The main theme of the linked article is the threat to US carrier profitability as loyal customers who buy home and auto policies from one carrier are motivated by rising auto premiums to unbundle and switch to other carriers. There is another very important theme that I find significant for all geographies; the parallel dissatisfaction of customers with those insurers with the sub-optimal digital transformation of buying, renewing, mid-term adjustments, and claims journeys.   

First let's look at switching and later, effective digital transformation using some real-life examples of how to counter the threat of dissatisfied customers.

Nicknamed the “Robinsons” by Progressive Insurance, consumers who double down on home and auto policies are a valuable demographic for insurers, and losing them raises profitability concerns in today’s market. That’s because these customers lower the cost of acquisition by offering the chance to sell multiple policies through a single transaction and are consistently among the most loyal — 45% have stuck with their current insurance provider for 11 years or more.

Maxine Croll writing for ALM PropertyCasualty 360 April 10th, 2023

Nearly a third of Robinsons also told J.D. Power they will definitely switch their home insurance provider if an insurer-initiated auto premium increase forces them to look for a cheaper auto policy. Buyers in the UK have always been keen "switchers"; in previous years loyal customers were penalised with higher prices than new customers making switching attractive. The FCA forced that practice to change but more than a tenth will shop around when it comes time to renew, largely because of price, research released in December by Bain & Company shows. And better deals can be had easily. A separate ValuePenguin study found that 92% of people who switched auto insurance providers saved money by doing so.

Croll continues  

Focus on customer experience

Providing a good customer experience, particularly through renewal and claim processes, can help offset price hikes and boost retention, Bain & Company found.

Customers whose premiums increased but were still satisfied with their overall renewal experience, largely thanks to helpful and timely communication, are 3.5 times more likely to renew with their current provider compared to those who had a negative experience. As long as their premium increased by less than 10%, they were also nearly equally as likely to stay with their insurer as customers who experienced no price increase.

Speeding up claims processing and completion, improving customer understanding of monthly bill statements, and working with agents to facilitate better claims handling could all be fruitful ways of boosting customer experience, the latest American Customer Satisfaction Index shows.

Insurers who set themselves apart from the pack by offering easy-to-use digital tools that allow customers to apply for coverage, make claims, update accounts and renew policies while proactively communicating with their users stand the best chance of holding on to them. That’s because 2 in 5 customers who faced issues with their insurer told PwC that a lack of digital capabilities made them likely to switch providers.

But it seems insurers’ digital offerings are often not living up to customers’ usability expectations. For the second consecutive year, satisfaction with US insurance companies’ digital claims processes has dropped, thanks largely to “clunky interfaces, infrequent updates and frustrating workflows that force [customers] to pick up the phone and chase down information,” J.D. Power reports.

Transformation is as much about the business models as the technology; just digitising aspects of claims journeys is no guarantee of customer and employee satisfaction. 

What makes or breaks the digital claims process for the majority of customers? Digital FNOL often still asks too many questions or is just plain hard to fill in. Customers are used to a conversational style of UX and resist formalised "form-filling" so make sure your approach uses such an approach.

Another potential hurdle is digital estimation. Policyholders were put off when after submitting photo evidence, they still needed to arrange an in-person estimate, usually preferring to communicate electronically with the estimator through video chat. Customers who were able to notify their insurer of a claim via a website, WhatsApp, or a mobile app were happier than those who had to do so via a call center. Mind you, customers of all generations want to be able to talk to claims handlers when needed. BUT- they then want the claims handler to have all the information to hand and not have to ask questions for which the customer has already provided relevant answers. 

Another simple, and often missing, vital aspect is "Save & Resume". The capability for a customer to start a claim on one device, say a phone at a roadside accident, and then submit further evidence using maybe a laptop or iPad later in the day picking up at exactly the spot they finished on earlier. The claims handler must also enjoy the same current view of all information submitted to avoid having to repeat questions already answered. 

This reminds me; throughout the digital journey always make it easy for a person to speak to someone. In fact, here are more Tips for Improving Customer Experience.

Digital transformation cannot be just for parts of the process but must be approached across all aspects of the business.

One trend in recent years is for insurers to invest in expensive and complex core systems, try and transform all aspects leveraging the many modules comprising those core platforms and coming a cropper- especially when it comes to claims. Claims are not simple, they vary from accidental damage to CAT events; high volume/ low value and low volume high value. From a damaged or lost gadget to a fire-ravaged factory. 

After the pain endured implementing one type of claim, typically motor, the cost/time. resourcing involved leaves the scars and the appetite to repeat that diminishes. The antidote to this problem is seen below in three partnership announcements:

  1. WNS and RightIndem
  2. esure and RightIndem
  3. The AA and RightIndem

1) WNS Group is a major and global BPO enterprise relied upon by 55 large insurers to transform all aspects of the business. It already manages over 30 million claims transactions a year with a claims spend of $ 13 billion. WNS announced a global technology partnership with RightIndem to deliver transformation across all aspects of claims from eFNOL to claims disbursements and to advance straight-through processing (STP). 

WNS is renowned for its benchmarking and attention to KPIs and SLAs so it's worth looking at the ambitious results it claims to deliver.

Efficiency and effectiveness cannot be gained at the expense of customer satisfaction so having a transformation strategy that addresses all aspects of the business from back-office to front-office and customers is vital if these KPIs are to be achieved.

2) esure is a UK carrier that has gone all in for transformation with the ambitious goal its CEO David McMillan describes as "Fix Insurance for Good". Not just claims but the whole business. esure not only re-platformed on modern age CoreTech from EIS but partnered with AWS, EY, and RightIndem for a complete approach- customer experience across the whole business from buying insurance to renewing and settling claims. 

3) The AA , also decided to work from the customer backward to provide the UX and customer journeys that deliver customer satisfaction, staff satisfaction, efficiency, and cost reductions. Not just for insurance but roadside assistance and triage; even catering for insurance claims for its members that insured vehicles with other carriers. Listen to how the Managing Director tackled the opportunities in this podcast by Insurtech.

 In all three examples above the technology platform vendors are collaborating with carriers to enable technology ecosystems that deliver transformation across the whole business. The older core systems and claims platforms can deliver this but the time, cost, capabilities,  and resourcing necessary can be too much of a burden. 

In times when claims and Opex inflation is driving rising premiums, it becomes even more vital to seek modern, cloud-native technology platforms with micro-services, rich API layers, and integration capabilities that enable agile deployment to anticipate changing customer motivations and behaviors. Platforms that empower a carrier, broker or MGA to choose between all the platforms and software to provide the optimal mix of digital and augmented human engagement to satisfy customers e.g. 

Traditional core insurance platforms Guidewire, Duck Creek, Majesco, Pega, Innovation Group, and so on. Good on the breadth of functionality but often lacking in specifics e.g., claim management. And traditionally involving Capex and high annual licensing costs though that is changing.

Modern SaaS, Micro-service, rich API architecture core platforms Duck Creek, EIS, FintechOS, ICE,, Genasys, Duck Creek

Quote & Buy, MTA & Renewal Platforms like Go-Insur, HUGHUB, iptiQ enable an insurer to allow a customer to interactively manage all their policies from one dashboard

Digital Claims Platforms RightIndemSnapsheet, ClaimsGenius, Claims Technology, Salesforce Industries, Five Sigma, 360Globalnet etc

Ecosystems Providers incl. telematics data exchanges: Verisk, CoreLogic, LexisNexis Risk Solutions, Mitchell International, CCC Intelligent Solutions and Arity

Estimatics Solutions Tractable, Audatex/Solera, ValueChecker, BeValued, SLVRCLD

Counter Fraud  Shift, Friss, Quantexa, Synectics 

Unstructured data analysis and automation Omni:us and

Liability BAIL

Telematics Service Providers: Movingdots, Octo, IMS, True Motion, Cambridge Mobile, Vitality Drive and The Floow

Shared Mobility Systems: Uber, Lyft, Enterprise CarShare, Zipcar, Car2go, GIG, Turo, Getaround

Combined claims services and technology providers Crawford & Company, Sedgwick, Davies Group, Claims Consortium Group. Control€xpert etc.

No-Code/Low-Code app building platforms from Unqork, Netcall…

Embedded insurance Wrisk, Qover, Wakam etc

 However good the basic insurance products are, without such platforms the threat of customers switching just becomes more likely.