Want more loyal customers? Focus on these 4 differentiators

A long-time skier sits in the lodge, contemplating what is about to be her first-ever day on a snowboard. Having heard the stories about all the injuries to which beginning snowboarders are prone, and knowing no fresh snow has fallen lately to soften the dozens of falls she’s likely to take, she wonders if it would be wise to invest in some extra insurance coverage, just in case.

From her phone, she accesses the online portal for the insurer that underwrites most of her coverages. Then, after learning via the portal’s chat feature that she can indeed buy personal liability coverage for that day and that specific activity, she completes and submits a quick digital application and a payment, which are approved within moments. Now she’s ready to hit the slopes, confident that if her day is marred by injury, at least she’ll be covered for the financial damage.

Hypothetical though it is, this kind of lifestyle-oriented insurance product, and the ease with which our skier-turned-snowboarder purchased it, represent the simplified yet elevated customer experience that can set an insurer apart from the competition in the eyes of consumers. A recent analysis by Accenture, for example, found that insurers can increase revenue by up to 15% and reduce operating expenses by 10-40% by reinventing product offerings and improving the customer journey.

Companies that focus on the following four areas of that journey will put themselves in a strong position to capture these benefits:

1. Provide a frictionless experience across channels. If retailers can provide a customer experience that enables shoppers to engage with them on their terms and frees them to stop and restart their journeys as the retailer follows them each step of the way, why can’t insurers do likewise? Customers expect a seamless, multichannel journey, whether they’re buying a couch or an insurance policy. They lack patience for backtracking, redundancy and blind spots.

For insurers to capture and build loyalty with customers, it’s critical that they develop the ability to create personalized policies and quotes with straight-through processing, along with robust self-service options and features such as voice assistants, chatbots, video chat and co-browsing that enhance the experience. As demand for personalized insurance grows, capabilities like these are not a differentiator but a must-have. Let customers define their journeys in a way that suits them best.

Just as important as these customer-facing capabilities are the back-office tools that enable an insurer to monitor, analyze and manage the customer experience they’re actually delivering. To refine, improve and address issues with their CX, it’s important for insurers to establish “listening posts” to collect ongoing feedback and insight about the quality of their customer interactions at various touchpoints, and to identify the most important moments in the customer journey. By synthesizing experience data with operational data, they also can better understand the impact of individual CX adjustments.

2. Prioritize lifestyle-based offerings. In a 2021 Accenture survey, 67% of millennials and members of Generation Z said they would appreciate advice from their insurance provider on how to shop and travel more sustainably. Companies such as Discovery Insurance already are catering to this apparently growing consumer appetite for insurance products that are enriched by lifestyle-oriented support and features. Discovery provides incentives and perks for policyholders who exhibit better health habits, driving habits, etc. It’s a win-win for the company and the consumer, as Discovery reports that its behavior-based Vitality Drive automotive insurance offering has produced a sizable reduction incustomer accident frequency, along with claims savings, improved loss ratios and a big increase in good drivers on the company’s books, all while paying out the equivalent of more than $70 million in incentives to customers.

When insurers begin to view their customers not merely as members of a risk pool but as partners with whom to share risk and rewards within the construct of a shared-value business model, the possibilities for developing new insurance revenue streams and business models are seemingly endless. So are the opportunities for engaging and building loyalty with customers.

3. Bundle value-added services. What if, during and after her brief interaction on the insurance portal, our first-time snowboarder gets notifications for a deal on snowboarding gear, or a discount offer to fill her car’s tank at the local gas station before the long drive home? Being able to provide consumers with additional value beyond just an insurance product is a must in a world where consumer choice is increasingly driven by outcomes and value-added services, not just a product itself.

Recognizing that, insurers have begun to build partnership-based business ecosystems so they can bundle insurance products with services that enrich consumer outcomes.  Participants in Discovery’s Vitality programs for automotive and health, for example, get deals from health care service providers, fitness gear retailers and other lifestyle-oriented companies that are part of the Discovery partnership community.

4. Make the claims process more palatable. For insurers, the claims process is the single most important determinant of overall customer satisfaction. If our beginner snowboarder does indeed sustain an injury that leads to a claim, her experience during the claims process could well determine whether she becomes a raving fan and repeat buyer, or a vocal critic and former customer. Fast, largely automated processing, approval and fulfillment are vital to shaping a customer-friendly claims process.

Whatever the product or service they’re considering, consumers have become accustomed to abundant choice, simple execution, rapid fulfillment and being rewarded for their loyalty with outcomes that add value. Insurers that can deliver in each of these areas not only stand to attract more business, they’ll be better positioned to withstand competition from disruptors like Amazon, which, in case you haven’t noticed, is training its sights on the insurance market.

Toni Tomic is global head of insurance business solutions at SAP. He may be contacted at [email protected].

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