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The importance of crafting a customer-centric experience in the insurance industry

7 minutes
Customer experience (also known as CX) is a key differentiator between high-performing companies and their struggling counterparts. Businesses that offer world-class customer experiences enjoy higher profits, increased growth, and enhanced consumer loyalty.

Regardless of industry, CX is the new battleground in a highly competitive market. Consider these CX-related statistics:

  • Customer-centric companies drive revenue anywhere from 4-8% higher than other businesses in their industry.
  • CX leaders outperform their competitors by an estimated 80%.
  • Loyal and satisfied customers are five times more likely to purchase from the same company again and four times more likely to refer a friend or family member to the business.

These figures are just the tip of the iceberg when it comes to demonstrating the business impact of customer experience. However, some industries seem to be lagging in CX, such as the insurance industry. Why are insurance companies falling behind? How can insurers successfully overcome obstacles to implementing effective CX? The following information will discuss the answers to these questions.

Why Insurance Companies are not Focusing on Customer Experience

Many experts agree that unpleasant and ineffective customer experience is a primary factor in customers switching from one insurance carrier to another. In fact, one study found that 67% of insurance customers cite unpleasant experiences as a reason for churn. With such compelling evidence in hand, why do so many insurers have trouble implementing better CX practices?

There are several factors involved, which include:

Organizational Silos

Like many business organizations, the typical enterprise-level insurance carrier has to deal with the "silo mentality," in some shape or form, as an inherent part of its culture. However, silos in the insurance sector likely include tools and technologies that are not consolidated into a streamlined, end-to-end customer-facing process.

For example, many insurance companies deliver separate, fragmented customer experiences across a variety of different touchpoints, such as:

  • Company websites
  • Sales call centers
  • Customer support centers
  • In-office interactions
  • Emails

In many cases, the agents and managers at each touchpoint have different training, goals, and metrics that inform their interaction with the customer. Of course, this inevitably leads to discrepancies within the overall customer experience.

In other situations, the insurance company may not provide the necessary framework for a seamless customer-centric process. For instance, a 2018 survey by the Independent Insurance Agents & Brokers of America (IIABA) found that some 76% of insurance agencies do not offer mobile apps to their clients, and a whopping 89% of agents/brokers do not have live chat capabilities. This is a real issue when more and more customers want increased control over when and how they interact with their insurers.

Slow Time to Market

Many insurers display a tendency to resist change, or at least to approach it with caution. As a result, the insurance industry as a whole has been slow to make game-changing CX capabilities available to the general consumer.

Compounding this issue is the common misalignment between the priorities of corporate executives and those of their customers. One comparison found that "knowledgeable salespeople" is the number one CX factor that policyholders want to see in their insurance company; yet, executives ranked this element near the bottom of their priorities for enhancing customer experience. 

Fortunately, insurance companies are gradually overcoming this hurdle to exceptional CX. For example, leaders at Allstate initially believed that Drive-In claims centers would significantly boost their customers' satisfaction levels. However, customer surveys revealed a different story. In response, Allstate released its QuickFoto appraisal app to streamline and speed up the claims process, thus resulting in a better experience and more loyal customers.

Lack of Transparency

All too often, insurance companies rely on "friction" (i.e., complicated claims processes and indecipherable policy language) to give them an edge in revenue generation. However, such practices will likely come back to haunt the agencies that subscribe to them. For instance, clients that suffer a bad experience are likely to not only leave their current insurer but also to warn friends, family members, and colleagues against purchasing from the agency in question.

How Insurers can Overcome Obstacles to CX Implementation

In order to successfully deliver customer-centric experiences, insurance companies must first change their mindset. Many carriers view individual customer interactions as distinct events; however, customers don't view these interactions in the same way. After all, the customer's objective in any interaction is to meet a critical need, obtain adequate coverage for their family, recover from an accident, or resolve a claim-related issue.

When insurers align their thinking with the viewpoint and needs of their customers, then the technical aspects of CX implementation more easily fall into place. For instance, they can better leverage innovative technologies to provide their clients with a no-friction, simplified experience. One example of such a technology-driven solution is no-code building; in other words, the capability to quickly convert obsolete paper forms and clunky PDFs into appealing, intuitive, and compliant eForms - all without writing a single line of code.

Some advantages of a no-code builder include:

  • Consolidation. Insurers can orchestrate all the essential aspects of a policy and claim from one unified platform.
  • Transparency. A no-code platform provides customers with complete data visibility to ensure that friction is kept to a minimum.
  • Optimization. No-code builders can be regularly updated and optimized as new insurance/technical needs arise.
  • Unification. With a no-code builder, the channel used by the customer moves into the background; the focus is on the customer journey as a whole. Several different channels are supported and unified into a single focal point.
  • Longevity. The innovative technology that powers no-code builders is future-proof and supremely adaptable to changing business needs.

In summary, the insurance companies that put forth the effort to provide a world-class customer experience are the companies that will reap a high ROI and enjoy sustainable growth.

Tal Daskal

Tal Daskal is the CEO and co-founder at EasySend. Tal is an expert on all things digital transformation in banking and insurance and is a passionate advocate for the paradigm shift towards no-code application development in the financial sector.