It sure is a challenging time for the insurance industry.
The market is soft, demands are high, regulations are intense, and growth is slow. And with disruptive new players luring policyholders away with promises of rock-bottom premiums, agencies have to work harder than ever to gain and retain customers.
When more than half of customers would rather go to the dentist than deal with their insurance companies, competing in this landscape becomes downright painful.
However, many agencies are discovering new and inventive ways to impress customers. In fact, one of the most basic strategies can make the biggest difference: learning to leverage technology.
In a world where people have come to loathe the process of researching, buying, and paying for insurance, there are still plenty of options for surprising and delighting customers.
To see what I mean, let’s take a quick look at three common challenges facing the industry today.
Insurance industry challenge #1: Customer churn
If there’s one challenge all insurance agencies face, it’s customer churn. Today’s empowered customers can easily switch carriers, and do so with remarkable frequency—just maybe not for the reasons you think.
A recent survey of insurance industry customers found it’s not just aggressive insurance quote processes that lure policyholders away. In many cases, people are simply looking for a better experience.
Customers often cancel contracts with companies because they feel the businesses are wasting their time. More than half leave because they had to repeat information unnecessarily. Three in 10 tire of waiting for their issues to be resolved, and 14% find self-service options to be inferior.
Here’s the kicker: In most instances, these issues built up over time. Close to 60% of customers left because of an ongoing negative experience. That means each time your company fails to accurately answer a question or quickly address an issue, the likelihood that customers will take their business elsewhere increases.
And by the time someone finally decides to leave, it’s too late to change their minds. While more than half of insurance companies try to win back customers after they cancel contracts, usually by offering a discount or an apology, most are unsuccessful.
The reason? Many insurance companies are failing to give customers what they really want. Among those who churned following a series of negative experiences, 38% would have stayed if they believed the insurer’s service would improve in the future. That finding is an important one, especially when you consider the fact that retaining an existing customer costs 25 times less than acquiring a new one.
Improving the customer experience is one of the most important issues for insurance agencies to address.
With the right technology in place, providing a better experience for customers becomes much easier. Something as simple as automating manual workflows or answering common questions with email campaigns can go a long way in lowering response times and improving the flow of customer support.
Insurance industry challenge #2: Putting data to good use
As we’ve mentioned before, it’s not uncommon for companies to be overloaded with insurance customer data. As a result, most struggle to extract the information they need to retain customers in today’s highly competitive environment.
Insurance agencies that do find ways to put their customer data to good use have the upper hand. A recent insurance industry report from research firm PwC names data analysis as a key component in improving the customer experience.
Once you’ve created a system to extract the right insights, it becomes exponentially easier to “quantify the pain points that cause a customer to leave.”
According to PwC, insurance companies that have learned to maximize their data have lower acquisition costs and higher levels of customer satisfaction.
Here again, having the right technology is critical. First, you need to have a tool in place to help capture the right information. No more, no less. Then, once you have a strong flow of essential data points, you can start tracking essential metrics to help agents determine where, when, and how to improve the customer experience.
Insurance industry challenge #3: Creating a competitive insurance quote process
While outstanding service and customer data are essential, it’s equally important to focus on fine-tuning the system you use for quoting policies.
Whether you’re working to win over new customers or want to introduce existing policyholders to additional options, the process should be smooth and seamless. After all, there’s always the chance that a competitor will quote them faster and more efficiently. And coming in last will send a strong signal to prospects that slow response times are the norm—a big turnoff that no insurance industry customer wants to contend with.
To compete in the current landscape, you need an insurance quote process that’s quick and painless.
For this reason, many companies are choosing to automate quote generation. Typically, that means setting up an online form builder and document generation tool: When a prospect or customer fills out an online form, the data is instantly sent into the document generator. The information is used to populate and personalize the template, automatically creating a new custom quote within minutes.
It may sound like an overly simple solution, but that kind of speed can go a long way in gaining and retaining loyal clients.
These challenges are far from the only ones faced by insurance companies, but they’re three of the easiest to address with technology. Automating workflows, simplifying data capture, and, most importantly, fine-tuning the quote process can all have a big impact on the bottom line.