Are you ready for Open Insurance?

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Just as banking had to face the rise of Open Banking, so will the insurance industry, as customers look for more choice and service that suits their individual needs. The customer is in the driving seat and insurance businesses need to take note. Insurance providers with enhanced levels of customer experience (CX) are seeing double the growth of CX laggards. But there isn’t a fix-all solution for CX. BGL Insurance, with 30 years of experience under its belt, knows what it takes to stay on top of the CX game. As Chris Devey, Customer Director at BGL Insurance, explains, an innovative data-driven approach of incremental change, combined with a customer-led culture, provides businesses with the agility needed to keep up with fast-changing trends in customer expectations.

Shifting sands and the changing insurance landscape

From the pandemic and a new generation of tech-native customers, to new FCA rules on price walking, these trends and developments in the recent past have sent the insurance industry, that already needed to improve CX, into customer relations shock.

The pandemic created a surge in demand for insurance services. At the same time, businesses had to implement massive people and system changes in a short space of time, making it harder to serve customers’ needs and deliver on CX. This increased demand has not gone away and businesses will need more flexible CX strategies to manage it.

The new generation of tech-native customers are more comfortable sharing personal data and expect a personalised CX, such as driving performance apps for motor insurance, rewarding good driving behaviours. This rise of digitisation has drastically changed customer expectations and instant resolution is now the new standard.

New rules from the Financial Conduct Authority (FCA) on price walking and un-ending premium hikes on loyal policyholders, has made the industry re-focus on what customer retention really means. The loss of this revenue stream, spells new focus on attracting and retaining customers among insurance providers. The new value in extending customer relations creates increased competition, with many providers now competing more on service than price.

One time tech solutions are not going to cut it in a world of constantly increasing customer expectations. Business’ CX strategies must also evolve to maintain CX excellence.

The recent EY 2022 Global Insurance Outlook finds that insurers have got the message and know they need to improve CX, with some 62 per cent of insurance CEOs citing changing customer expectations as a top trend impacting the insurance industry.

As a consequence, the report finds that the industry’s main grounds for competition are being reoriented around three primary CX capabilities: offering seamless experiences with ready access to holistic and personalised solutions, reaching more customers and engaging them more meaningfully and acquiring, managing and using different data signals more effectively.

The old approach: We thought it was a good idea! Or how about a grand gesture?

Some businesses approach CX based on what they think customers want, rather than acting on genuine insight. This often leads to prioritisation of business outcomes over CX in process optimisation, such as switching to email communications during the pandemic, when what customers really needed was instant reassurance through online chats.

Several old CX strategies are also purely reactive. Action is not taken until after a problem has occurred, such as after a customer falls behind on a payment, or misses a deadline, allowing disruption to the journey. A data-driven approach would enable the business to be proactive, building customer approval.

Businesses also typically make ‘grand gesture’ changes to improve CX, such as loyalty programmes, or introducing new channels. These often take extensive planning and have long implementation processes, meaning they aren’t always reflective of current customer needs by the time they are introduced – sometimes more than 12 months after the original idea.

Now: Data-driven and customer-led strategies

As the dust settles on the initial CX shocks, revolutionary change may not be the best tool for tackling the nuances of complex customer expectations. Businesses should implement change based on data to ensure more customer-led processes.

The Roadmap:

The use of feedback from NPS surveys, helps to action what customers truly want – such as BGL Insurance offering virtual assistance and online chats after customers said they needed quicker responses during the pandemic. We also use panels that track pain points within the customer journey, in real-time, so organisations can upgrade CX where it is needed most and can offer proactive assistance to solve an issue before it occurs.

Implementing incremental change is the CX game changer – businesses should develop a test-and-learn approach whereby changes are regularly made, based on real-time customer data in a continual cycle of process optimisation. This approach provides businesses with the agility to react quickly to market changes and enables them to run trials side-by-side to see what works best – in a process of continuous experimentation. Businesses should develop the mindset of ‘it is better to try something that might not work, rather than not doing anything at all’.

Are you ready for Open Insurance and data ecosystems?

In today’s fast-changing digital world, businesses cannot afford to be complacent and stick to legacy CX strategies.

Open Insurance, much like the approach to Open Banking, is the future of insurance as the EY Outlook referenced earlier states: “Across all lines of business, there is increased demand for more affordable, transparent and customised insurance that better suits evolving conditions and can be easily adjusted as the needs change.”

Apps and online portals are the way forward for insurance CX, as they make information accessible on demand, anytime and anywhere. Joining together the insurance ecosystem gives providers access to existing customer data. This increases the ease of adding extra services without having the ordeal of inputting personal information again for each new service – greatly reducing customer effort. EY market experience found that successful ecosystem owners have been able to increase their products per customer from 1.5 to 2.5-3.0 within 24-36 months, confirming the pay-off is worth it.

The world and customer demands are ever evolving – insurance businesses must do the same

Insurance businesses need to continually strive to make processes easier for customers and constantly ask questions such as, “Is there a better way to do this?” and “How can we provide greater value for what the customer is paying?” Customer demands are ever changing. An incremental approach to CX provides the agility needed to react quickly to demands and market trends. CX strategies should be driven by customers – they’re the ones who buy the services, but it’s the insurance providers that must make the business decisions based on feedback, data and emerging technology developments.