"Loyalty leaders grow revenues roughly 2.5 times as fast as their industry peers and deliver two to five times the shareholder returns over the next 10 years".
Rob Markey Partner Bain & Co. HBR Jan 2020
With NPS scores often struggling to beat 70 many insurers should be worried. The critical point of contact is when a policy holder has to make a claim not when they seek to buy a policy.
We live in a digital, minimal friction, high expectation world. Most insurers offer clunky, outmoded legacy interactions into this world and show surprise when customers respond badly. Yet some insurers measure NPS in the upper 80's which shows that there is no excuse.
They have actioned the key strategies that Rob Markey highlights.
- Create systems for measuring customer value
- Invest in necessary enabling technology
- Organise the business around customer needs and not legacy system limitations
- Engage the whole organisation and stakeholders
Some insurers may feel there is a conflict between earning higher NPS and customer sat scores on the one hand and tackling OPEX and cost of claims on the other. You can have one but not the other.
A new report from KPMG "The New Claims Organisation"shows that insurers can square that circle and achieve both goals to which I would add a third:
- Delight customers
- Collapse costs
- Motivate the claims team
Paul Stanley CEO of 360Globalnet added these insights to the KPMG report
"I agree with KPMG. Today there is no choice for insurers between excellent customer service (include third parties and supply chain) and reduction in opex + claims spend.
It is imperative for Carriers to do both at the same time whilst slashing IT cost. Sounds a big ask doesn't it?
In theory technology exists to achieve this, but not in any joined-up way. Currently it's a jigsaw puzzle where the Carrier has to assemble the outcome from a multitude of point solutions with IT, consultants, project managers as the expensive paraphernalia they can't escape.
So what's the answer... No code self configurable technology. All the new digital capability provided out of the box working in tandem with carrier's legacy /core systems or as a next generation, standalone End-to-End claims process automation platform (not just FNOL)
The supply-chain managed in the same technology as the claims processes. Any claim type, of any complexity, in any geography without having to add new licenses and deployment costs with each new project.
Incorporating advanced analytics with unstructured data interrogation.
PAYG pricing and no Capex = Low Risk and massive transformational upside.
Transformational change of this nature does need to be professionally managed particularly in an enterprise-wide project to extract the maximum financial benefit and that saving is considerable."
Which neatly brings us back to Rob Markey's exhortation to not undervalue your customers. Start measuring and managing their worth.
I have identified four broad strategies that loyalty leaders rely on for superior performance. Those leaders create systems for measuring customer value and invest in the necessary enabling technology, use design thinking methods to build customer loyalty, organize the business around customer needs, and engage the organization and stakeholders—employees, board members, investors—in the transformation.
https://hbr.org/2020/01/the-loyalty-economy#are-you-undervaluing-your-customers
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