Digitalizing Insurance: The New Digital Customer Experience

Insurers today face significant challenges to consistent and profitable growth. Foremost among these is the increasingly higher expectations of today’s insurance customer. Accustomed to the personalized and responsive service delivered by digital native brands like Amazon and Uber, insurance customers now expect efficient and personalized experiences from insurers.

The accelerating change in customer expectations, and the stakes involved, was noted in a global survey conducted by Bain & Company, “Customer Behavior and Loyalty in Insurance, Global Edition 2018, Customers Know What They Want, are Insurers Listening.” The survey highlights the ever-increasing role that digital is playing for customers in insurance, uncovering the fact that the number of digitally active customers has increased more than 60% in the last four years, with mobile channel adoption increasing approximately 70% in the last year alone.

While not surprising, the increasingly digital nature of insurance customers, as well as the continued desire by customers for seamless, omnichannel customer experiences, means that insurers must up their game and become more nimble in delivering exceptional service to prospects and policyholders. Unfortunately, while insurance customers continue to rapidly adopt digital channels, many insurers are not there yet. The Bain report, like numerous other industry surveys, shows that the vast majority of insurers are, in fact, “failing to deliver delightful digital experiences.”    

For insurers, the implications for becoming customer-centric are significant. Those insurers who have succeeded in delivering fast, efficient, and “hassle-free” service are seeing higher customer loyalty and referral as reflected by Net Promoter Scores (NPS) according to the report. Other cross-industry customer experience findings echo this result. The Aberdeen Group recently noted that across industries, companies with the strongest omnichannel customer engagement strategies retain an average of 89% of their customers, compared to 33% for companies with weak omnichannel strategies.

While a few first-mover insurers are seizing the promise of digitization and using it to win new customers and forge tighter bonds with existing customers, many insurers are being left behind. In addition, insurers are facing the challenge of new digital-native insurtech entrants. These digital-first upstarts are seizing the opportunity to deliver customer experiences that not only “meet” customer expectations but “exceed” them. Leading insurtech brands are effectively addressing the new customer expectations with digital service that starts with the customer in mind.

To address the challenge of higher customer expectations and drive a virtuous cycle of improved customer loyalty and referral, insurers would do well to adopt the approach of insurance leaders and digital native brands. Fundamentally, insurers must shift their IT mindset from a technology-first, “inside-out” approach to one that begins with customer needs in mind, provides digital and omnichannel access, and is fundamentally “outside-in.” Those insurers that succeed in delivering “delightful digital experiences” stand to reap the rewards of increased customer loyalty and profitability.

Interested in learning more about how leading insurers are adopting a customer-centric “outside-in” approach? Join us for a Guidewire webinar on July 9th featuring Insurance Corporation of British Columbia (ICBC) discussing how they transformed their claims service to improve efficiency and customer responsiveness. Register here.