Building customer loyalty through empathy

Many insurers mistakenly think improving their customer experience and the claims journey means investing in digital and data. In the stampede to digitally transform (accelerated by Covid), a key CX ingredient is missing – human empathy and the personal touch at a time when the customer is stressed, anxious and seeking help. Digital tools can simplify and expedite the claims process – almost 61% of customers prefer to use them to monitor their application status. And self-service puts power in the hands of the policyholder.

But customers also want to talk to a real person. They want to find a friendly voice at the end of a telephone. They want to know who is handling their claim and trust that they will be treated with empathy and care. It’s this empathy and personal touch that helps an insurer build an emotionally committed relationship in an otherwise soulless experience devoid of much meaningful contact.

John Aves December 9th 2021

This conclusion is backed up by LexisNexis in its 2021 Future of Claim Study  which states: 

"How a claim is handled is an extremely important part of the insurance experience, and it gives insurers a chance to provide value and deliver satisfaction. Lots of different factors can influence satisfaction in the claims process, from customers being kept informed and helpfulness of staff, to time taken for claim to be settled and outcome of the claim. "

Consumer Intelligence  (CI) 

Listed alphabetically the top performers are:-

 Each year, CI uses its Insurance Behaviour Tracker (IBT) to gain insight into how consumers feel about their insurance provider. It does this by surveying over 48,000 home and motor insurance customers to find the top performing brands within the market. Its Claims Satisfaction award asks customers who have claimed how satisfied they were with the claims process. 

The average NPS score for home insurance brands is 5.7. But for the companies that came out top in the Consumer Intelligence report the score is 15.8. For motor insurance the average score is 7.5. The NPS score increases to 12.8 for the award winners. Meanwhile, the average customer retention rate for home insurance brands is 63.6%. For the award winners this jumps by around 5% to 68.5%. There is a 4% gain for motor insurance award winners at 64.8% compared with the industry average at 60.8%.

"Very satisfied customers are more likely to recommend their insurer to others. So the claims process is the moment of truth for the insurer too. A poor experience = unhappy customers, negative reviews, fewer referrals and more customers going into flight mode. The claims process is high stakes for carriers that decide to drift along with a poor experience."

John Aves 

Digital maturity is just one means to deliver outstanding products and service to customers. Still- insurers must know why they need to transform, validate all projects with rigorous business planning, strategies, resourcing, and cross-company commitment. Great claims management is of little use if the product itself does not meet customer requirement s and changing driving behaviour. When the product is best of class, value undeniable and customer experience across all aspects of insurance from quote & buy to claims then claims will be the deciding factor over time. 

Digital transformation in that context can be the platform to deliver industry leading metrics for the customer and the company.

The overall picture is of motor insurers achieving high digital transformation in Quote & Buy and Mid-Term Adjustments whilst still much to do for claims eFNOL and even the essential matter of keeping customers and partners informed with automated and ad hoc online messaging. 

Source Altus DigitalBar December 17th 2021

Altus goes not much greater detail by measuring each insurer across 19 digital capabilities seen below in top ranking AXA.  

Just to keep matters in perspective Altus also evaluates pet insurers and the top of the pack in this sector is Bought by Many with an 84% rating.  

Hang on you might say, Bought by Many had no legacy core systems inherited over many years M&A activity, pet claims are simpler, and it is not fair to compare the two. However, we already see auto equivalents of this pet insurer who have the industry expertise, start with modern agile and low-code technology platforms, high funding, and fierce ambition to apply the same high digital transformation to auto insurance as Bought by Many has done to the pet insurance sector.

Take another aspect of auto insurance, short-term cover, and you see that the companies with the highest digital maturity across all aspects of insurance are all new like By Miles. It's not to say they will replace more traditional incumbents but they are nibbling away at profitable niches in the same way that online travel agents started  small selling branded hotel chain rooms on line with a great user experience at discount and ended up haemorrhaging hotel chain profit margins. They offered a better service, a better price and stole business away from incumbent hotels. The hotel brands have fought back since then but at a high cost.  

John Aves continues the narrative.

Boosting loyalty through service and process

The first notice of loss (FNOL) is often the first interaction that a customer has with their carrier. It’s one of the most important elements of the customer experience for claimants. This is borne out in J.D. Power’s Auto Claims Satisfaction Study and Property Claims Satisfaction Study. The data analytics and consumer intelligence company found that the way an insurer handles FNOL accounts for 25% (auto) and 26% (property) of insurance customer’s satisfaction. The combination of services available at FNOL have a major impact on satisfaction levels.

Back in July I described three examples of transforming eNOL/FNOL which combine human intuition and empathy with technology.

First, the AA partnering with Synergy Cloud to develop and deploy a next-gen digital claims platform meeting not just its needs but those of all insurers, brokers and MGAs. Working back from the customer, including the needs of the repair, replacement and engineering supply chain and not forgetting the requirements of claims adjusters, fraud teams and inhouse specialists.

Second, AXA UK has rolled out a new machine learning tool to help streamline and accelerate complex property claims. BETSIE (Buildings Enhanced Triage Steering Intelligence Engine) increases the speed and accuracy of claims resolution by capturing essential data points and simplifying the claims triaging process.

The tool, which was built inhouse by AXA, uses data, analytics and machine learning to accelerate and improve decision making and triage management. This enhances customer experience as fewer questions need to be asked and the potential for rework, delays and further costs are reduced.

Third, Zurich cut property claims settlement times to under 24 hours with its latest state-of-the-art industry-first AI solution. During a pilot between December 2020 and February 2021, the technology created in collaboration with delivered automated policy checking through the use of Natural Language Processing (NLP) and Knowledge Graphs to deliver a brand-new capability to the market, Automated Policy Checking.

John Avers added another use case>

 Ping An Property & Casualty Insurance Company, is enhancing its FNOL process. Ping AN P&C has rolled out its ‘one-click claims service’. Customers that use its app, which has 36 functions, can have their accident claims settled in as little as two minutes. In the event of an accident, the car driver uses the app to report the accident and upload a photo of the scene (especially collision damage).

Within seconds the loss report is generated, the impact on their premium is calculated so they can gauge whether they should make a claim or not, a trusted repair is recommended and the customer is given an estimated cost. With over 123 million users, the one-stop app also lets customers input payment details, sign agreements, enquire about their claims progress and book a whole range of services from repairs to roadside recovery services to valeting to Covid-secure sanitising.

Whether Tier 1/2 or a small insurer all can make these improvements in a cost-effective manner. 

A final thought from John Avers …

Transforming a critical moment like insurance claims requires internal cultural and organisational change to ensure that your new promise to customers is delivered on the ground. Coaching, training and education is essential so that everybody understands the value of the implementation to the customer, and their work. Change on this scale requires leadership from the top down and cross-functional co-operation. It requires an internal analysis of customer data, capabilities and gaps. Insight from external CX best practice (inside and outside the sector) will also be crucial to the implementation plan.

And we don’t just mean best practice from companies like Amazon or InsurTechs like Lemonade. In the rush to digitise and be more Amazonian, carriers are at risk of losing a critical opportunity to offer customers the support of an empathetic person at the moment of truth. The most progressive insurers are looking at how to equip their people with skills to serve customers with empathy and add that personal touch at a time when their customers are most in need.

What are your thoughts? How will insurers rise to the claims challenge? What will the customer journey look like as insurers seek ways to improve their CX at such a critical moment?

The Altus DigitalBar ( UK only I am afraid) is a great start. You can compare your own digital maturity across the various customer engagement journeys ( see above for AXA & Bought by Many for pet insurance) across Home, Motor, Pet, Short-term car,  Travel, Renters, Gadget. You can also undertake custom research comparisons to extend across other aspects of claims, Quote & buy etc.

In the USA the J D Power Insurance Customer Sat Surveys are a mine of rich information. 

Whilst we have majored on claims this applies to all aspects of insurance- taking out a policy, renewal, making a claim and cancellation. As John Aves points out:-

The inconvenient truth

Unpaid claims, endless paperwork, confusing processes, frustrating calls and long wait times all make it easy to not be a customer. Almost one in three customers think that insurers oversell products, they are reluctant to pay out claims, or they think it is a necessary but inconvenient service, according to Guidewire. There is a deep-rooted problem here. Customer loyalty is fragile. But there is an opportunity for insurers to win business by offering tailored coverage and all-inclusive packages. The Guidewire study also discovered that 55% of consumers would consider consolidating all of their insurance policies into one, personalised package provided by a single carrier. Even customers that thought insurance was overpriced would consider the move.

In the USA one disrupter and innovator has leveraged that need and gap in the market.  

The GoAskJay Story

It began with an entrepreneur that started a single insurance agency that grew to multiple locations. The challenging experience of working with insurance companies, agents and clients helped to shape the vision for GoAskJay. We wanted to create a better way for consumers to find the right insurance products and services to fit their lifestyle in a fun and easy way.

So, we went to work to make it happen! We designed and created GoAskJay with countless hours from interacting with consumers and insurance professionals. We heard many horror stories and got many insights. And now we are proud to offer GoAskJay to you.

Focussed today on the personal and SME business markets customers can find choice and  everything they need in one place. The founders Uni and Bradly Jost have created a market place where customers can do exactly as the Guidewire says for the 55% of consumers who would consider consolidating all of their insurance policies into one, personalised package provided by a single carrier or as already delivered by the Josts personalised packages from one market place where customers only provide data once which is then leveraged across all areas of insurance making the UX effective and simpler ( and compliant with all different US Stare regulations before you ask.

And lest the large carriers think this is just a US play and SME- Uni Jost has her eyes on Europe and plans globally. Her model is just the one described above  with Ping An but applied in a US and European context. AI, Blockchain, big data- all effectively implemented.

Interesting times indeed.