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How insurers can grow faster by improving the customer experience

Blog
9th January 2018

Research by McKinsey has found that the difference between high and poor performing insurance companies is the experience customers have when interacting with their insurer. In fact, the McKinsey research goes so far as to suggest that if you want your insurance business to grow then customer experience needs to be a strategic priority.

In their research, McKinsey state: “Companies that offer best-in-class customer experiences grow faster and more profitably. To reach this level, insurers must relentlessly improve customer journeys across channels and business functions.”

But more effectively managing the customer experience is not just about damage control – trying to prevent customers publishing negative comments about their experience online. It has grown into a key differentiator. In a world where insurance companies look and feel very similar and price comparison websites allow dozens of companies to be compared by price and service level, creating a great experience is one of the last remaining ways in which an insurer can stand out from the crowd.

There is hard data to confirm just how important CX is to the insurance business. The McKinsey research found that over the past five years American car insurance companies that have consistently been rated best in class for their customer experience generated two to four times more growth in new business and 30% higher profitability that those with an inconsistent focus on CX.

The key for insurers though is to understand what customers really want. What are the customer priorities a brand should focus on if they want to deliver a great experience? McKinsey found that these are the top five customer service considerations for American auto insurance policies:

The amount paid out was only number 12 on the list of priorities for these American customers. Note that what these customers really want is courteous, knowledgeable help from their insurer in a way that is transparent, quick, and easy. Just make it easy.

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 can be an important way for one insurer to stand out from the crowd, but if you are focused on the wrong attributes – such as offering to pay out more than other insurers – then you are not likely to succeed. The McKinsey research really demonstrates the importance of CX for insurers, but more importantly, the importance of understanding the customer journey and what can really give customers an easier and more satisfying experience. 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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