Insurers that deliver a superior customer experience are fulfilling a key aspect of their mission and will ultimately reap rewards for their efforts in the marketplace. Insurers that deliver a substandard customer experience are not and will eventually fade in the face of competition. The experience is important whether the customer is a policyholder, employee, agent, broker or another business.
According to a survey of 500 individuals representing over 200 insurers and over 200 agents, brokers and MGAs and a report titled, “CCM and ECM: Insurer Priorities and Plans” (December 2010) from Strategy Meets Action (SMA),” the top three business drivers are all about enabling growth, not improving operational efficiencies or reducing costs.
Improving customer service was the number-one driver followed by a better understanding of customer/market needs and improving customer retention. Many insurers are changing their marketing messages to downplay their low rates and are focusing on customer-experience delivery. Unfortunately, insurers seeking to deliver a consistently excellent customer experience currently face many challenges including:
Companies like Amazon have made exceptional customer experiences a core component of their business strategies. Customers’ interactions with these companies raise their expectations about all aspects of service including speed, ease, relevance and personalization. These expectations are then projected onto insurers as well.
Multiple communication channels
Today’s customers want to interact across multiple communication channels including phone, e-mail, the web, mobile, fax, interactive voice response (IVR), interactive chat and/or walk-in visits to brick-and-mortar offices. This presents insurers with the new, additional challenge of providing a consistent level of service and consistent information for customers regardless of channel.
A downturn in the economy is reducing consumer spending, and insurers are not immune to the pressures. Consumers are always looking for the best coverage for the best rate, and insurers, along with competitors, are scrambling to meet the need. The result is tighter budgets for most departments within insurers. Any funding may be earmarked for specific purposes other than improvements in customer service. As a result, insurers must typically come up with strategies for improving their customer experience without hiring additional staff.
Legacy systems integration
Few insurers can afford the cost or business disruption of a wholesale “rip and replace” of their existing information systems. Whatever initiatives insurers implement to improve their customer experience, they must be capable of effectively integrating with existing technologies and resources.
Retiring subject-matter experts
Many insurers are experiencing a generational shift as their aging “baby boomer” staff retires. They take years of irreplaceable expertise and experience with them when they go. Such losses can have a significant adverse impact on customer service—unless insurers can take immediate action.
Ongoing legislative/regulatory change
National regulations are not static and neither is the information insurers have to provide to their customers. This ongoing flux adds to the difficulty—and potentially, the cost—of delivering a standout customer experience.
Insurers must somehow overcome the customer experience/cost dilemma if they are to optimally fulfill their business objectives. They must become more adept at delivering exceptional customer experiences across all communication channels within their existing resource constraints.
To really succeed, they have to keep getting better at continuously doing more with less.
How can you face the challenges plaguing insurance companies? See how Molina Healthcare did: Molina Healthcare Inc. Case Study.
This is an edited excerpt from the white paper, “Eight Steps to Exceptional Customer Experiences for Insurers.”