Management System | Read Time: 5 Minutes

How to Win Insurance Business in the Age of the Customer

November 22, 2017

By: Applied Communications

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Technology innovations have empowered customers in new and disruptive ways. Customers have shifted from being passive sideliners to more active players who control how they engage with insurance companies. In speaking with Forrester Research, it’s apparent how dedicated they are to helping clients develop strategies that drive growth during this business shift known as the Age of the Customer.

Consumers today have so many options with which to fulfill their needs, insurers and their agencies must be agile to deliver service via the channel that customers expect. In today’s competitive marketplace, it’s critical for insurers and agencies to identify the context of interactions and build upon them to create new forms of useful, continuous engagement. In this Age of the Customer, the only sustainable competitive advantage is knowledge of and engagement with customers.

Easy to reach, hard to engage
Research shows that half of U.S. online adults are always addressable, meaning that they personally use at least three Internet-connected devices and access the Web multiple times per day from multiple physical locations. This is seemingly good news because businesses now have more opportunities than ever before to meaningfully engage with their customers.

So what’s the bad news? Just because you can now easily reach customers, doesn’t mean they are fully engaging and connecting with you. In fact, Forrester’s recent survey reveals that only 38% of insurance customers disagree with the statement, “All insurance companies are basically the same.”  With a majority of customers agreeing or being neutral to this statement, it’s apparent that customers have a hard time differentiating one company from the next.

Customers are demanding more
So what’s causing this change in customer behaviors?  Forrester’s data analysis reveals five key shifts in consumer behaviors, attitudes, and expectations that fuel customer empowerment:

  • Willingness to experiment
  • Device usage
  • Digital/physical integration
  • Information savviness
  • Self-efficacy

As consumers continue to evolve along these dimensions, agencies must think differently about how to build and sustain customer relationships – more than simply analyzing historical behavior, demographics and lifestyles.

To fully understand and engage with customers, agencies and insurers must now consider customer’s expectations, emotional motivations and contextual decisions. Agencies and insurers who measure how their customers evolve along these critical dimensions will understand and anticipate customer demands for new services and experiences.

Customer lifecycle
Agencies must shift their focus from a product and channel centric approach to a customer-centric approach, using the customer lifecycle. The customer lifecycle is simply the enterprise’s view of the phases a customer passes through in the course of an ongoing relationship with a company.

Forrester recently surveyed 684 Americans who recently purchased car insurance to see how their experience was at they went through the six phases of the customer life cycle. Here are a few of the key results that illustrate the importance of agencies putting the customer at the heart of everything they do to create contextual, useful engagement.

Discover
Customers spend time trying to find the right agent or insurer and learning about different coverage options. Results show that 54% opted to work with an agent for their auto insurance coverage. Even in today’s digital world, this reveals that customers still value having a relationship with their insurance agent. Agencies should leverage technology to enhance their value and better serve their customers, not replace their relationships.  

Explore
The abundance of information available makes it hard for customers to compare coverage and differentiate insurers. In fact, 88% of consumers said they received between 1-5 quotes. It’s not enough to simply provide information. To stand out from the competition, agencies and insurers must target the right customers, with the right message, at the right time. 

Buy
When a customer chooses the policy that best meets their needs, they go through the buying process. Here, customers are looking to connect with the right agent. Of the consumers who bought their auto insurance policy from an agent, 45% said they bought from an agent because they made the process easy.

Use
The next phase is how customers use their policy, such as, where to register for digital services, how to file and track claims, and where to go to view and change coverage. Results show that 14% of consumers received a welcome or thank you letter from their insurer. Insurers and agencies need to continue engaging with their customers, even after their purchase, if they want to retain them.

Ask
When a change happens in a customer’s life that requires a change to their policy, they entered into the ask phase. Forrester’s survey shows that 51% of consumers interacted by phone with their agent after the purchase of the policy. Customers demand more insight on how they can interact, and agencies and insurers need to provide the omnichannel service approach so customers can self-serve at a time of need.

Engage
The last phase in the customer lifecycle drives customer satisfaction, retention and loyalty. In a digital world, customers are looking for new ways to engage with their agent. In fact, 6% of consumers viewed an agency’s social media content and 9% had an online chat with their agency. Agencies need to provide omnichannel engagement options.

Don’t get left behind
Technology is not the real disrupter in today’s marketplace, not being customer-centric is. Success in the age of the customer requires you to go beyond customer centricity and become customer-obsessed. Agencies that are not already prioritizing the experience of their customers – and aligning business technology resources accordingly – risk being left behind in the Age of the Customer.

To learn more on becoming a customer-obsessed agency, watch the on-demand webinar “The Customer Lifecycle: A Blueprint for Customer-Obsessed Businesses” featuring Forrester principal analyst Ellen Carney.


Applied Communications

For more than 35 years, Applied Systems has led an industry we helped to create with a mission to continuously improve the business of insurance. Insurance agencies and brokerages have faced new challenges and demands on their businesses over time, and we have been there to guide them. Since 1983, Applied has been at the forefront of insurance technology, leading the way through innovation. As the insurance industry becomes increasingly global, we are delivering new technology and expanded multinational capabilities for this changing marketplace.