What customers want… are we getting this right?

Ricardo Coetzee

According to Bain’s 2018 Customer Behaviour and Loyalty in Insurance Report, which surveyed more than 174 000 retail insurance consumers in 18 countries, policyholders value quality and ease of use above all.

One clear finding, according to Christelle Colman, Insurance Expert at Old Mutual Insure, is that there are insurers that do these things well to earn the loyalty of their customers, but most companies consistently do not deliver the value that customers, especially Millennials, want. 

Customers don’t have complicated needs

“According to the latest South African Customer Satisfaction Index (SAcsi), conducted by Consulta on short term insurers, customer satisfaction in South Africa is on a steady decline. This, according to the research, comes after a significant rise in niche market insurers gaining market traction and providing consumers with better service which is specific to their needs,” added Colman.

“Customer use of digital channels, especially mobile, is rising rapidly. However, insurers are generally struggling to create delightful digital experiences and are facing new competition and entrants into the traditional market space in South Africa, where challenges with legacy systems and processes are still at the order of the day,” emphasised Colman.

“What the Bain’s survey found is that those insurers that excel globally, emphasize flawless execution in their core business, offer an ecosystem of services that go beyond insurance and make customer-centric innovation a top priority,” continued Colman.

“Insurance customers don’t have complicated needs; we know this as we are all insurance policyholders in our own right. We want to be able to choose from a good selection of policies at reasonable prices. We want clear, transparent information, and we want smooth, hassle-free interactions. When we submit a claim after an accident, theft or injury—often a time of great stress and trauma, we expect our insurers to help reduce our stress and anxiety, not increase it. Yet it is clear from the SACSI feedback, as well as the report produced each year by the Ombudsman of Short Term Insurance, that as insurers, we are not always getting this right,” said Colman.

A change in behaviour

“What we do know is that in the South African market, a few of the large and established insurers are getting many of these customer requirements right,” continued Colman.

“However, most insurers still do not consistently deliver the value their customers are seeking. They cannot differentiate themselves and often end up competing on price. These products are often complicated to understand, with restrictive fine print that only becomes apparent at the time of a loss. As a result, we are seeing that Insurtechs and other newcomers to the industry are gaining traction in the marketplace. We are also seeing specialty underwriter and niche players gaining market share, purely because they have a focus on a certain market segment and better understanding of their customer needs in that specific segment,” she added.

It is clear, Colman said, that the South African insurance industry is ripe for the kind of disruption that has severely affected many other industries. “All across the commercial landscape, digital innovators are upending markets with products and services that they sell directly to consumers, bypassing established companies by creating more value. This digital revolution has been slow to hit insurance, but there is no doubt that it is coming. We are seeing a change in the behaviour of our traditional customer, with digitally savvy Millennials who are very open to switching to new Insuretech entrants, and who possibly do not carry the traditional loyalty to trusted insurance brands in the SA market.

From a business perspective

“At the end of 2018, Insight Survey, Accenture, KPMG and PwC presented survey reports that all indicated, in some way or another, that technology and data is radically changing the behaviour and expectations of consumers and it is also a major driver for growth within the short term insurance industry,” said Ricardo Coetzee, Head of Auto & General. 

“From a business perspective, it is vital that we as insurers constantly test our assumptions, upgrade our strategic capability, and develop a clear understanding of what creates value for our customers. It is imperative that we engage with and listen to our customers, since an engaged customer pays more attention, and we are more likely to meet their expectations if we are able to engage in constructive two-way communication. This means that we have to test the temperature around our deliverables,” continued Coetzee. 

“Customer centricity is the key to answering today’s constant consumer challenges and has become a bit of a buzz word. The modern consumer is savvy, informed and demanding when it comes to price and service. Everyone wants simple solutions, processes and seamless experiences. We need to adhere to these needs and to look at being value driven rather than sales driven, as modern-day business models prescribe,” added Coetzee. 

“The answer, also recommended in the 2018 KPMG survey, lies in creating a connected business, aligning our entire organization, across the front and back offices, and with our distribution partners,” said Coetzee. 

“While the digitisation of processes and the intelligent use of data are important, we believe that growth will ultimately be dependent on our flexibility to adapt to the changing market environment and the provision of a reliable insurance service to our policyholders. In the end, everyone simply wants to purchase a reliable product that you know will cover your losses at claim stage. As an industry, we must re-imagine our solutions around the customer, especially in the light of the increased focus by the regulatory authorities on the fair treatment of customers,” emphasised Coetzee. 

The value of the broker

“This is where the value of the broker is demonstrated once again. Brokers have the unique opportunity to create value just by being there for their customers. Stepping in at the time of trauma to ensure a human voice, providing a level of care and concern not yet possible with artificial intelligence and a wide variety of other technologies,” said Colman.

“The more meaningful interactions policyholders have with their brokers; the more loyal policyholders are likely to be. It is therefore of absolute importance that brokers create increased opportunities to interact with their customers; they must engage with their customers more often and, in the process, build sustained relationships with them. Identifying what those moments of truth are and then delivering on client expectations is what will ensure the sustainability and future success of the insurance broker in the South African market,” concluded Colman.

Writer’s thoughts:
As mentioned above, policyholders value quality and ease of use above all. As an industry, we must re-imagine our solutions around the customer, especially in the light of the increased focus by the regulatory authorities on the fair treatment of customers. Do you agree? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts myra@fanews.co.za.

Comment on this Post

Name*

Email Address*

Comment*

 

Submit Comment