Customer Engagement Starts Here: Measuring Trends in the Insurance Experience

For several years now, Majesco has been discussing the most crucial question insurers have on their plates.

“How easy is it for a customer to do business with an insurer?”

At one time, it almost didn’t matter. Those who needed insurance accepted the hurdles and hoops of the insurance process. That was the process for decades and everyone abided by the way insurance worked. Today’s customer has challenged and flipped that model on its head. Now, the experience and ease is everything. Customers want the process to meet them where they are. They have a set of new rules of engagement:

• “I need it now.”
• “I need to understand the product and process easily and quickly.”
• “I need you to use almost none of my time.”
• “I need the process delivered to me seamlessly wherever I wish to do business.”

These are the criteria that insurers must consider as they reimagine and rebuild their business models to fit the future of insurance. Insurers must not only abide by these rules of engagement today, but they must also predict where, when, how and what will engage customers in the future.

In Majesco’s recent thought-leadership report, Building a Business Model for the Insurance Customer of the Future, we take a close look at today’s customers to assess the trends that we have been tracking year over year. This blog will look at some of the most relevant insights regarding customer engagement. Can we utilize what we know to build a meaningful business model? Are engagement, experience, and the customer journey really that important?

The Experience as the Product

Think of successful companies and you are liable to come up with a quick list of names where the customer experience is so important to the end product that the two are virtually the same. Southwest changed the way people fly. Amazon changed the way people research, shop and receive deliveries. Spotify changed the way we listen to music. Tesla recently announced that it would only sell cars online. Netflix changed how we rent and watch movies.  They are all proving that if something can be sold, it can be sold in a way that fits the customer better – adapting to their needs, expectations and changing behaviors.

Savvy InsurTechs and existing insurers know their success depends on more than just the products and services they offer. In today’s digital world, the experience becomes the product, especially when your core offering is an intangible product – a promise to help your customers recover from loss. In Majesco’s report, we looked at the experience through the lens of the customer, by specifically asking about:

• Shopping Channels
• Customer Journey Touch Points
• Engagement Channel Satisfaction

We found that insurance customers are truly interested in engaging with insurers across a broad number of channels.

Shopping Channels are Shifting

Customers’ first direct impression of insurance companies is formed as they engage with channels (both within and outside of the company’s control) for research, quoting, applying for and buying insurance. In this multi-channel environment, it is crucial to have a channel strategy that meets customer expectations for when, where and how they want to interact — and is consistent in the price and experience.

Growing percentages of all generations are completing their purchases of new insurance policies online. Almost half of Millennials have already done this. Gen Z is at 34% and Gen X customers showed an 11-percentage-point increase over last year to 33%, reaching the same level as Gen Z.

Customers are using a broad array of channels to research their options prior to purchase.  Insurance company websites and insurance agents/brokers are the top two shopping channels used by all generations. But that is where their similarities end. Boomers use agents at twice the rate of company websites, and they barely register use of any other channels beyond these two, except for 10% who use a search engine.

Gen X shoppers use company websites and agents at nearly equal rates, and nearly 20% use a search engine. They tally some usage in nearly every other channel, but it is very small. Indeed, Gen X uses agents/brokers between 5 (comparison sites) and 26 (social media) times more often than these other channels.

Gen Z and Millennials also register at least some usage in all of the channels. Gen Z uses comparison/review sites at twice the rate of Millennials (16% vs. 8%), but Millennials have the highest usage rates in 7 of the 11 channels, making them the multi-channel champs.

The shopping channel takeaway is that multi-channel preparedness and growth is essential to customer engagement and service, particularly for the next generation of buyers  — Millennials and Gen Z.

Customer Journey Touch Points Need to Be Individually Assessed

Digital engagement sounds like a technological issue, but Digital Insurance 2.0 is about so much more. It is about using digital to reshape the customer journey so that the insurance product fits the individual, family or company. What happens, for example, when up and coming generations don’t fully grasp the product you are trying to sell? Majesco research points to this growing issue — mature generations have a mature understanding of the insurance process and they are most comfortable with the insurance journey. Other generations, even Gen X, view these touchpoints as more complicated. Insurers must increasingly use digital engagement to educate the customer through the journey. In fact, education may even act as the “engaging hook” in the research portion of the customer journey.

When examining the full scope of customer journey touchpoints, all generations rated paying their policy premium as the easiest touch point. Researching policy offerings is the hardest part of the front-end for all consumers and tracking the progress of a claim is the stickiest part of the back-end for all except Boomers.

What does this mean to insurers? Engagement at the point of research is necessary, which means that research channels will need to improve. What does Siri say when she is asked to find a life insurance policy? What can Alexa do to place an insurer’s product in front of the researching customer? Artificial Intelligence and channel readiness for up and coming research tools, such as Alexa, will be just as crucial for insurers as any product placement has ever been.

The real lesson for insurers is that each touchpoint deserves its own look. Is the point fulfilling its purpose while bringing ease to the customer/insurance interaction? Is each touch point doing all it can to contribute to the experience or is it unnecessary in a reimagined and simplified process?

Engagement channel satisfaction is high, with digital moving higher

Gen Z and Millennials are satisfied with most engagement channels they have used to interact

with insurance companies. They have clear favorites, including voice/phone, face-to-face, e-mail, website, digital payments and smart phone apps. Not surprisingly, Boomers are the most satisfied with the personal voice and face-to-face channels. They are also satisfied with e-mail, digital payments and insurer websites, but they don’t have enough experience with many of the other channels to even provide a rating. Gen X and Boomers demonstrate their familiarity with and preference for the more limited set of traditional engagement channels incumbent insurers have long used in their business models, while Gen Z and Millennials demonstrate their expectations to use multiple methods for engaging with insurers.

Digital payments are earning high satisfaction from all customers, including Gen X and Boomers. This is an engagement capability that is becoming a table stakes requirement. It will require a flexible billing system to accommodate. Smart speakers are starting to show signs of growth in channel rankings.

Adopting the New Rules of Engagement

Customers expect companies to offer multiple ways to get something done. All channels must be both independently effective and work seamlessly and cooperatively to provide a consistent and satisfying customer experience — one that is unique to each customer. Insurers that offer a limited set of options, a one size fits all approach and/or siloed channels that don’t work together will find themselves in a perilous position of weakness for acquiring and retaining customers — putting their future at risk.

In designing customer engagement strategies, insurers first need to think about the questions customers want to get answered, their expectations on how to engage, the problems they are trying to solve and the tasks they want to accomplish. Then they must create an ecosystem of channels whose varied capabilities match the requirements of their customers’ desired outcomes.

Even before Majesco measured digital engagement with customers, we were building a digital platform that would allow insurers to bring plug and play digital capabilities within their own processes. We knew that insurers would also be wanting to measure and adapt their digital engagement channels, so we created solutions that foster and support clear understanding and rapid refinement. To learn more about Majesco Digital1st Engagement™, visit Majesco’s Digital1st Insurance™ site today and while you are there, be sure to download Building a Business Model for the Insurance Customer of the Future.