Carriers Must Support A Holistic Customer Experience
By Olaf Tennhardt
The pressure on insurance carriers is increasing as new competitors are entering the market, profit margins are shrinking and customer expectations are on the rise. This pressure is resulting in a fundamental change in the traditional insurance business models. New technology is having a profound effect on the ways that insurance companies communicate with customers, the amount and types of information available to marketers, and the buying behaviors of customers. Customers are demanding personalized products and services, in addition to access across all digital channels. In order to exceed their expectations, we must understand some of the critical developments in the insurance customer environment.
1. Customers are better informed.
No matter what a consumer is looking for today, it is accessible at any time and anywhere. It has become standard to be online 24/7, and quotes are issued on demand. Consumers are in constant quest of a better deal. The process to request a quote or conclude a contract has become fast and easy, and insurance customers are not particularly loyal. Therefore, a high-quality online presence is a must for each insurer in order to be able to meet their clients’ information requirements.
2. Insurance customers expect a personalized experience.
Insurance customers expect carriers to recognize them at all times, even across media and channels. They want customized communication and offers tailored to their life stage and behaviors. In order to meet the customers’ expectations, insurance companies need to collect and process internal customer relationship marketing (CRM) data as well as third-party and digital data about their customers and prospects. These heterogeneous data sources are connected using big data technology, while predictive analytics are used to enable not only household-specific, but consumer-specific marketing.
3. Insurance customers are increasingly active in social media.
Network or referral marketing has a whole new meaning. Consumers use social networks to learn from others about their experiences with products or services – and also to share their own experiences. Insurance providers understand the power of word-of-mouth and most already have established a presence in social media. But they are amping up their efforts with individual targeting via social networks. MetLife, for example, has realized a 2.5-times higher conversion rate using predictive analytics for personalized targeting through a Facebook Custom Audiences campaign.
4. Consumers switch freely between devices and channels.
Insurance customers expect their carriers to be at least as active in digital media as they are. Consumers are online constantly and receive new content in high frequencies. The challenge is to identify what information is relevant to them and to proactively provide that information to the client’s preferred device at the right time. This process also is supported through predictive analytics.
5. Insurance customers are willing to disclose personal information.
Customers are willing to disclose personal information, if they receive added value in return (e.g., customized products, discounts, quotes, or additional services). The large amounts of personal data, overlaid with the consumers’ digital footprint, enables customized and targeted communication strategies. Personalized, relevant products with transparent and convenient pricing must be offered in return for disclosing personal information.
Insurers must learn how to better understand – and act upon – customer expectations and needs. Some organizations still have an internal silo mentality and are lacking a holistic view of their customers. This is reflected in cases where different departments and teams own some of the required capabilities (e.g. analytics, digital, CRM) and those teams are not communicating with each other or are working independent from each other. But this is starting to change as carriers begin to think about the best way for their organizations to support a holistic customer communication and marketing process.
Olaf Tennhardt is senior vice president of technology services with Merkle. Olaf may be contacted at [email protected].
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