and often overlooked — aspects that can make or break the success of an insurance M&A is the details of the user experience. Seventy to ninety percent of mergers and acquisitions fail, making it even more critical for insurers to focus on the key aspects of an M&A.

Today's insurance landscape is competitive, and customer loyalty is often fragile. So thoughtfully integrating the merging companies' user experience must be done. A seamless user experience means a policyholder can navigate between multiple policies and coverage lines they may now have with one single insurer following an M&A.

Missing this critical step is costly and negatively impacts the M&A.

Insured.io recently worked with an MGA that had completed multiple acquisitions over a few years. They were ultimately left with seven distinct policy systems, including some legacy ones. This presented a clear challenge for the MGA when attempting to build a single, unified brand for their policyholders. By implementing a unique data strategy, the insured.io team successfully unified their policyholder data and customer experience while maintaining the disparate systems, allowing them to focus on servicing customers rather than the complexities of a massive internal technical project.

Insurers focusing on strategies to create an integrated user experience can help ensure a smooth transition during M&A activity.

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Why UX integration matters

The customer is at the center of the insurance workflow. Their expectations around how they interact with their insurer are grounded in the user experience, encompassing everything from the intuitive design of online portals to the ease of reporting a loss or checking claim status. Studies found that 80% of customers say companies should focus on the customer experience during an M&A transition. Other research proves that user experience is critical for retention, with SMS messaging increasing retention rates by 52% when used to notify policyholders of upcoming cancellations.

However, when two companies merge or one is acquired, they often bring different processes, systems, and workflows — along with different cultures and customer journeys. This dichotomy can be devastating to the success of the merger or acquisition if not managed properly.

A significant concern during M&A activity is the inherited technical debt from the acquired company. Systems and processes differ, even within the same organization, and many smaller companies have disparate technology solutions filled with patches and legacy fixes. These different solutions can become information silos, impeding internal processes and creating a disconnected customer experience that makes it difficult — if not impossible — for the newly merged company to promote a unified brand identity.

While the ultimate goal of any M&A is data unification, consolidating policies into a single system takes time and resources. This time investment means insurers must build a customer experience strategy to account for this. Change needs to happen quickly to support a successful M&A with transparent benefits to the UX.

An insurer's failure to integrate differing user experiences during a merger or acquisition can lead to a confusing or misaligned customer journey that causes dissatisfaction, complaints, and brand loyalty erosion when customers feel confused or neglected during the transition. Policyholders may feel the new company no longer meets their expectations.

To avoid these challenges, insurers must remember that UX integration matters.

The slideshow above illustrates seven steps that can help ensure alignment following the M&A. |

The payoff of getting UX right in M&A

Getting the user experience right is no longer a nice-to-have, it is a necessity. A thoughtfully designed and executed UX consolidation can lead to the long-term success of a merger or acquisition by strengthening customer loyalty and streamlining operations. Insurers that take a strategic, technology-driven approach to their UX integration can help ensure policyholders remain loyal and satisfied throughout the merger or acquisition. When UX integration is handled the right way, insurers enjoy a smooth transition, increased customer retention, and a stronger brand.

Steven Johnson is the co-founder and CEO of insured.io, an omnichannel customer engagement platform for insurance carriers.

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