The foundations of a good customer experience (dubbed ‘CX’ for short in the circles of those who study customer experience) are just starting to be laid out by companies today who are putting money into technology, and significant thought into just what makes a good customer experience.
This phenomenon and development is not exactly unique to the Canadian marketplace, but is somewhat more pronounced in this country, relative to other countries around the world. Monique Hesseling, managing director, insurance with enterprise data firm, Cloudera Inc. says in Canada specifically, there is a huge uptick in projects being undertaken with the customer journey and customer lifetime value as their focus. “It’s really more prevalent in Canada than in a lot of other countries, this specific focus on the customers,” she told those gathered for the virtual Future of Insurance conference hosted by Reuters Events.
A look at CX today
In the current reality, however, many companies are still grappling with the fact that historically, customer data was and still is maintained in function-specific silos. “In the insurance industry, in particular, data has been siloed,” says Environics Analytics senior vice president and practice leader, Catherine Pearson. “It’s been siloed more so than any other industry we work with.”
Where companies once relied on information asymmetry between insurance companies and their customers too, this is disappearing as well, all while insurers find themselves competing, not just with each other, but also with the customer experiences being provided by companies outside of the industry.
“Organizations in a time of pandemic, or any time of down market, organizations start to think about what they know about their customers.” - Catherine Pearson
Companies are also being forced to do more with less right now. “Organizations in a time of pandemic, or any time of down market, organizations start to think about what they know about their customers,” Pearson says. “It’s all about understanding who they are.”
Multi-channel approach
And while the experts say 85 per cent of personal insurance business was traditionally routed through brokers, today companies are learning that a customer’s channel or distribution preferences are situational. Where it was once thought that younger clients would buy direct and older clients would use a broker, or that clients could be definitively segmented by age or assets, insurers and their distribution partners are starting to come to grips with the fact that a multi-channel approach is now needed to serve almost all clients.
This development, says Marcelo Regen, Allstate Insurance Company of Canada, vice president of brand innovation and chief customer officer, has resulted in companies rethinking how they train their distribution partners. Instead of thinking they are in competition with other channels, with the company’s app or with direct service, he says brokers need to think about all channels as part of the value customers get when dealing with any particular company. “You need to make sure that your distribution system, your contact centre and your agents, if you have a physical presence in communities, leverage those digital assets as part of their value proposition.”
Changes coming soon
More, Regen adds that customers want to be able to communicate with agents across all channels, including phone, online, and now by video chat, as well. “They not only expect agents to provide insurance-specific advice, they expect a tailored approach when it comes to the products and services they purchase.” Even in the property and casualty insurance industry, he says the agent’s role is becoming much more of an advisory one.
“It is critical for insurers to really imagine what aspects of the customer interaction will be centralized, how we will be leveraging our other parts of distribution and how we will be training our agents and our service representatives to be competent,” he says.
He says savvy insurers will or should also embed a culture of continuous improvement that will empower those using systems to challenge and simplify the way companies manage work processes. “This is critical because we want to avoid over-engineering our processes. We want to avoid workarounds. We want to protect ourselves from mechanizing inefficiencies.”
Looking into the future, those gathered for the virtual presentation say segmentation will be based on behaviours. They add that cross-subsidization will probably decrease, leading to the question of how to insure the outliers. Will they be left out? Regen asks. “Probably not because we have values and we value inclusivity. So we will need to find a solution for that.”
Why embrace CX developments?
There are a number of reasons why companies are beginning to look at the total customer experience – some obvious and some more subtle.
Stating the obvious: Consumer preferences have changed, notably and dramatically. They want ease of service and tailored solutions. Perhaps obvious to some but not all, the industry may also have a bit of a reputation problem.
Christian Bieck, global research leader, insurance, with the IBM Institute for Business Value says companies have done well during the pandemic, offering premium rebates and in some cases insuring losses that policies and contracts do not actually cover, all in the name of improved customer experience. As a result, more people say they trust their insurance companies. That said, the number of people who say they do trust insurance companies remains persistently low.
Low trust levels
According to IBM’s research, 58 per cent of the consumers they surveyed said they trust their own insurance company; the number is up 11 per cent since 2014 when the company found only 47 per cent of respondents said they trusted their own insurance companies. “Almost half of customers do not actually trust their own provider. Even worse, more than half say they do not trust the industry, per se. That is a number that we have been looking at for the past 13 years since we started the first consumer survey in insurance. The number has been consistently below 45 per cent.”
With this as the backdrop, combined with the fact that two-thirds of customers want insurers to understand their feelings, emotions and what they are all about, many insurers are presently looking to data-driven initiatives to guide their future endeavors.
“The past is no longer a good predictor of the future,” says Regen. “Our experience, our gut feel that has been nurtured by all of those prior experiences may no longer be as valuable as it used to be. Going back to analytics, which requires this centralization and augmentation of data, is more critical than ever.”