Why is Customer Engagement in Insurance so important?

Daryl Henwood, CRM Industry Lead for Financial Services at Hitachi Solutions Europe, presents highlights from the latest in our series of breakfast briefings with The Insurance Network. The topic: Why is Customer Engagement in Insurance so important?

I don’t know if anyone else heard it, but the sound of a pregnant pause was clear. There was definite thinking time as we processed the question: “Why do you want to engage? Why does the insurance industry want engagement?”

Why is Customer Engagement in Insurance so important?

This week was the latest industry breakfast in the series, with our partner The Insurance Network.

Our meeting began with a detailed and honest conversation from our chair about his company’s telematics product, and the challenge of engaging with new drivers (those paying for the policy are typically parents).

Talk evolved into the difficulty of engaging millennials, and the perceived (more about that later), importance of digital channel communication. After all, unlike traditional telephone call centres, digital channels are continually evolving and there is no end state.

At which point, someone asked why we wanted to engage in the first place, and the room paused…

Today’s article looks at the importance of engagement during the pre-sales process in the insurance industry. How do we create a positive customer connection when as little as a quarter will get in touch before they buy?

Transaction vs. Emotional Connection

The insurance industry has been historically focused on the transaction, and discussion used to be dominated about internal process improvement. But, with the recent advent of internet-driven big data, all eyes are now on ways to put the customer at the centre, with focus shifting to understanding and creating an emotional connection.

We know that when consumers spend, they’re sure that they get the best value for their money. In insurance, where so much still comes down to price, and where the competition may be £150 less expensive, new or repeat buyers will spend with businesses that they feel good about. They will continue to ignore or even oppose, those that provide them with no value. That’s where engagement, the emotional connection and added value come into play.

Despite digital channel explosion, consumers have become less predictable. The number of ways that they research and engage with our brands has increased. The challenge for insurers is how to understand and manage a quality cross channel experience, when the opportunity to create a relationship can be a split second.

David vs. Goliath

The pre-sales experience is typically coloured by the assumption that insurance is over-priced and dry. During this phase, the sphere of influence has changed. Whereas heavy-hitting influencers used to be CEOs and brands, today’s customers talk to their friends, social media and read reviews before they buy. Typically, these influencers are less partisan that a bought-media advert and brand perception will take a further battering as social media posts concentrate on higher premiums and bad experiences, rather than the added value that their insurers give them.

Yet more doors are shut in our faces when we boost our proactivity. When we try to engage by phone we’re often unanswered because of caller screening. When we try email, we’re lost in junk mail, and when we try SMS the younger generation switch to Snapchat and Instagram.

But that doesn’t mean that we can’t understand customer behaviour during this research period, that we can’t find ways to enter these spheres of influence, or that customers are under the radar until the point of purchase. There’s a trend that the more uncomfortable someone is with a topic, the more likely they are going to be to want to hear a friendly voice, and insurance buyers still like to talk. Today, buyers’ research is likely be digital, but their follow up could be a call centre or web-chat.

Never an Ambulance Chaser

When we see, or hear negative brand perception, there’s a risk that we could become reactionary, chasing whichever channel causes us the most problems. A better more positive pre-sales approach is to look to understand all customer touch-points, to realise that every journey will be unique, and that best chance of true engagement is to create a seamless experience in any one of these channels.

Today’s great customer service is seen in the shape of Amazon and John Lewis, where online information, contact channels, feedback and response are slick and joined up. There’s a sense that if insurance customers feel important and fulfilled across any channel, they’re more likely to respond positively to our brand, to share information and to renew.

As an insurer, if we know how the customer is feeling, we can add more value, we can design better products and we can reward. Our loss ratios in fact, share a direct relationship with our engagement.

Make Engagement Happen

We’ve long passed the stage where we seriously need to ask why engage needs to happen. But there’s still the difficulty of writing a business case to justify hard spend on the ‘customer experience.’ It still sounds such an ephemeral subject.

So many insurers still have a culture of product-led operations and related customer journeys. As one attendee joked this week: “We should organise ourselves across customer groups rather than product lines. Wouldn’t that be radical?!”

Approach this omni-channel approach as you would any innovation. Be clear about the improvements you’ll be able to measure, and use the customer insight that you already have to justify a different approach and to attract business sponsorship from the beginning.

Insanity is doing the same thing over and over, and expecting different results, said Einstein. It’s time for a change in our customer approach.

Hitachi Solutions’ Approach to Customer Engagement Happen

A Microsoft Partner, Hitachi Solutions are experienced in implementing the user-friendly, intuitive, and easy-to-integrate Microsoft Dynamics 365 to enable a flexible and consistent approach to customer engagement. With customer insurance histories stored in one place and insight into all past customer interactions, insurance businesses can strengthen their agent engagement and marketing outreach. Read our Indiana Farm case study. 

Read more about customer centricity in the insurance market from Hitachi Solutions or Contact Daryl Henwood: [email protected]