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How insurtech disruptors are teaching the industry a valuable lesson in customer experience

Insurtech firms are shaking up the industry, introducing apps and AI to offer simple, tailored products and experiences. What really sets this new wave of insurance providers apart is their laser focus on a highly personalised customer experience (CX).

By Michael Schweidler, Senior Marketing Manager, EMEA

Published November 25, 2021
Last updated March 17, 2022

There’s nothing like living through a global pandemic to put insurance firmly front of mind. Capgemini’s World InsurTech Report 2021 revealed that the pandemic sparked a 7% increase in customers’ intention to buy insurance. That should be good news for insurance companies, but with smart, digital insurtech competitors snapping at their heels, growing demand doesn’t necessarily translate to rising customer acquisition.

Insurance isn’t a consumer’s most exciting purchase and in the past people just bought what was on offer. What’s more, the process of purchasing and using insurance products is often time-consuming and tedious – for both buyers and agents. Now the new kids on the block are shaking up the industry, introducing apps and AI to offer simple, tailored products and experiences. These new insurtech players are digital-first. They have therefore been quick to leverage a mix of technologies, including data analytics, AI, Internet of Things (IoT) and smart devices, to revamp how they work to support the changing needs of modern consumers.

Insurance for the modern world

Companies like these are offering customers the convenience of managing their insurance policies the way they want to, and their products and policies align perfectly with modern lifestyles and needs. Unlike traditional insurers, insurtech companies are also mining their data efficiently to develop new and streamlined offerings.

But what really sets this new wave of insurance providers apart is their laser focus on a highly personalised customer experience (CX). During the pandemic, they were able to move fast to work remotely and step in to meet the demand driven by COVID-19. Now, customers left frustrated by the lack of convenience, counsel and flexible contact from more traditional insurers during the crisis are ready for a new approach. In fact, Capgemini found that over half of customers surveyed for its report would be happy to make the switch to an insurtech provider.

Giving customer service top billing

So how can incumbent insurers compete effectively with the challenger brands now entering the market? The simple answer is by putting CX at the heart of their growth strategy. Instead of seeing investment in this area as a cost to the business, modernising CX should be viewed as the key to unlocking future potential. This trend is already underway, with 70% of insurance CEOs saying they plan to invest in customer experience in the next 12 months. But how can these resources be put to best use?

  • Flexible, omnichannel interaction.
    Customers expect to be able to seamlessly pick up conversations across multiple channels. Investment in data collection and sharing, AI and automation, will facilitate this approach and it delivers big benefits, including efficient customer service, unified messaging and improved brand awareness.
  • Keep it simple.
    Using AI and bots can speed up and simplify processes. But it’s important to do the leg work when it comes to policies and other communications, to ensure they are clear and jargon-free, and offer an intuitive user experience.
  • The personal touch.
    Personalised interaction around a purchase is the best way to win customers and build loyalty. Gathering as much data as possible about customers enables insurers to tailor policies and experiences to reflect customer needs. And getting to know customers pays off. McKinsey has found that in some industries, personalised marketing has slashed acquisition costs by up to 50%, while boosting revenue and customer satisfaction by as much as 5-10%.
  • Hybrid experiences.
    One size doesn’t fit all when it comes to CX. AI has huge potential when it comes to number crunching and automated responses, data is critical to understand customer behaviour and trends, but the personal touch is still valuable to offer empathy and emotional support. A recent report from Deloitte supports this, with more than half of those surveyed (57%) saying the ability to speak to knowledgeable and friendly staff was effective in customer retention. This is why a mix of different touchpoints is the best way to ensure customers are supported throughout their journey.
  • Stay agile.
    Today’s world is fast paced. Customers are used to instant answers and want a quick fix to problems. Insurance companies must therefore offer swift response and resolution times and actively address customer feedback.
  • Be proactive.
    Proactive contact at key moments throughout the year – rather than just at policy renewal times – is an opportunity to introduce services and nurture customer relationships.
  • Adopt intelligent workflows.
    Intelligent automation, AI and machine learning have the potential to transform insurance processes into streamlined and efficient workflows. For example, currently a traffic accident claim could involve multiple processes combining to handle the incident. If that claim could be automated it would save time, eliminate human error and deliver a faster resolution to the customer.
  • Use data to create products.
    AI can be used to analyse data to develop new products and policies, accurately tailored to customer needs. This has the potential to help insurers grow business with both existing and new customers.

Transcending the transactional

“Intelligence is based on how efficient a species became at doing the things they need to survive.” This is a quote from the father of evolution, Charles Darwin. It has been modified into the simpler saying – you must adapt to survive – and never has this been truer than in insurance today. It’s those players that embrace the potential of technology to transform them into trusted advisors who will drive customer loyalty and purchasing decisions going forward.

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