Insurers and their customers interact almost exclusively digitally, making it crucial for carriers to invest in digital tools and strategies that provide frictionless, end-to-end customer journeys for policyholders to have an ideal customer experience.
In landmark research regarding customer experience (CX) in the insurance industry, McKinsey found that CX performance has a huge impact on the financial success of insurers. According to the report, CX leaders in the insurance industry outperformed their peers in total shareholder return (TSR) by 20 percentage points for life insurers and 65 percentage points for P&C insurers in the five years from 2017 to 2022.
In this guide, we’ll detail the benefits of providing a great policyholder CX and go through some specific strategies for keeping up with industry innovation to the mutual benefit of both insurers and the insured.
Why CX Drives Value for Insurers
The very nature of insurance is that it’s often relevant in the lives of policyholders when something has gone wrong or when something stressful happens. For that reason, the customer experience that insurers provide to policyholders and their providers takes on special importance when it comes to the potential success for carriers.
Let’s take a look at some of the primary ways in which insurers benefit from investing in policyholder CX:
- Improves customer satisfaction, retention, and loyalty: Policyholders have various choices regarding insurance carriers. Whether shopping for medical, life, property, or casualty insurance, they’re sure to meet many agents happy to sign them up or move them from one carrier to another. When customers have a smooth and positive experience when making claims and generally interacting with their insurer, they’re far more likely to be happy customers who stick around in the long term. The retention of policyholders, in turn, is a large factor in the overall financial success of any carrier.
- Provides a differentiator against competition: Making insurance claims isn’t typically on the list of favorite activities for most people, and so when customers have an easy and positive interaction with their insurer, this functions as a unique value proposition that helps your insurance agency be more competitive in a crowded market of carriers.
- Improves operational efficiency: When policyholders have a poor customer experience, they often require more handholding when filing a claim, understanding the outcome, and making the necessary arrangements with providers. This undermines the efficiency of your organization, which decreases your financial upside. However, when the customer journeys are explanatory, smooth, and pleasant, your customers need less service, and your efficiency improves.
Overall, an investment in CX helps carriers ensure that their customers are happy and well-cared for. This means that they’re more likely to stick around in the long term and use up fewer internal resources, which in turn increases revenue for individual carriers.
CX Challenges Insurance Companies Must Overcome
In this section, we’ll go through some of the common challenges insurers face as they execute their CX strategy and some key tips for overcoming these inherent difficulties within your organization.
1. Creating frictionless end-to-end customer journeys
According to the McKinsey report, on average, customers interact with their insurance carrier once or twice a year, which is far less than when they interact with other institutions, such as banks. For that reason, insurers have fewer opportunities to prove their value and worth to their customers and must nail down the quality of the customer experience every time.
Unfortunately, many carriers are missing the opportunity to do so. Around one in six customers report that they don’t hear back from their insurers after receiving financial advice, and of those who do hear back, 40% report a disjointed, confusing experience involving interactions with two or more people. This type of friction is exactly what causes policyholders to churn.
Let’s review some of the top strategies for avoiding friction and delivering the right customer experience every time.
Make sure your team understands and empathizes with the customer experience
Digital insurance products are often complex and confusing for customers, whether buying or renewing policies, researching options, onboarding to a new carrier, or submitting claims. When you work for a carrier, it’s easy to lose sight of current and potential customers who don’t have the internal knowledge you do about your digital platform and insurance in general.
It’s important to ensure that your whole team is aware of customer confusion and difficulties, so every customer touch point is built with that in mind. Here are some examples of how carriers and brokerages can create empathy for the customer experience:
- Have team members across the organization conduct user interviews or listen to calls with customers
- When onboarding new employees, have them try to do the tasks that customers typically do before they learn the platform in-depth
- Track and report on metrics like customer satisfaction and approval ratings so that your team can understand when and how users experience frustration
Prioritize self-service experiences for policyholders
For many years, it was a given that learning about policy options, signing up for insurance or renewing policies, and submitting claims always involved interacting with insurance agents. However, around six years ago, Lemonade completely disrupted the insurance industry with a self-serve approach.
Lemonade allowed customers to do all of their insurance-oriented tasks independently via their app and web platform. They also prioritized clarity and user experience, making it smooth and pleasant for the most part.
After this industry-wide disruption, customers began to expect the ability to do at least some of their necessary interactions with insurers independently. Customer self-service experiences make you more likely to decrease friction for your customers and use fewer internal resources when customers need to complete simple tasks.
Offer customer education and proactive support
An important element of transforming customer experience is ensuring that your customers have the knowledge and support that they need, exactly when they need it. Typically, this involves educating your current and potential policyholders and proactively providing support when needed.
Customer education and proactive support sound lofty and time-consuming, but there are some relatively simple strategies for decreasing friction with knowledge and well-timed support. Here are some examples:
- Monitor the user journeys on your platform for typical workflows with a tool like Whatfix Product Analytics. For example, you can monitor every step of the customer journey when customers need to submit a claim. With a product analytics tool, you can easily see where customers drop off or contact support, indicating that your customers need help or more information at that point in the flow.
- With this knowledge about the user experience at different points in the customer journey, you can automate outreach to users, offering to help where needed or direct users to self-serve information, such as your knowledge base, at exactly the right moment using a digital adoption platform (DAP).
Meet your customers where they’re comfortable with an omnichannel approach
Allowing customers to communicate with you and carry out tasks related to their policies where they choose is a great way to improve the overall quality of a policyholder’s experience. Rather than taking a one-size-fits-all approach, let your customers choose what works best for them with an omnichannel CX approach.
Here are some examples of where insurers can offer services that meet the individual needs of different policyholders:
- Websites
- Mobile apps
- Social media
- In-person meetings with agents
- Text messages
- Phone support
Offering a variety of touchpoints means that your customers can choose what works best for them, increasing the likelihood that they get the information they need with less friction.
Partner with Whatfix to guide your customers
Many insurance carriers and service providers partner with Whatfix to guide their customers, avoiding the typical confusion and frustration among policyholders.
With Whatfix, you can provide contextual in-app guidance at moments in each workflow that you know can be confusing for customers. For example, a pop-up can appear with a helpful tip for completing a certain task, decreasing the likelihood that a customer will make a mistake or need to reach out to support. Whatfix also enables you to create beacons and CTAs that lead to self-serve resources, such as Self Help, a dynamic knowledge base.
Using the Whatfix DAP, your team can create a customer experience that significantly improves customer engagement and satisfaction.
→ Guide users through complex apps with contextual, role-based in-app guidance.
→ Support users at the moment of need with AI-powered Self Help and embedded workflow assistance.
→ Analyze user engagement to identify friction points and optimize business processes.
2. Building digital capabilities that enable policyholders
Across all industries, the demand for digital and self-serve options is rising: according to Salesforce, 53% of customers prefer digital channels when engaging with companies. When they aren’t sure what to do next, consumers want to be able to help themselves. For example, Zendesk found that 70% of consumers expect a company to have a self-service portal or content available to them.
The insurance industry is no exception, with Sure finding that 64% of Digital Natives believe insurance should be overwhelmingly purchased and managed online. Consumers expect features like digital payment processing, self-service online portals, digital claims submission, online policy renewal reminders, alerts for policy changes, and more.
However, McKinsey found that although digital services are becoming a customer standard, policyholders are often underwhelmed: more than 30% of insurance customers are not satisfied with the digital channels available, and only 20% of customers say that digital channels are their top choice for interacting with their insurer.
So, on one hand, customers want to go digital, but on the other hand, the insurance industry isn’t necessarily providing great online experiences. By using customer analytics to create seamless digital experiences for your policyholders, your agency can set itself apart and offer customers the digital services that they want in a way that works for them.
To create a data-driven digital strategy, carriers must invest in product analytics capabilities to track customer engagement, benchmark current usage, and identify areas of consumer friction and opportunities for improvement.
If your team monitors and analyzes user behavior analytics, you’ll be able to understand where users struggle and to continuously iterate to improve the digital customer experience.
3. Balancing AI and actual human agents
Before your team goes all in on digitalization, it’s important to formulate a nuanced strategy that meets all of your customers’ needs, avoiding shiny object syndrome regarding AI transformation. GenAI is revolutionizing the industry with tools from digital assistants for policyholders, predictive analytics, intelligent claims processing for faster resolution, and more. However, interestingly, McKinsey found that an omnichannel approach may hit a certain sweet spot for customers.
According to the McKinsey report, “Our survey found that agents and advisers are still the highest-rated channel for customer satisfaction, and 20% of customers report that they would likely switch insurance carriers if their adviser left. Life customers who speak with their agents at least once a quarter have an average customer experience score of approximately 50% compared with roughly 30% for those who speak with their agent annually and zero for those with even fewer touchpoints.”
So, what is your organization to make of these seemingly contradictory insights? Customers and carriers benefit from utilizing AI to make day-to-day insurance tasks easier, faster, and more intuitive. However, utilizing your team of insurance agents to build relationships if a situation requires human intervention can make the difference between a satisfied and an unsatisfied customer who sticks around in the long term.
Effective insurance CX is a delicate balance between harnessing the power of technology and offering the human touch where it’s appreciated and doesn’t make insurance tasks less efficient.
4. Infusing CX personalization to cater to various policyholder preferences
Once you’ve aligned with your team on an omnichannel approach fueled by technology but with a human touch, it’s time to get more specific. McKinsey found that communication channel preferences with insurance agencies can vary based on customer journeys and segments.
Regarding researching policies, learning about insurance options, or making account preferences, roughly half of the survey respondents prefer to speak with an insurance agent or customer service representative, while the other half prefer to use digital channels, such as websites and chatbots. For tasks such as these, the best practice in favor of customer satisfaction is to allow customers to choose their preferred mode of communication, personalizing their journey.
However, for more complex customer journeys like buying a policy or resolving a significant issue, more than 70% of customers prefer an in-person interaction with an insurance agent or a third-party representative. It’s crucial to recognize these more dynamic situations as good opportunities to build a great customer experience by offering time with your team of agents.
This personalized, omnichannel approach is likely to encourage high customer satisfaction, but it’s also important to note that as technology evolves, customer preferences may change. Stay on top of customer feedback and industry trends to make sure that your agency is offering the best possible experience.
You can use tools such as a digital adoption platform (DAP) to save customer communication preferences as properties, and then continue to serve users according to what they prefer. This personalization helps make the customer experience smooth and intuitive.
5. Supporting insurance agents and employees to adopt new CX initiatives
As your organization iterates on its approach to CX, it’s important to address the pain points of your employees and agents on the front lines with your policyholders, giving them the visibility and tools needed to serve your customers.
First and foremost, it’s important to ensure that your team has the skills needed to address your customers’ challenges and the digital products you offer to policyholders. Typically, insurance agencies provide contextual, hands-on training to employees that drives user adoption and helps team members integrate new tools and ways of working into their existing workflows. To do this, organizations must embed guided performance support where employees experience friction, otherwise, there is a risk of long claim processing times and other errors.
When employees are empowered with frictionless workflows, customers feel that impact, from fast claims processing, transparent policy communication, clear understanding of coverage, quick payment dispersal, and more. This is the primary reason that investing in your employees is one of the key strategies for providing a great customer experience.
Work with your team to determine whether or not your suite of digital services should be custom-built or built with third-party tools like Duck Creek and Guidewire, whose functionality offers a wide variety of solutions for insurance customers.
Many insurance agencies partner with Whatfix to maximize the value of these digital investments through guided training and employee support within employee workflows.
With Whatfix Mirror, carriers can create interactive sandbox environments of insurance applications, allowing new claims agents, underwriters, support teams, and other insurance employees to engage with actual tasks and workflows in a risk-free environment, without dealing with actual customers. This hands-on, experience-based training is 70% more effective than traditional training and is proven to help retain knowledge longer so that your employees continue to provide your customers with an optimal experience over time.
Additionally, the Whatfix DAP provides embedded performance support for employees right within their workflows. Here are a few examples of employee guidance strategies that are possible with the Whatfix DAP:
- Smart Tips to alert employees of policy changes or new regulations, making sure that they’re always up-to-date
- Flows to guide and govern insurance tasks and workflows in a streamlined way for maximum overall efficiency
- Field Validations to ensure data accuracy and help your team eliminate any errors
- Task Lists to help guide employees through every step of any complex process or workflow
- Self Help to give fast access to a knowledge repository of SOPs, best practices, and other help when employees face issues or have questions
Digital Insurance Clicks Better With Whatfix
In this section, we’ll go into a bit more detail about how Whatfix for insurance applications enables carriers to support employees and customers in the flow of work, maximize usage, and create frictionless digital insurance workflows that support the quality of the customer experience.
Whatfix is the official partner of the biggest digital software providers in the insurance industry, including Duck Creek, Guidewire, Keylane, and Pega. Whatfix is also the digital adoption partner for the leading insurance providers, including Sentry, Brown & Brown, Encova, Windward Risk Managers, Zurich, and more. The absolute best in the industry power their organizations with Whatfix’s digital guidance, embedded workflow support, and application analytics to optimize EX and CX and therefore maximize ROI from digital investments through employee and customer empowerment.
Whatfix provides organizations with three core products to drive digital adoption for customers and employees alike:
- Whatfix Mirror for application simulation training, enabling your team to practice and master tasks and workflows without customer interaction and risk of error
- Whatfix DAP for in-app guidance, self-service, and embedded performance support for both customers and employees, making workflows and insurance tasks quick and intuitive
- Whatfix Product Analytics to analyze application usage, identify areas of friction, and optimize experiences for increased customer satisfaction and loyalty
With Whatfix, organizations can drive value from digital investments and better achieve business outcomes through:
- Increasing profitability by accelerating policy underwriting, claims processing, and other insurance processes so that they utilize fewer internal resources to execute
- Improving customer CSAT with better policyholder portal adoption and self-service experiences that enable customers to get things done quickly and independently
- Enabling a product-led sales approach with guided policyholder buying, onboarding, and renewal that gives customers the information that they need, decreasing confusion and friction that can interfere with optimal sales results
- Reducing user errors in claims processing, policy underwriting, payment dispersal, and more, so that your team can be efficient and serve your policyholders without mistakes that slow things down or give an inadequate experience overall
- Managing change by facilitating the transition from legacy applications to more modern systems that empower your employees and your customers
Are you ready to empower your agency with Whatfix? Schedule a demo today!
