Some call it a paradigm shift but it’s really more of a course correction, admittedly one with bells and whistles. I’m referring here to the growing (and long overdue) realisation by the insurance sector that it needs to become customer-centric in order to prosper in today’s markets.
You would have thought that this was something that was written into the DNA of insurance: Find out what people want and keep on giving it to them. However, the fact of the matter is that, for many years, business was able to do that pretty much on its own terms: consumers were isolated and lacked information; competition was localised (and thus limited). As a result, companies—and here the financial services industry is a big offender—were able to focus on producing and delivering product that, frankly, seemed to suit their distribution channels (rather than their customers) wanted.
That’s all changing as connected consumers have gained direct access to vast amounts of information and their opinions resonate across the digital space. And, as important, insurance customers’ expectations are increasingly being influenced by the service experience provided by other industries. Insurers are under pressure to provide a customer experience of comparable quality.
In short, the customer is gaining the upper hand and the focus is shifting from the product (which can be easily replicated anyway) to the customer experience—or from a product focus to a solution focus. Customer experience has become a key differentiator, and that’s something with which insurers need to come to terms.
They probably have a way to go. As our Consumer-Driven Innovation Survey showed a few years back, there’s a gap between what customers expect and what they get from insurers. For example, nearly two-thirds of respondents said it was very important for their insurer to provide clear and easy-to-understand information on their policies, but only 27 percent said they were very satisfied with their insurer’s efforts to do so.
This experience gap is similarly high in several other areas, including:
- Providing prompt and effective service/ answering requests in a timely manner.
- Giving customers access to the information they need whenever they need it.
- Making customers feel their needs are understood—and providing personalized help in facing the challenges of life.
- Providing customers with the ability to compare rates and switch plans.
There is work to be done, in other words, because, as I shall discuss next time, the business case is strong.
Read our point of view based on this research, Delivering exceptional customer experiences.