Comment & Analysis

Shifting customer demands and experience in the insurance space

By Alexandra Foster, director of insurance, wealth management and financial services at BT

In an increasingly digital world, human interaction remains important. In the insurance industry, a potent combination of technology, data analytics and AI, has transformed the user journey to allow insurers to use technology to put the customer first.

As regulators and customers alike demand transparent and more responsive interactions from their insurers, a subtle but important pivot to placing customer needs at the centre of technological innovation has emerged.

BT is a leading global provider of communication solutions, working with global insurance providers to streamline customer communications. Traditionally, the insurance industry is one that has low customer touch points, but this is starting to change.

In a world where Google can answer any question at the click of a button, customers have grown to expect seamless service in other areas of life. Consumer expectations for the insurance industry have risen and insurers have used technological innovation to meet them.

During the pandemic, insurers were quick to respond to the new reality that digital transformation would be necessary to maintain customer satisfaction. With traditional avenues of communications such as face-to-face interactions restricted, the pandemic accelerated the innovation of technology aimed at personalising the customer experience.

Data analytics and AI gave rise to personalised video and chatbots that allowed insurers to engage at key moments in the customer lifecycle that have a huge impact on customer satisfaction and churn.

Using technology to visualise, illustrate and explain specific policy elements to each customer on a large scale is a huge differentiator for insurers. BT’s research shows that 47% of UK customers believe using the phone is the fastest way to solve complex issues and 71% of consumers would use video chat to discuss a financial services product.

By developing technology that allows chatbots to answer complex questions in a process as simple as sending providers a few lines of text or using voice activation to ask a question aloud, insurers have created a frictionless experience that places the customer at the heart of the business.

The benefits to insurers of the accelerated adoption of new technology have been immediate. Already, effective personalised communications have led to net promoter score (NPS) increases of up to 45% and a 38% uplift in renewal rates. As a customer loyalty metric, the NPS measures customer willingness to not only return for a purchase or service, but also make a recommendation to their family, friends or colleagues.

This rise in NPS signals the strong progress insurers have made in increasing customer satisfaction during an incredibly challenging period. Further, beyond improving the customer experience, insurers have seen secondary benefits in the form of reduced operational costs. The rise of personalised video and intelligent chatbots have streamlined claims management processes on a large scale, leading to significant reductions in inbound calls to call centres.

With the effects of the pandemic likely to reverberate throughout 2021 and beyond, insurers will probably continue to bolster communications and sales by innovating through data analytics and technology. For the foreseeable future, finding opportunities for value creation and remaining versatile will be key challenges insurers face as the world adjusts to the ‘new normal’.

Insurers who place customer satisfaction at the centre of their business and innovate to create a seamless insurance-customer experience will no doubt emerge as ‘winners’ of this challenging time.

By Alexandra Foster, director of insurance, wealth management and financial services at BT

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