By Keith Stonell, vice president -EMEA, Guidewire Software
The insurance industry had its battles with COVID-19, but consumers globally were left feeling that they had unanswered questions. As the world looked to the insurance industry to provide support around COVID such as business interruption policies, insurers were also urged to assess the effectiveness of their relations with customers. Insurers now desperately need to define exactly how customer relationships can be improved and what their immediate response should be.
Where insurers have been falling short of the mark in the customer experience game is in building robust relationships with policyholders. Research conducted by Censuswide during the first lockdown shows that there was a real level of scepticism around insurers’ attempts to help during the pandemic.
In the same study, customers felt their loyalty to insurers had been pushed to their limits during COVID-19, but perhaps not to the point of no return. While 22 percent of respondents claimed that the industry had let its customers down, 12 percent still felt positive about their insurers’ abilities to help during the same period.
There are positives too in how people now think about insurance. For the most part, people are receptive to services suggested by insurers that are aimed at preventing likely damages or losses. Insurers that rate highest for policyholders are those that are able to turn customer concerns into an opportunity to meet new needs quickly and meet market demand with new products.
Furthermore, because of the pandemic the research suggests attitudes towards the cover that people feel they need are changing, too. UK consumers are almost three times more likely to insure themselves against loss of income or illness than before the pandemic and twice as likely to get cover for online identity theft. This seems to stem from how the pandemic has made people more digitally dependent. Concerns about data security and identity fraud have grown, while cyber risks have become more apparent
Where old barriers to customers investing in cyber identity theft insurance are slowly disappearing, demand for job and illness protection products is also on the rise. As these have not typically been areas of high interest for consumers, those whose livelihoods have been impacted by quarantining, lockdowns and the wider health hazards of the pandemic now look to insurers to respond with appropriate products for protection.
In the area of new services and the use of new technology, it is important that insurers consider offering their customers meaningful benefits. For example, the majority of Censuswide’s respondents (81%) expected reduced premiums if they do adopt measures like driver behaviour monitoring, home security cameras or other services which were actually designed to reduce risk in the first place.
With new opportunities highlighted by this research, the economic shock of COVID-19 has apparently renewed an appetite for change within the insurance industry. This affords insurers the opportunity to consider how they can improve the ways they look after customer property and livelihoods in these uncertain times.
To do so, they should look to customers’ needs. The qualities revealed by Censuswide’s research to be most important for an insurer, according to respondents, indicate the areas where insurers can really make a difference in improving the customer experience. Notably outranking low premiums, the top three priorities for policyholders were ability to pay claims quickly, commitment to keeping customer data safe and availability of human customer service staff.
The impact of COVID has not happened in isolation. Insurers have already been adapting to demographic changes over the years, and they know that better engagement strategies are long overdue. Investment in technology, data and analytics will provide them with the tools they need to get closer to their customers, and provide meaningful products and services.
While it seems that an appetite for innovation exists among insurers, change will have to be on the insured’s own terms. Many call for insurers to be forward thinking and to introduce modern solutions for current problems, but they mostly want strong allies that they can rely on in uncertain times.
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