The Insurance Industry – particularly P&C – harbors complexity not found in most others. Fragmented distribution models, supply chain hand-offs, and pervasive regulatory requirements collectively create a challenging environment for Agent & Policyholder experience. As product and price competition grow increasingly difficult for insurance companies, customer experience is becoming the next battleground for differentiation.
Some food for thought…
- Nearly 2 out of 3 policyholders are at risk of non-renewal with only a neutral and/or negative customer experience
- Among least satisfied policyholders, only 39% indicate they’re likely to renew and only 44% say they’re likely to recommend their insurer
- Among highly satisfied policyholders, 86% say they “definitely will” or “probably will” renew their policy, while 96% say they “definitely will” or “probably will” recommend their insurer
Source: J.D. Power
Except for pieces of paper (for those who still want them), insurance companies don’t sell something people can touch, feel, or hold. They sell a promise. Because of this – and because technology continues to empower consumers with choice, convenience, and speed – customer experience has become table stakes for today’s insurance organizations.
Unfortunately, most don’t have the expertise or time to quantitatively measure their Agent & Policyholder experience – nor manage it as a continuous improvement program. They’re certainly not getting this from their BPO vendors.
Fluff? Not likely. A Forrester Research index of customer experience-leading companies has posted an average ten year stock return of 213% vs. the S&P 500 average of 75% from July 2004 – July 2014 (Source: Forrester Research). It’s not hard to envision the financial impacts of a strong customer experience when considering those that got it right: USAA, Southwest, Amazon, and so on. Although as a whole we’re playing catch-up, some in our industry are getting it right too. These and other P&C organizations that prioritize customer experience as a C-Level initiative will win the next battleground for differentiation.