The insurance industry runs some of the largest contact centers in the world. As a sector, it tends to appreciate scale and resilience, and was rather quick to adopt new trends such as omnichannel, Digital, and self-service. However, the past year hasn't been easy on insurers, who are once again forced to adapt their customer service strategies to keep up.
Natural disasters, extreme weather, geopolitical tensions, and an increase in shallow fake AI claims all result in higher premiums. In the UK alone, the Association of British Insurers (ABI) has reported a 34% increase in premiums in the 12 months to the end of 2023.
With many insurance customers, including Europe’s largest two providers, Content Guru sees this shift in the industry up close.
"Unsurprisingly, this sharp increase in premiums has been leading to less satisfied customers," notes Martin Taylor, Deputy CEO and Co-founder of Content Guru.
The latest annual service by the UK Customer Service Index (UK CSI) showed that customer sentiment in the insurance sector is at its lowest since 2015.
"Essentially, customers are paying more without a substantial improvement in service – and they're not happy about it," he says.
This has led to a crisis of customer loyalty, with customers shopping around more. Now, insurers must work harder to build and maintain loyalty from their customer base.
So, what can insurers do in the current climate to differentiate themselves and maintain a competitive edge? Quite a lot, in fact. Let's dive in.
From Reactive to Proactive
Naturally, the first thing insurers must do to improve sentiment is to detect poor service and fix it. However, the industry's traditional service model makes this task quite problematic.
"If you look at the traditional model, insurance is renewed annually, so, typically, contact would happen about once a year towards policy renewal," Taylor says.
Historically, that was seen as a good thing – If you weren't talking to your insurer, you didn't have a claim to make. And for the insurer, not hearing from the customer often kept costs down.
"It's a kind of transactional detente that people were happy with," Taylor notes. "But now, from merely being reactive, insurers must start being proactive."
What does that mean, exactly? A few examples would be building trust using regular communications, reaching out to the customer with useful advice, and sharing relevant insights and information – like alerts on coming extreme weather events.
"People don't want to be contacted too often, but if there's anything relevant to them, they'll want to hear about it," Taylor says. "And obviously, contact centers and CX technology are at the heart of that."
However – hold on to your seats – according to Taylor, even 'proactive' isn't sufficient anymore for insurers to stay ahead of the game and maintain customers in the long haul. The real new key term is 'dynamic.'