Time for insurers to refresh their customer engagement strategies
With the onset and rapid advancement of digital technology, industries across the board are faced with the task of having to refresh their customer engagement strategies to remain relevant.
“The growth of digital technology over the past decade is phenomenal. The continuing and rapid advancement of mobile devices means that more and more consumers now have access to online and social media platforms. As a result the very nature of how businesses interact with their customers is changing rapidly so they need to ensure they are aware of what their customers are currently demanding and expecting. The insurance industry is no different,” says Rhys Collins, Head of African Operations for SSP.
Collins refers to the recent Global Consumer Insurance Survey 2012 released by Ernst & Young which investigates customer attitudes and behaviours in the life and non-life insurance sectors across seven regions around the world. “Although globally the findings of the survey are understandably diverse due to the vastly differing economic, demographic, competitive and regulatory environments, a number of key themes emerged which are relevant to South Africa and provide interesting and valuable insights into what customers in the insurance sector are expecting and favouring,” comments Collins.
Collins explains that the survey suggests there are three strong determinants for successful customer engagement in the insurance sector and it is these that he says insurance companies should be incorporating into their customer engagement strategies.
“Not surprisingly the survey results indicate that mobile technology and online applications are re-shaping the way that consumers engage with insurers,” he says. “This is particularly relevant to the local market and Africa in general where the growth of connectivity over the last 10 years has been almost on par with that of Europe and the Middle East. Together with the ongoing increase in bandwidth, decrease in price and an increase in the user base, by 2015 the current penetration of mobile phone users is predicted to grow by a massive 66% from 506 million to 842 million, while the current 12 million mobile broadband users will soar to 265 million.” 1
Collins says that online applications and the amount of information consumers now have access to, means that it is easier to compare pricing and offerings within industry sectors. “Some companies are already compiling customer databases from individual customers’ online activities allowing them to recognise each customer as a unique individual and offer products and service suggestions based on customers’ past behaviour and known preferences,” he adds.
While it is vital that insurance companies have platforms in place to engage with their customers in the digital realm, it is equally important that they also maintain conventional channels. “The survey suggests that most customers seem to want both online and offline access depending on their personal preferences. Whether it be conducting research online and then purchasing over the phone or via agents or brokers, or being able to register and monitor a claim online, insurers need to be able to deliver convenience and value by integrating online and offline channels seamlessly to meet changing customer needs over the entire product life cycle,” he comments.
Another common theme emerging from the survey is that customers want to be able to buy with confidence. Key to this is insurance providers building and maintaining long-term relationships with their customers. “Customers prefer dealing with people that are familiar with their individual backgrounds and also feel reassured that they are buying products relevant to their specific needs,” adds Collins.
Closely linked to the notion of buying with confidence is the global agreement among consumers that insurance products and sales processes need to be simple and transparent, allowing them to fully understand what they are buying. “Globally consumers expect information to be accessible online and applications to be user-friendly; here again well thought through IT solutions can go a long way towards promoting seamless uncomplicated transactions,” he adds.
These changes will put additional pressure on insurers to change their processes and products and evolve their distribution channels in order to remain competitive. However, it is important that the IT changes they make are not just short term fixes otherwise they will simply be replacing the legacy problems of old with new ones that will need undoing at a later date.
In the UK, the evolution of quote and buy websites is a perfect example. Many insurers have invested in standalone quote and buy systems. While this will help in the short term, it simply creates a new silo of customer data, cut off from the rest of their business that hampers customer service and will become another legacy issue in the years ahead.
By adopting a service-orientated architecture (SOA) approach insurers can adapt to these changes, creating an IT framework that allows them to store all of their data in a central place whilst modernising their existing systems and improving their performance.
“The time to act is now if they wish to fully engage with their customers in the ever-progressive digital realm. As the market continues to evolve, insurers will have to continue to adapt the way they do business and the way they service their policyholders. It is essential that their IT platforms allow customers to engage via their preferred channels in a seamless user-friendly manner. While most insurers will want to react to these changes quickly to maintain or improve their market position, hopefully they will take a longer-term strategic view of how IT can best meet these changing demands,” concludes Collins.
References
