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Insurance companies need to embrace CX and transform for survival

Blog
17th January 2018

Research undertaken McKinsey in 2017 titled “Time for insurance companies to face digital reality” suggests that insurance companies need to work harder to improve the customer experience (CX). The importance of this finding is not just that customers will be happier – the McKinsey research suggests that a focus on CX is critical as insurance companies undergo digital transformation programmes.

McKinsey believes that this is a question of survival. Insurance companies that do not rethink their business, transform and offer innovative digital services, and centre the experience around what the customer wants may soon cease to exist.

When you look at what insurance customers want, the message is clear – insurance customers have very clear expectations when it comes to dealing with insurance companies:

The thing is insurance is not like most products. It’s often a compulsory purchase, such as car insurance or desirable because it creates peace of mind, such as home contents cover. Customers want to pay as little as possible, but they also expect to be treated well.

The McKinsey research suggests five pillars that all need to be considered if any insurer wants to successfully manage a digital transition:

  1. Innovate: customers learn about products online today and want to use a wide variety of channels when communicating with their insurer. Embrace this change and explore how technology can create entirely new products – such as wearables, health monitors, and car trackers.
  2. Customer Ownership: loyalty is a thing of the past. You will only get customers to renew if you build a relationship with them. Use their information and show that you understand their needs – offer relevant packages and deals.
  3. Efficiency: explore how digital changes can be an opportunity for the business, not just a threat. For example, digital CX provides an opportunity to build deep connections to customers with the ability to create Big Data sets that can be analysed to explore customer behaviour.
  4. Scale: App culture means that small players can grow and scale quickly. Anyone with a great idea can launch their business at relatively low cost. Your main competitor next year may not even exist today. Think about how the market is changing and how you can build better customer relationships to drive scale.
  5. Speed and Agility: are your existing systems holding back innovation and new products? Being agile is essential today – those systems may drag your business into irrelevance. Consider how your business would be functioning if your technology supported new ideas from the business team rather than preventing them from trying anything new.

Our white paper Insure Against Loss examines in detail the opportunities in the insurance sector. In this paper we will explore how delivering an exceptional customer experience can increase customer engagement levels and reduce customer churn.

It’s clear that CX sits at the core of all these suggestions from McKinsey. The insurance business needs to embrace the digital revolution and find new products and ways to interact with customers, but the experience must always be positive and easy. What do you think about the McKinsey research? Leave a comment below or contact me on LinkedIn and let me know.


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Helen Murray
Article by: Helen Murray

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