Here at Digital Insurance, we love to talk about how insurance companies are innovating and making life better for consumers. Whether it’s telematics that helps underwriters adjust pricing accurately, or AI-powered customer experience that helps guide customers through a digital process. Year after year, insurance companies have tried new insurance policies like without pain and without complications like possible.
See how I have highlighted the word without pain and without complications. Two words that mean a change to something that was already there unpleasant, from the beginning. You see, unlike service industries such as restaurants and banks– which provide services that provide a good experience for consumers – insurance companies are in the business of disaster. Unfortunately, for many people, their first interaction with an insurance company is also one of the most important moments in their life. The First Notice of Lossor the first report given to the insurance agent after the loss, theft, or damage of the insured property- can make or break the reputation of the insurance company.
To illustrate the types of situations that insurance companies have to go through, let’s put ourselves in the situation of someone who has an unknown security. We’ll call him Johnny. Johnny is a 35-year-old single father who makes enough to feed his children and pay off his mortgage. Knowing his financial situation, Johnny buys standard homeowner’s insurance – which covers mill issues – covering fire and wind, theft, and more. A few years later and Johnny is doing well for himself – he pays his bills on time and takes care of his house as best he can. Both Johnny and his insurance company seem like a match made in heaven.
Little did Johnny know, his medieval house was rotting at the foundation – an unknown termite was wreaking havoc on his house. Five months later – kaput – the wall is falling. Unbeknownst to Johnny, the decisions he made had nothing to do with structural damage – the onus was on him to act wisely.
We’ve all been there, you choose a policy that fits your budget only to find out, a few months later, years later that the policy you bought left you with too much insurance. It’s a situation that consumers hate and insurance companies want to avoid. In Johnny’s case, the damage to his home and his relationship with the insurance agent may not be possible. That being said, while events like Johnny’s seem like tragedies on the surface, they don’t have to be.
Darci Darnell, head of global and Americas clients at Bain & Co, believes FNOL should not be a coup de grace for the insurance industry. He believes the way insurers deal with “moments of truth” has the potential to be as exciting as it is to anger customers.
“We found that there is an inverse relationship between the severity of a traumatic event for each customer and their likelihood of wanting to talk to someone at that time. In situations such as a house flood or a car wreck, very few consumers are satisfied with digital information,” he says. Darnell. “They want to talk to someone because at that point, they don’t just need to do something, they’re looking for sympathy, support, guidance, and advice.”
According to Darci and other writers of Bain & Company’s Report on Customer Behavior and Loyalty in Insurance, the key lies in delighting customers at the unit level. Savvy companies understand that building relationships throughout the process is an opportunity to build customer loyalty for years to come.
“Customers do not report incidents or complaint files very often. This means that customers often judge their work on things that seem to be of little importance, such as a request to change the payment address or a question about delivery. Trustworthy managers know that one bad incident, even at the time They work hard to constantly improve the customer experience at all levels,” the report says.
It is the long-term customer retention that differentiates successful insurers from their competitors. After researching about 174,000 insurers in 74 countries, experts at Bain found that the best performing companies offer “natural” services that not only increase the number of customers and their insurers but also provide value beyond their expectations. insurance company.
“With environmental services, insurers can interact with their customers more often and, in doing so, create stable relationships with them. Instead of providing services for accidents and car theft, for example, insurance can be part of an environment that provides the edge of road. assistance, tools and programs that monitor and reward safe driving, as well as maintenance information and discounts for maintenance,” the report said.
If you follow our website, you can learn about some of the telematics features offered by home insurers- Progressive’s Snapshot program and Allstate’s DriveWise are just a few in the list of natural data-driven products that come to mind. It may come as a surprise to know that the future of environmental insurance may not come from the insurance industry.
Large retailers with access to large and loyal customers are uniquely positioned to disrupt the existing insurance market. Let’s take the case of Bain, the British supermarket chain Tesco for example. For many years, they have been offering their Tesco Bank insurance to customers who want to combine Tesco store membership with the company’s banking and insurance products – including home and car insurance. Customers who sign up for their Tesco club card and insurance program are offered discounts on insurance plans and in-store purchases – leaving customers satisfied on the road.
In a rapidly changing market, where consumer perceptions are based on a company’s ability to deliver value through multiple channels, flexibility is essential. According to the authors of the Bain report, success in the insurance industry today depends on a company’s ability to adapt its thinking to the needs of an ever-changing and dynamic market of customers.
“Incumbent insurers are not waiting to find out. Many recognize that big changes are needed, but they struggle to move forward quickly. Others are trying to disrupt themselves by creating a company-within-a-company that wants to be digital. , cheaper, and more sustainable for customers. The jury is still out. many of these efforts, but insurance companies are learning that they can’t just install cheap, digital systems on old-school systems. Think hard about their approach,” the report said.