If customer experience was the key to success for insurers before, the past year has taken things to a whole new level. At a time when many of us are being urged to stay at home due to a global pandemic, consumers have become ever more reliant on voice and digital channels to engage with companies and acquire their services. Technologies such as voice steering, chatbots, and all manner of self-service platforms have gone from being a luxury to an absolute necessity if companies are to retain existing customers and acquire new ones without compromising on the customer experience itself.
For companies that had already made headway with their digital transformation strategies, the storm caused by the pandemic might have been a little bit easier to weather. Businesses still leaning on outdated technologies or high street interactions, however, will have felt their grip on great customer experiences slowly begin to loosen. Unfortunately, companies operating in the insurance sector tend to fall into the latter. If they don't begin to meet customer expectations soon, they run the risk of getting left out in the cold. But therein lies an incredible opportunity for insurance providers willing to adapt and put the customer experience first.
It must be noted that with great technology comes great expectation. The moment a new technology that advances the customer experience is onboarded it becomes the benchmark of quality that all customers come to expect. We have seen it time and again in the banking and retail sectors, and it's how trends like voice banking, money management apps, and contactless phone payments caught on: They add value to the user in time savings and convenience, and, therefore, become the new standard.
This feedback loop of advancement and expectation isn't new, but the pandemic accelerated the process considerably. In a bid to retain customers, able businesses have already embraced new technologies, once again moving the bar of expectation a little bit higher for the rest of the industry. If 2020 was about customer retention in a difficult market, 2021 will be about customer acquisition in the so-called new normal, and the advancements made in technology will be here to stay.
From Low Touch to High Touch
Traditionally, insurance has been a fairly low-touch industry. Once a year, customers would check in to renew their policies and then continue to pay their monthly premiums, usually via direct debit. Or they are making last-minute arrangements for an upcoming holiday, which was more commonplace before the pandemic. While all this might sound like business as usual, it's not what the modern customer necessarily wants. According to a 2020 Insurance Survey Report titled "The Voice of the U.S. Customer," people are far more likely to choose insurers that meet their digital expectations. In fact, more than half (54 percent) said they would like their insurer to have a smartphone app and that it should be as easy to use as Facebook or Instagram.
While the insurance industry might be content to let things tick-over, consumers are signaling that they would like more interaction and engagement. In fact, more than two-thirds (64 percent) of those in surveyed say they'd be perfectly happy to share more data with insurers in exchange for lower premiums and other benefits. This is a golden opportunity for providers to join the relatively high-touch ranks of banks and online retailers and overhaul their customer experience.
Many of the more dynamic companies have expanded their traditional products beyond house, car, and travel and into life, pensions, and even business process outsourcing services. This has, in turn, expanded the quality of interaction needed with the customer and a greater need for automation, analytics, compliance monitoring, and so on. If adding the new products is to be a profitable venture, yet one in which the level of service is maintained, companies need to redirect investment into new digital solutions.
Below are just some of the trends we are likely to see emerge in line with customer expectations in 2021 and beyond:
Voice technology
According to Gartner, more than 30 percent of interactions with technology will soon be handled through conversations with smart devices and machines. Thanks to natural language processing (NLP), automated chats or virtual agents can handle around 80 percent of all customer communications. It's a natural progression from traditional interactive voice response systems that would allow users to speak a word or say an account number to be quickly routed to a particular department. This kind of voice technology is of mutual benefit when handling high call volumes, It dramatically reduces waiting times for customers and reduces running costs for businesses by making them more efficient.
Artificial intelligence
Insurers have always been data-driven, leveraging artificial intelligence to maximize profits and streamline their businesses. We're likely to see these capabilities extend to the user too, using algorithms to help with insurance plan selections, analysis, and even claims settlements. If consumers are willing to give up data for more perks, why not reward them with tailored policies curated using automated AI? Insurers get to reduce their costs and free up staff, and customers get bespoke policies with reduced premiums as a result.
Digital sales channels
While NLP and voice technology will make call handling easier, some customers that will still prefer to do their research and set up policies online. To that end, we're likely to see insurers extend their digital presence beyond basic websites and into mobile apps, smart speakers, and entire digital advertising campaigns. What if a customer could renew policies or get quotes by simply asking Alexa or Google? It's more user-friendly and less time-consuming than filling out web forms.
While the pandemic might have accelerated the adoption of some of this technology in the sector, it's far from temporary. Customers are open to insurance companies and brokers using technology, with many actively crying out for more ways to interact and engage with insurance companies. Ultimately, the effects of the pandemic will go on to mold the sales strategy for insurers and brokers who will be looking to capitalize on their short-term gains in shaping the customer experience.
Gary Williams is director of sales and consultancy at Spitch.