The State of Customer Experience in Insurance in 2016
Three trends are shaping insurance and changing business models. Here's how to use CX to remain competitive.
The consequences for organisations on the wrong end of the customer experience scale have long been obvious, and this trend continues in 2016. In fact the negative impact of a single bad customer experience is now greater than ever given the sheer reach and amplification that social media provides. This, and countless other examples, are the reason why the industry have stepped up its efforts to compete on CX.
But great customer experience isn’t just about avoiding PR disasters, it has become the most important differentiating factor between competing brands. It takes considerable investment and innovation to get right and the task the insurance industry has on its hands is particularly challenging especially given the fact that the industry hasn’t changed that much since the 1700’s - business models are still overwhelmingly reliant on sharing risk and calculating premiums.
The key is understanding what customers value, and in the context of insurance, customers are rapidly demanding more from their suppliers. They have more information about the market than ever before (just look at the amount of comparison websites). Technology is the key driver behind this, pushing better interactions and products across all aspects of customers lives. Insurers are only just waking up to the realisation that, just like every other industry, they risk being displaced by technology.
As a result, investments in ‘Insurtech’ startups and technology has been astronomical over the last 18 months as objectives shift toward customer centricity. Our research at Chattermill pulls in various insights from around the industry and outlines the exact scope of this change, as well as the shift in the industry and changing customer demands: