"I want it all, and I want it now." These iconic lyrics by the late Freddie Mercury of Queen from the 1988 hit song still resonate today, reflecting the urgency of contemporary customer expectations. In the world of insurance, customer experience has become a dominant force, shaping the industry's landscape. Antonia Oakes, Executive of Customer Experience at Old Mutual Insure, highlighted the significance of customer experience and its impact on the short-term insurance sector during CN&CO's insurance webinar, InsureTalk35.
Understanding the Customer Experience
Before diving into the implications for the insurance industry, it's essential to differentiate between customer experience (CX) and customer service. Customer experience encompasses the overall perception customers have of an organisation, formed through interactions across various touchpoints, people, and technology over time. It encompasses cognitive, affective, emotional, social, and physical responses to the brand. On the other hand, customer service is a more operational aspect, focused on addressing customer requests, resolving issues, and answering questions.
In a rapidly evolving and highly competitive industry, Oakes emphasised that insurance carriers must prioritise customer experience as a core element of their business strategy.
The "Want It Now" Culture
Consumer behaviour is at the heart of this transformation. The digital era, with social media as a central player, has given rise to the "want it now" culture. Customers today expect rapid responses from businesses, and they desire brands to understand them deeply, not just at a functional level but also on an emotional level. Failure to meet these expectations often results in emotional reactions and complaints.
A study on insurance customer trends found that one negative experience was enough for 50% of customers to switch to a competitor. This underscores the importance of effective service recovery in the insurance industry, particularly during critical moments like the claims process.
The Experience Economy
The post-Covid era has witnessed heightened digitisation and a significant technological shift. While this has advantages in terms of cost management and customer benefits, it has also shifted power from businesses to customers, largely due to the influence of social media. Customers now have platforms to voice their experiences and opinions.
In this "experience economy," customers prioritise spending on experiences over material possessions. Insurance companies must align their digitisation efforts with customer journeys to provide personalised experiences. Moreover, the emergence of concepts like the metaverse demonstrates the need for insurers to adapt to evolving customer preferences and behaviours.
Artificial Intelligence (AI) and the Human Touch
As AI continues to advance, it is poised to play a significant role in customer service. However, Oakes stressed that the human touch remains essential. While AI can handle routine interactions, understanding customer needs, emotions, and next-best actions still requires a human touch. Customers are increasingly seeking self-help options and control over their interactions with insurers.
Conversational AI is expected to dominate frontline interactions, enhancing operational efficiencies and customer experiences. However, hyper-specialised support provided by humans will remain available, albeit at a premium.
In conclusion, the insurance industry's future success hinges on its ability to align customer experience strategies with evolving customer expectations and behaviours. Balancing the use of AI with the human touch, embracing digitisation, and offering personalised experiences are key steps toward meeting the demands of the "want it now" culture and ensuring lasting customer satisfaction.
Viljoen, N. (2023). How Customer Experience and Social Media Are Set to Drive the Short-Term Insurance Industry. [Online] Moonstone. Available at: https://www.moonstone.co.za/how-customer-experience-and-social-media-are-set-to-drive-the-short-term-insurance-industry/ [Accessed 14 September 2023].