The Journey to Understanding your Insurance Customers

Insurance carriers have a unique opportunity: They have access to powerful technologies and a wealth of information that can help them to better understand their customers and provide an enhanced customer experience. 

Insurance companies recognize that customer service, communication, and personalization — key tenets of any customer experience — are major components of profitability and growth. A 2017 PWC survey of over 100 global insurance company CEOs revealed that the number one objective of these CEOs was to “get closer to their customers and to better understand their evolving needs.” And this priority remains today. In a March 2021 poll by Celent, “improving customer experience” was identified as the top focus (63%) for insurers. But what does it mean for an insurance carrier to be customer-centric and why is it so challenging?

Expectations affecting Insurance

The first big change that carriers must contend with is a shift toward more personal, digital experiences. Insurance customers — both consumer and commercial — have become accustomed to all their transactions being highly relevant, personalized, and seamless. They expect (and often demand) easy and quick access to information and high-quality service.

At the same time, technology changes mean that customers also have greater access to information than at any point in history. Instantly available search results and publicly accessible social media channels have empowered customers and prospects to research and compare insurance companies, policies, prices, and services. The information transparency means that competition for a customer’s loyalty is fiercer than ever.

Finally, the connected car, connected home, and connected self are generating an enormous amount of data. These “Internet of Things” (IoT) devices contain sensors that can provide insights into how customers live, work, drive, exercise, sleep, and more. With appropriate permissions and privacy controls, such data can have a transformative effect on a carrier’s ability to understand its customers — provided that it’s able to access and utilize that data.

Inhibitors to Improving the Customer Experience in insurance

What have been the main barriers keeping insurance carriers from advancing their digital transformations and becoming more customer-centric? These “inhibitors” can be summarized into the following categories and are covered in greater detail in this whitepaper:

  • Legacy Systems 
  • Lack of Investment and Management Focus
  • Changing Business Models
  • Data — Too much and Too little
  • The Hunt for Talent

Those carriers that embrace the use of data and analytics will realize operational efficiencies, improve customer interactions, and compete more effectively. Yet they need to address the above issues to make this a reality.

The Opportunity for Insurers

The opportunity here is to truly change the way insurance carriers operate in order to become more customer-centric organizations. This requires a commitment to continue the journey. I use the word “continue” because insurers have already been driving forward on their digital transformation journeys. It just does not happen overnight. With the acceleration in digital activities brought on by the pandemic, it is now about keeping momentum to move the strategy forward. 

It should be noted, however, that what an insurer knows about their customer has been primarily focused on evaluating an individual’s risk factors rather than truly understanding the customer and their needs. In fact, a multidimensional approach is needed, viewing customers through the lens of individual, account level, and 360-degree views, as well as past/present/future value, plus lifetime value (LTV) and customer acquisition cost (CAC) metrics.

In order to get from here to there, insurance companies need to focus on data management. Specific areas of opportunity for insurance companies include:

  • Data Management Tools and Processes
  • External Data/Big Data/Data Sharing
  • Data Privacy and Security Regulation
  • Data Monetization

Carriers who pull this off will be rewarded with greater customer loyalty, increased customer retention, and an increased customer wallet share.

To find out more about advancing the customer journey in insurance, read this paper written by Agile Insurance Analytics: Will My True Customer Please Stand Up? The paper explains the barriers keeping insurance companies from better understanding their customers and advises on how to enable your customer experience strategy. It also includes a checklist of actions insurance companies can do right now to begin their proactive journeys toward digital transformation focused on the customer.

Download the whitepaper.

Monique Hesseling
Managing Director - Insurance Industry
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