Customer Expectations Are Disrupting the Insurance Industry

By: Karna Trautman, Head of Strategy and Transformation

In a previous blog, NEOS Senior Principal Chris Dickinson analyzed ways to optimize the customer experience in the insurance industry as a means to stay competitive. Consumers today expect customer experience to be seamless. According to a Frost & Sullivan report, by 2020, customer experience will overtake price and product as the key brand differentiator.

To inform them about ways to improve customer experience, insurance leaders have traditionally relied on escalations and customer complaints to obtain experience disruptions. In fact, in a recent LIMRA and NEOS report of life and annuity carriers, it’s noted that 81 percent of carriers use reactive moments—like complaints and escalations—to acquire information about policyholders. However, as consumers’ expectations change, so must the customer experience strategy behind it.

[REPORT DOWNLOAD: Next Level Customer Experience: How do Insurers Get There?]

The approach toward improved customer experience has shifted from reactive to proactive. An increased ability and ease to jump to a different insurance carrier has disrupted the entire insurance industry. In the IoT, consumers are privy to find the best-suited insurance to their liking—from cost to policies and overall customer experience. Because of this shift, the tools, tactics, leadership, and even the insurance business model itself have all gone through an evolution to become more human center designed and consumer-driven.

The insurance business has changed swiftly from reactive to proactive, with carriers looking to gather feedback throughout various stages of the customer journey. In the same report, survey results suggest that most annuity and life insurance carriers have begun investing in proactive tools to understand the customer journey better and meet customer expectations and behaviors. Customer journey maps, self-service capabilities, and voice of the customer mechanisms are some of the activities and tools insurance carriers lean into to capture this feedback throughout the customer journey.

The game-changer for many insurance carriers is the heavy investment in big data to better understand customer behavior, application to daily life, web engagement, social media activity, customer support access and experience, and so on. By aggregating and analyzing this data with information from agents, distribution partners, and other company team members, the business will have a clearer understanding of the entire 360-degree customer experience journey.

As a whole, the insurance industry is vast and competition is fierce, so those who wish to compete and challenge the status quo will listen, analyze, and act quickly to deliver a seamless customer experience. One thing is certain, customer expectations will continue to disrupt the insurance industry.

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