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The rise of internet and digital channels, as well as the emergence of price comparison websites, have changed how people research and buy insurance.
Choice and ease of comparison have offered customers greater control over their provider and critically, their cash.
With these factors in mind, we surveyed 1,000 UK car insurance consumers in March to find out how they rated the customer experience of dealing with their car insurer.
Somewhat surprisingly 90 per cent told us that when it comes to contact channels they prefer to call. Previous research from eDigital found that only 45 per cent of consumers overall are happy to use the phone. Additionally, research from Dimension Data predicts that digital will overtake voice for all customer interactions within two years.
So if consumers increasingly prefer typing over talking, what is going on in the insurance sector?
We started to explore the way car insurance brands are communicating with their customers.
In a recent insurance technology article in computerworlduk.com, Gordon Rutherford, head of marketing and e-commerce at AXA Insurance, commented: “Insurers still use a language that is alien to customers.”
Within the same article, Andrew Brem, chief digital officer at insurance group Aviva adds: “If I think of the nomenclature of financial services, even on digital you are filling out a form. The button says ‘apply’. When do I apply for something from Amazon? This notion of a form, of applying, of a quote or of acceptance is entirely outmoded.”
This use of language to dictate a very traditional process could also be found on the claims pages of many car insurers websites, such as “call us as soon as possible after an accident.”
Perhaps the reason customers “prefer” to call, is because we are told to.
Whilst 85 per cent of insurers had a Twitter account, we found that only 29 used Twitter direct messages to resolve customer queries.
The same small proportion actively promoted the touch point as a communication channel via their website.
Incredibly, a fifth didn’t even offer email contact and only 15 per cent offered live chat support to customers using their website.
It seems that insurers have been so slow to adopt new communications technologies. They are forcing customers to revert back to making calls, which they see as old-fashioned and inconvenient.
That’s going to make the brand seem old-fashioned and inconvenient too.
And customers are noticing. Consultants Engine asked 1,000 consumers to rank 14 UK sectors on their customer experience last year and the insurance sector was rated dead last.
While insurers may not be proactively using digital communication, their customers are, to share their experiences – good and bad – with friends and strangers.
Our own research found that more than half of car insurance customers (55 per cent) are unlikely to recommend their insurer, almost half (47 per cent) are unhappy about their dealings with their insurer and a third thought their insurer wasn’t doing enough to engage with them.
And poor communication leads customers to have doubts about other areas of a brand’s service – 33 per cent said they worried their insurer wouldn’t pay promptly and efficiently if they made a claim.
It works the other way too. While only 15 per cent of the insurance providers we analysed offered the following four different channels of contact – voice, email, twitter and live chat – tellingly, 77 per cent of their customers said they would be likely to recommend them, against a survey average of 44 per cent.
There are additional requirements around confidentiality and security that can make it difficult to do business through some channels, but it’s a question of understanding which queries can be managed and how far, and which need referring to another channel.
Given that 15 per cent of them have managed to make it work, we have to ask why the majority have yet to embrace a multichannel model, let alone an omnichannel model.
From the same 2016 computerworlduk.com article reference earlier, Andrew Brem discussed the sector’s approach to personalization. He said: “Historically we treat every application as if we had no clue about who was applying.”
Webhelp’s chief customer solutions officer, Helen Murray, adds: “Data and applied insight is the key to a successful omnichannel customer contact model.
“Insurance providers are in a unique position with regards to the data they collect on their customers and their interactions but, unlike other sectors, they are failing to use that data to get closer to knowing their customers as individuals.
“Personalisation is the untapped opportunity for a real revolution in insurance customer experience.”
The shortcomings of the insurance industry are thrown into sharp relief when we look at the advances made elsewhere in the financial services sector and particularly by banks, which face many issues of regulation, security and confidentiality that are common to insurers.
The use of secure apps is now standard across the industry, with every high street bank also having a presence in the app store, enabling their customers to resolve queries through their smartphones and driving traffic away from voice.
Many banks have launched dedicated digital strategies to great fanfare, while most insurers appear to have been noticeably trailing in their wake.
Insurance is already a sector that suffers from appallingly low levels of customer loyalty – a quarter of UK consumers have dumped their car or home insurer in the last year – so why are so many insurers missing this golden opportunity to enhance their relationships with their customers?