Defining What Good Customer Experience Looks Like Is Crucial: LIMRA

Courtesy of LIMRA

We all know good customer experience when we see it. For life insurance and annuity carriers, however, it is often hard to define and measure good customer experience. A new report by LIMRA and NEOS, Next-Level Customer Experience: How Do Insurers Get There?, looks at the challenges and opportunities these carriers face and how they manage and measure their customers' experiences.

"Today's consumers are comparing the experiences they have with financial services companies with the ones they have with tech firms, like Amazon, Apple and the like," said Todd Silverhart, Ph.D., corporate vice president and director of LIMRA Insurance Research. "Before embarking on building a customer experience program, it is important that leaders identify the goals for the program and determine the necessary steps to achieve them."

The study found the three top objectives for customer experience programs at life insurance and annuity companies center on customer needs -- improving service practices to meet customer needs, aligning company goals with customer needs and increasing employee awareness of customer needs. But executives also seek to improve customer experience in an effort to produce higher revenue, improve efficiency and reduce expenses, and differentiate the company from its peers (Chart 1) (https://www.limra.com/en/newsroom/news-releases/2019/defining-what-good-customer-experience-looks-like-is-the-first-step-toward-achieving-it/).

With the goals identified, LIMRA and NEOS outlined three high-level themes on how life and annuity carriers can improve their customer experience capabilities:

Move from a reactive to a proactive approach. The study's researchers suggest that companies invest in activities and tools such as customer journey maps, self-service capabilities and voice-of-the-customer mechanisms.

In total, 82% of survey participants use reactive moments--like complaints and escalations--to obtain information about policyholders, while almost 20% are not using any external benchmarking organizations (such as LIMRA, Forrester, or J.D. Power) to compare their customer experience, tools or processes to their competitors.

Inform and determine actions based on defined metrics and tools: The study found that 79% of participants are investing in tools that capture feedback during critical moments of a customer's journey. Using customer relationship management tools, customer experience tools and marketing tools. Seventy-seven percent of participants are investing in CRM tools to better understand and serve customers, while 41% say the lack of these tools is an obstacle to an optimized customer experience. In addition, 66% of participants note that working with legacy systems is an obstacle to customer experience initiatives.

Centralize the customer experience program for greater success: More than half (56%) of participants have a centralized customer experience approach, allowing companies to optimize their program at every level of the company. The study uncovers three key features of optimized customer experience programs 1) a customer-focused mindset and company philosophy ingrained throughout every aspect of the company; 2) a program managed end-to-end across the entire organization; and 3) managed throughout the entire customer journey.

"Customer experience is a product. It is the responsibility of every employee," said Karna Trautman, head of strategy and transformation at NEOS. "As competition for consumers' mindshare and wallet increases, it is critical that life insurance and annuity companies focus on their customers' experiences at every point of the customer journey. When done right, the experience is so natural, your customers will choose to stay with you."

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About LIMRA

Serving the industry since 1916, LIMRA helps to advance the financial services industry by empowering nearly 600 financial services companies in 64 countries with knowledge, insights, connections and solutions. Visit LIMRA at www.limra.com.

About NEOS

NEOS is a recognized leader in helping global insurance and financial services organizations drive transformative change. Specializing in life, annuities, retirement, employee benefits, and wealth management, NEOS provides management consulting and delivery services that enable clients to solve strategy, distribution, operations, data and technology challenges. For more information about NEOS, visit www.neosllc.com.