The top Customer Experience (CX) challenges in the insurance industry

Among the primary things that people and organisations hold dear are assets, monetary wealth and health. The insurance industry supports these valuables with a variety of products and services to safeguard them. Ensuring a superior Customer Experience (CX) therefore comes front and centre for insurers: not only is it a key competitive advantage in securing new business, but it can also be an important factor for retaining customers and ensuring loyalty to their brand.

If we look at typical customer journeys in the insurance sector, there are two interactions that determine most of the CX opportunities: during the initial onboarding of the customer, and during the claims process. Insurance customers are typically on the lookout for good insurance – in the B2C sector, whether for their homes, automobiles, health or life, and in the B2B sector, when it comes to procuring liability insurance for the organisation or health insurance for employees – with primary motivators being cost, and plan offerings.

What, then, are the challenges in the insurance industry in delivering a memorable CX during these interactions? Let’s examine each, and discuss ways to overcome them:

During the sales and onboarding process, it has sadly become typical to expect friction between insurance teams and the customer. The process is anything swift, comprehensive or easy to navigate. In the new era of digital insurance, where product comparisons, reviews and social media feedback can make or break products, no amount of marketing can mask lumbering onboarding procedures filled with paperwork and fine print.

The pandemic has ensured that remote sales of insurance products are now higher than in-person sales. Insurance industry mavens resorted to remote verification of insurable assets during the pandemic, and the practice has continued, giving a fillip to remote sales and onboarding over in-person procedures. This move shifts the onus of smooth onboarding onto digital insurance platforms. Many insurers who moved online willy-nilly have not yet got used to the ‘new regime’, resulting in a fragmented bag of online and offline offerings that compromise the CX. The numbers are telling: one in six customers report no follow-up from agents after an initial call, per surveys.

Like other SaaS offerings, digital insurance platforms, including those offered by insurance outsourcing services, must include:

  • Seamless omnichannel experiences that are personalised
  • Easy account creation including authentication and verification. For example, sales agents can have customers sign application forms on their smartphones while they are still on the call with the agent
  • Easy-to-navigate flows to purchase insurance products. Think of explaining insurance product features with videos and offering easy-to-use comparators to customers so that they can make better purchasing decisions.
  • Capability to upload documents and photographs and authenticate them. Small niggles such as restrictions on photograph sizes can prevent customers from completing a transaction. Build your digital platforms to ensure the CX is smooth and server size issues are handled at the backend with a mix of automation and process.
  • Timely confirmation of transactions via preferred routes such as email and phone. Upon completion of a transaction, the policy documents must be swiftly dispatched to customers. If the transaction errored out, the customer must be notified, along with the reasons why.
  • Maintenance of Service Level Agreements (SLAs) in fulfilment activities.

Unlike sister sectors like banking where customer interactions are frequent, the interactions in insurance are infrequent. Once they purchase insurance, customers, even institutional ones, usually don’t have another interaction with the insurer until it is time to file a claim. In most cases, insurers are assured of many years of premium payments. This makes the CX during claims filing and fulfilment all the more important.

Insurers must primarily ensure that the claims process is not a source of stress for customers. Claims are filed at a time of loss – either of health, a death, damage to property, liability or otherwise, after many years of prompt premium payments. Besides all the stresses the customer is experiencing, claiming insurance payouts cannot be an added challenge. While fraud does occur at significant levels, fraud detection and filtering must not penalise honest customers.

This is one of the major challenges in the life insurance industry, where claims filing and payouts can be onerous, multi-year affairs leading to much acrimony. A report from Accenture states that 74% of customers considered switching, or switched, to another insurance provider after being dissatisfied with their claims handling.

The flip side is also true. Some insurers, especially auto insurance and property insurance companies are experiencing soaring customer satisfaction numbers that can be attributed to better claims handling. What are these insurers doing right? Here are some ways they’ve overcome the CX challenge:

  • Omnichannel experiences, including the ability to file claims online, on a website or an app
  • Transparency during the claims process, such as a real-time dashboard that reports the status of a claim back to the customer
  • Speed of settlement –  many analysts have found this bottom line – in the insurance industry, the speed of settlement is the single biggest determinant for higher claims satisfaction numbers.

How Infosys IBPM can help

Undoubtedly, the future is multi-platform: the CX strategies discussed here point towards the digital transformation of insurance offerings and consequent investments in omnichannel strategies. Insurance companies can also look at integrating Artificial Intelligence (AI) and Machine Learning (ML) to leverage data and use modelling to enhance claim settlement processes, one of the key drivers for better CX in the industry.

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