Mon, 29 May 2017 12:24:14 +0000
By Chungu Katotobwe
Traditional insurance products comprised of accident, health, property, casualty, life and annuities insurance.
These categories of insurance are faced with slow growth and need consolidation.
Price competition is accelerating as customers turn to internet data aggregators to shop for the best deal on many types of insurance.
In addition, while the insurance business and the needs of policy holders and distributors are rapidly changing, many insurance companies can not keep up because they are unable to differentiate their business, reach customers likely to respond to new sales opportunities or make the most of their valued staff.
Insurers that define and implement solutions to these challenges are those that will successfully compete and thrive into the future.
I examine the strategic role of the contact center in the insurance industry, and how it can deliver the increased revenues and cost savings that will drive profitability and shareholder value.
It also introduces ten essential strategies you may interact, when possible, with a life-time advisor who is intimately familiar with the client’s history and needs.
Demographic matching is also a way to assign the customer to an agent who has a common demographic profile.
Facilitate integrated and consistent cross-channel interactions. Offer an inviting customer front door.
Get customers off the phone and onto the web. Handle calls more intelligently. Give agents the information they need to do their jobs. Initiate proactive Contact.
Make more effective use of customer data and segmentation. Optimize business process execution.
Create a winning team effort with contact center virtualization and boost agent productivity through interaction and blending. This list of ideas is not exhaustive, but gives an idea of what needs to be done.
The key challenges facing the insurance industry are industry maturation and price competition which impede growth.
In light of slow insurance industry growth, larger insurance companies have pursued merger and acquisitions to grow market share and to achieve economies of scale.
Most times the surge in customers is often driven by consumers who aggressively shop for the best price, particularly for non-life insurance products.
In fact, downward pressure on profit margins will continue at this pace, as more and more consumers surf the internet to compare prices, assisted by the growing popularity of data aggregators that present insurance products from carriers as undifferentiated commodities sorted by price.
Let us also look at the reasons for customer turnover in insurance. Just because price matters the most, does not mean that service matters little.
Surveys show that nearly 60% of insurance customers who have had a bad contact center experience will consider switching companies, and 25% say they will definitely switch companies because of a bad call center experience.
Surveys further highlight the high stakes of customer service. Most insurance consumers say that customer service has the biggest impact on their loyalty to a company, and that a poor call center experience was the sole reason they stopped doing business with a company.
Although customer service is clearly very important for winning new customers and retaining existing ones, insurance companies struggle to achieve acceptable customer satisfaction levels in their call centers.
For both non-life and life products, price shopping is the major contributor of customer turn over, followed by a poor customer service experience.
Can use to realize this potential by improving the customer experience, leveraging cross-sell and up-sell opportunities and promoting agent productivity and satisfaction:
Make more effective use of customer data and segmentation, given slow growth in a mature market.
Some insurance companies are abandoning their product-centered approaches to selling.
Instead, they are maximizing the lifetime value of customers through cross-selling and up-selling.
In this new paradigm, using customer data and segmentation to anticipate the future needs of individual customers becomes more import than mass marketing. Going one step further, high-value policy holders and distributors.
Satisfaction with insurance call centers is low compared to other industries.
Not only are insurance companies failing to provide adequate overall contact center customer satisfaction, many carriers are having trouble meeting the needs of specific constituents, most notably agents and brokers who are among the most important sources of new business.
For example, an insurance industry survey on customer service differentiation showed that while more than 50% of insurance carriers identified current policy holders as the primary audience for their customer service efforts, only 20% identified agents and brokers.
Ease of doing business and personalized service is the most important factors influencing agents when choosing which carriers to work with.
Analysis also shows that the insurance industry’s one-size-fits-all model for servicing agents is not working.
Larger agencies may demand service level agreements and require dedicated service teams, while midsize agencies may need local service, and smaller agencies, who are expensive to service, may need centralized call centers and self-service tools.
Health, property, casualty and life insurance companies have call center satisfaction scores that lag behind catalog retailers, banking, cell phone services and cable and satellite television.
Insurance companies are dissatisfied with the results of their cross-selling or up-selling efforts in response to slow industry growth; many insurance companies are trying to grow organically by cross-selling and up-selling more products.
Opportunities abound as mergers and acquisitions have broadened offerings across accident and health insurance, property and casualty insurance, life insurance and annuities.
Innovative insurance providers have been making attempts to combine with banks to create economies of scale and enter new markets.
Lack of customer interaction is one of many factors that limit selling opportunities in the insurance industry.
In insurance, customers rarely interact with their agents or their principal distributor, which is in stark contrast to customers in the banking industry for instance, who interact with their banks every other day.
Consumers are increasingly bypassing their insurance agents and using the Web to research products and prices.
As the customer uses the web, agents can pick up where the customer left off at each stage in the sales process, regardless of which channel the customer was using.
For example, if a customer had gone online to request a quote, the call center would be aware of this and take steps to close the deal with him/her.
Offer an inviting customer front door which also serves as a guide to the insurance company’s services, and determines how well the company can decrease the volume of calls that agents must handle or reduce handling times.
Traditional interactive menus have frustrated customers with long and confusing menu trees. Look out for part II.
The author is a consultant
at Insurance Culture Consultancy
Lusaka
