The difference between companies that deliver a great customer experience and those that deliver a below-average customer experience has always been clear regardless of the industry served.
Executive SummaryUnderstanding the relationship between a company's customer satisfaction performance and its financial results allows executives to make better decisions on the investment of resources for the benefit of owners and members, argues J.D. Power's Jessica McGregor. Here, she presents results of a J.D. Power analysis of the links between underwriting profit and customer satisfaction indices, along with a Watermark Consulting analysis of the relationship between customer satisfaction and stock price performance.
A great customer experience is just as important for insurance companies as it is for companies like Amazon and Google.
J.D. Power’s cross-industry research demonstrates that companies that deliver the best customer experience also end up with the greatest financial performance. Insurance executives must balance profitability, investments in operations and customer satisfaction improvement initiatives, as moving the level on one can significantly impact the others.Findings of the 2016 Customer Experience ROI Study by Watermark Consulting, a U.S.-based customer experience advisory firm, showed that publicly traded auto insurance companies with the highest customer experience performances in J.D. Power research significantly outperformed the industry when looking at cumulative stock performance over the last seven years (Figure 1, below). These same findings hold true for publicly traded home insurance companies. Personal lines companies with a focus on customer experience clearly deliver higher revenue and profits. (Editor’s Note: Watermark Consulting Principal Jon Picoult points to factors like better retention, reduced acquisition costs and fewer complaints to explain the results.)
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