The human touch

Personal lines insurance is a volatile part of the short-term insurance sector where customers can switch service providers easily. The ease of switching, from one insurer to the next, is usually based on price or service experience at claims stage or any other intervention.

With more insurers joining the industry to compete for market share, the battle for the heart of the consumer has become more real and intense. A wider range of products, innovative technology and tools, not to mention, price ranges has made the landscape wider and more competitive.
So, how does an insurer keep existing customers interested and loyal when a competitor’s offering entices them to switch?

Segmenting life stages

Firstly, it is important for insurers to understand their customers’ life stages. Once an insurer understands what life stage customers are in with them, they are able to segment their customers properly.

This then assists insurers to engage and communicate information in a way that is relevant to where customers are with them. For example, a first time buyer might be more likely to switch at the first sight of a lower price, therefore there may be a need to highlight other value added benefits that make the insurer the best choice, above the premium paid.

This brings into focus the value of having the correct and relevant customer data to help with customer segmentation. The insurance industry is one where both the intermediary and direct models are equally at play, and customer data may be owned by an intermediary and not the insurer directly; therefore customer segmentation can be a challenge.

The human element

While technology certainly makes customer engagement easier, insurers should not underestimate the power of the personal touch.

An insurer with a multi-channel approach to servicing customers by combining great online access with continued direct personal contact, is able to keep customers interested and make them feel that they matter to them as their insurer. Keeping the intermediary abreast of updates and latest news is also important as they become the face of the insurer in interacting with the intermediated customer.

Enhanced experiences

A good claims experience is a key factor for customer loyalty because it is the moment of truth for the customer. When all is said and done, the customer takes up insurance with the expectation that when he or she needs to claim, the insurer will not refuse to pay valid claims.

Earlier this year, Fitch ratings agency rated Mutual & Federal ‘AAA’ for its claims paying ability and its overall solvency and liquidity strength. This provides assurance to customers that Mutual & Federal pay all valid claims.

Claims experience is key

A bad claims experience can persuade even those loyal customers who are least likely to switch for price to start considering competitor products. This would be a huge loss considering that these customers are the customer segment that would ordinarily recommend the insurer to their friends and family.

This experience points to the issue of positive versus negative Word Of Mouth (WOM). A positive experience leads to the likelihood of recommending the insurer, as mentioned above, to others. A negative experience leads to the likelihood of not recommending the insurer and considering competitor options. Customers want a seamless claims experience.

Mutual & Federalunderstands that effective engagement with customers cannot be achieved without walking in the shoes of customers. While a good claims experience is always key for customers, a good engagement model at every life stage assures the customer that they will not be disappointed in the end when they submit a valid claim.

The emphasis is on the importance of walking the journey with the customers and engaging them from their viewpoint.