Insurers have made significant strides over the last decide in improving customer experience through new technology or other initiatives, a new IBM survey found.
Approximately 85 percent of insurers added customer experience initiatives through some part of the customer process. Ninety percent of insurers now have a chief customer experience or chief customer officer at their companies, according to the IBM Institute for Business Value study: “Elevating the Insurance Customer Experience: Win Hearts and Minds With Data and AI.”
IBM noted that the current customer experience numbers represent a drastic improvement from its first consumer survey-driven insurance study in 2008. Back then, IBM said, “customer centricity and [customer experience] were still largely unknown concepts to insurers’ strategies, much less implemented in any meaningful way.”
But as the new study noted, customer experience, or CX, is an important element that drives customers’ satisfaction with their insurance. IBM credited insurers with catching up to that idea as much as they have, but said they still have a long way to go.
The study found that 42 percent of customers don’t fully trust their insurer, for example. Arguably contributing to that is an erratic embrace of the customer experience concept and technology that comes with it. Approximately 60 percent of insurance executives said their organization lacks a customer experience strategy, though 64 percent of consumers want their insurers to understand them well, something a strategy would help achieve.
What is customer experience? The IBM study explains that it addresses “the holistic perception a customer has of their relationship with an organization’s business or brand.” For an insurer, this cover the gamut, including areas such as website navigation and communicating with customer service agents or other intermediaries on the way from inquiry to purchasing and receiving the product or service in question.
Part of insurers’ embrace of customer experience improvements has involved investing in digital technology. The IBM study noted that those investments are rising, from 1.1 percent of gross written premium in 2018 to an expected 1.5 percent of gross written premium by 2022, a 36-percent jump.
“Insurers have expanded their efforts to broaden channels, simplify language, offer hybrid experiences (direct, direct to agent, agent-based), and increase the number of touchpoints throughout—rather than interacting only at the time of renewal,” the IBM study found. “At the same time, to reach increasingly internet-savvy customers, insurers are investing in various forms of digital self-service, mainly websites and apps, with some forays into chatbots and digital virtual assistants.
IBM said that the study involved interviewing 1,100 insurance executives in 34 countries about their customer experience initiatives. On top of that, IBM surveyed 10,000 consumers in 9 countries to track their own experiences. Both surveys were conducted during the COVID-19 epidemic, which IBM said has heightened the need for “positive” customer experiences.
“Insurance companies have risen to that challenge,” the study concluded.