The pandemic has been a CX challenge as well as an opportunity for insurance companies

Since the start of the pandemic, insurance companies have had to be innovative with their CX strategies while having to adjust quickly to introduce innovations like remote working at scale, and also move to a no-touch claims assessment model. In a recent Deloitte survey, 48% of insurance executives agreed that the pandemic “showed how unprepared our business was to weather this economic storm.”

As a result of having to rise to these challenges, insurance company leaders have been forced to change their priorities by accelerating some programmes while delaying others. 95% of the Deloitte survey respondents are speeding up digital transformation by replacing legacy technology with cloud software in order to enable new ways of interacting with customers and distributors.

Digital transformation is about customers not technology

While it does require significant investment, digital transformation is seen as a route to longer-term cost reduction particularly when it comes to managing customer interactions during the sales and claims processes.

Crucially, cost reductions in these areas cannot lead to a corresponding drop in the customer experience or in customer satisfaction; in fact, the opposite has to be true to maintain or grow market share particularly against new, tech-savvy market entrants and to guard against the growing trend of disintermediation in the industry. Customer experience has to remain king.

CX challenges during the pandemic

The labour market shortage has meant delays with getting work done, delays with processing claims, a shortage of contractors to undertake work (like repairs, panel beating and so on), and of course a shortage of workers in insurance company contact centres and claims centres, slowing things down even more.

This has led to customer frustrations as claims take longer to get processed and repair work longer to get completed – sometimes three times longer in our experience. That isn’t what customers signed up for when they bought their policies, which leads to poor customer satisfaction at the all-important ‘moment of truth’ in their relationship with their insurance company.

Customers might understand the issues faced due to labour shortages, but the truth is they just don’t care. At the same time agents are more anxious, stressed and have been working from home for much of the last 18 months. Of course, the customers they are dealing with have been going through the same thing, so there can be a cumulative effect if it’s not managed properly. Employee experience therefore needs a lot of attention, particularly to implement remote and hybrid working models.

The most immediate impact of this for insurance companies are the increasing costs of managing the claims process, with more human touchpoints, particularly if customers are calling in regularly for updates on their stalled claims. This presents a real risk of customer churn down the road, which means lost revenue and profits.

Digitise and automate your CX strategy

The first and most obvious thing to do, to make it easier and more cost effective to handle the increased number of touchpoints, is to migrate them away from voice channels as much as possible.

While voice channels have their place in managing high net worth or complex transactions and in giving emotional reassurance to customers, the majority of the claims process involves asking for information and giving updates on progress. Regular proactive updates ensure dissatisfaction does not become an issue even if claims drag on.

Customers don’t like longer claims, but they are less likely to blame their insurance company for delays if they are kept updated regularly. Even if there is nothing or little to update, telling the customer that shows you are on top of their case and deflects the inbound frustrated call they would otherwise make.

For those routine requests for information and updates, go proactive and use outbound digital channels such as SMS and messaging. Connecting with your customers on Messenger, WhatsApp or their messaging service of choice is not only super convenient for both parties, your brand and relationship with the customer can also benefit from the increased emotional attachments consumers have to those channels.

Not only are costs reduced with the whole process smoothed out, alongside a vast reduction of effort for both sides, but all interactions are also automatically documented as they are text-based. You will also find that any number of these steps, and their accompanying outbound messages and confirmatory replies, can also be automated for a more consistent customer experience.

Case management and the employee experience

On the operational and human resource aspects of the claims management process, there are also changes you can implement that will improve the speed and efficiency of processing claims, as well as help your agents cope with the workload and increased stresses of remote working and dealing with more stressed customers.

Automation can be used in the claims management process by automating the distribution of workflows through to the Workforce Management (WFM) planning team. The case management system distributes tasks – including prompting outbound messages – to case managers to keep everything moving. It’s the automation of management productivity.

Something else to consider are dedicated case managers. With customers speaking to the same agent, this can help reduce the number of touchpoints and build trust towards serving the customers’ needs more effectively and hence, resulting in reduction of overall effort plus a better customer experience.

Cut out and sub out

Most of the suggestions outlined so far require digital and automation technology. This includes adding new channels such as messaging and integrating them seamlessly with the claims management process and workflows.

On top of the technological aspects, there are challenges around customer experience and managing costs. Insurance companies are great at their core business, but they are not experts in CX or the technologies that deliver modern, omnichannel digital experiences to customers. Legacy technology often gets in the way of allowing digital integration, automation and case management.

In this case an option can be to simply cut the channel out and contract all or parts of the claims processing out to a CX specialist. BPOs these days are generally charged not just with taking over a function but re-engineering it from the ground up. They are basically asked to solve a problem using the CX and technology experience they have earned across a range of industry segments, not just insurance.

Above all, CX remains king

The next few years for the insurance industry are going to prove immensely challenging. The economic fallout from the pandemic will need managing for many years. Lifestyle changes forced on us all and accelerated by the widespread adoption of digital and virtual technologies will create opportunities for new insurance products to be developed, and for customer relationships to be managed in new, innovative ways which will be more beneficial and economical for both parties.

The ongoing process of digital transformation – replacing legacy technology with cloud-enabled modern platforms – will focus first on reducing the cost of customer interactions while maintaining or improving their speed and quality.

Ultimately, as with any industry that needs to maintain in-depth customer relationships, which pivot around one or two crucial ‘moments of truth’, management of customer experience is of the highest strategic priority.

TSA are Australia’s market leading specialists in CX consultancy and services. We are passionate about revolutionising the way brands connect with Australians. How? By combining our local expertise with the most sophisticated customer experience technology on earth, and delivering with an expert team of customer service consultants who know exactly how to help brands care for their customers.