Why insurers must maintain a personal touch in a technology-driven era

Insurers must adapt and evolve to meet policyholder’s changing needs and expectations. Companies are prioritizing innovation and agility so they can integrate emerging technologies such as GenAI that will enable them to improve both customer experience and operational efficiency. Many insurers are specifically looking for ways to harness the capabilities of ChatGPT.

However, the risk of losing personal connections with customers remains a concern. These technologies can expedite claims processing and underwriting, but they should complement, rather than replace, the human element in customer service.

Insurers must remember that customers value personalized interactions and human empathy, especially during distress, such as auto accidents or property losses – or even during the policy application process. Whether guiding a policyholder through a complex claim process or offering tailored insurance solutions, the human touch and clear communication are crucial in building trust and loyalty. 77% of customers will likely recommend a company to a friend if their communications exceed expectations, boosting company recognition and potentially attracting new clients. Striking the right balance between technology-driven processes and personalized service is essential for insurers to remain competitive in today's market.

These are the top reasons why insurers must prioritize personalization at every touchpoint in the policy and claims lifecycles.

Data-driven communications can translate into empathy

The connection between customer data and empathy cannot be overstated within the insurance industry, where stress and uncertainty are common denominators. Insurance is often associated with paperwork, premiums and claims – aspects that can be overwhelming and stressful for customers.

Not surprisingly, 67% of prospects and policyholders are likely to end an interaction with a company if the way they collect information is too difficult. This means potentially losing a current customer or missing an opportunity to gain a new customer. Streamlined digital interactions are now table stakes, and insurers should prioritize using data they already have to avoid asking for information that has been already shared.

Customer data also plays a pivotal role by offering insights into individual needs, preferences and behaviors. By using this data effectively, insurers can optimize processes, personalize interactions and ultimately enhance customer experience. With access to pertinent customer information, insurers can proactively address concerns and provide tailored solutions, ultimately building trust and long-lasting relationships with policyholders.

Each generation values personalized experiences but through different channels

In addition to having smooth data collection processes, insurers need to recognize different generations' preferences.

While older generations often prefer phone conversations, younger demographics lean toward digital interactions – 52% of millennials saying they feel anxious taking a phone call versus only 23% of boomers. It's essential to recognize that these preferences are evolving, with even consumers who are not digital natives becoming more tech-savvy. Insurers can build relationships and reduce frustration by providing various communication options and empowering customers to select their preferred method. This flexibility ensures customers feel in control of their interactions and avoids the impersonal nature of a one-size-fits-all approach.

How insurers can make customers feel heard

Allowing customers to choose their preferred communication channel is vital for maintaining the human touch in interactions. It respects individual preferences and fosters a more personalized experience, making clients feel valued and understood.

For example, 71% of consumers ages 55 and up said they would like the internet chat/video insurance claim process to replace the traditional in-office claim process. Live chat allows customers to get quick answers to their questions and resolve issues in the moment, replicating the immediacy of face-to-face conversations. This method can be particularly effective for addressing urgent inquiries or providing support during complex processes, creating a more dynamic and engaging experience.

By offering various options, insurers demonstrate flexibility and attentiveness, which can enhance the personal connection between the customer and the company. This choice caters to diverse communication styles and helps build trust and satisfaction, as customers can engage in a way that is most convenient and comfortable for them.

Insurers are undergoing a seismic shift

Consumers now expect seamless, personalized experiences, like those of other industries, such as online retailers and streaming services. To compete, insurers must leverage technology while preserving human connections. By empowering customer service representatives, agents and adjusters with the right tools and providing customers with flexible communication options, insurers can foster stronger relationships that will help them to write more new business and increase customer retention.

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Eileen Potter is vice president of marketing for insurance at Smart Communications. Contact her at [email protected].