How Traditional Insurance Companies Can Retain Customers In a Digital World

It’s becoming harder and harder to create genuinely positive experiences for customers when the cost to serve them is high, but with clever strategies for customer retention traditional insurance companies can reduce the dreaded churn.

A recent report on customer experience states that consumers that have a good customer experience (CX) are five times more likely to recommend a product; while after a bad customer experience with a company, 19% of consumers stopped doing business with that company all together. Great customer experiences are key to retaining customers!

Traditional insurance companies often have difficulty differentiating themselves based on product features and claim service alone. To increase retention, Accenture suggests insurers take advantage of digital technologies to offer better services to their customers. In the following discussion we attempt to explain how to deliver better customer experiences and retain more customers using artificially intelligent conversation.

Listen to the data, listen to the people

Some customers prefer to communicate by email, some by phone, while some desire instant responses. Email and phone both have flaws with long wait times, spam, low open rates and customers often being transferred from department to department. Traditional communication methods open themselves to bad customer experiences in insurance enterprises when the volume and cost to serve is high.

With over 1 billion people using messaging apps (that’s more people than are on social media), insurance companies need to adapt. Research also shows that more and more people want the option of self service and to communicate by mobile (Forbes) with instant communication. Artificially intelligent conversation connects with people via various means including messaging apps, so is an effective and efficient way to provide a great user experience for those customers that wish to engage this way.

The writing’s on the wall — customers expect good experiences and efficient communication by means they already commonly use. This isn’t to say that other methods are all together ineffective, but for many customers they just don’t cut the mustard.

Keep up!

According to Deloitte, traditional insurers can be slow to keep up with digital demands and potential capabilities, while many InsurTech startups and incumbents are capitalising on this by offering new business models and improved customer experiences. Gartner predicts that by the end of 2019, 30% of digital insurance sales and service will be supported by AI and cognitive computing!

These disruptive players offer faster claim payments, price transparency and self-service policies, more efficiently. There is serious competition for traditional insurance players!

If traditional insurers can innovate digitally and offer some element of self-service, instant responses and flexibility to existing customers that want it, they’ve got a better chance of keeping up with a new digital world and retaining customers who might otherwise shift to the dark side.

Keep it real

We all know that offering human assistance on the other end of the line is a fantastic way to build trust. However, delivering quick responses can be tricky in large organisations with high costs to serve — what starts with good intentions ends up causing customer frustration. Artificially intelligent conversation can be a means to bridge this gap.

This sophisticated, new age version of what’s colloquially called a ‘chatbot’, uses natural language processing to deliver natural human-like responses to customers, instantly, 24/7. It’s always a good idea to be honest at the outset of an artificially intelligent conversation to let the user know they are speaking with a friendly insurance bot, and that at any time they can choose to speak with a human. The virtual agent or broker can deliver personalised responses as the conversation always picks up where it left off and the conversation engine can remember personal preferences. The human handover element is important for complex issues or for those customers who prefer to speak with a human.

What insurance companies can capture with this technology is the ability to serve a larger portion of their customers instantly, without removing the human element all together — it’s the best of both worlds. This is an effective way to build loyalty — customers know they don’t always have to wait for a response but they can speak to a human if they so wish. The human agent is then more freed up to better deal with those complex issues when they do arise, again delivering a better customer experience and improving customer retention.

No one likes nasty surprises

Communicating changes can be difficult — emails often go to spam or people simply don’t open them, and it’s unlikely customer services teams have the capacity to ring every customer to notify them.

Another option for communicating account changes in a friendly way is by broadcasting a message on a messaging app with artificially intelligent conversation. Once a customer has initiated conversation with a virtual agent or broker, they have accepted to also receive messages. With broadcasts usually receiving high open rates of about 50–80%, insurance companies can better communicate account changes like price. There’s no nasty surprises and the customer knows their insurer has done everything it can to communicate the change, again boosting the CX!

The data has spoken — better customer experiences should be integral to customer retention strategies in today’s disruptive landscape. Artificially intelligent conversation can be an effective option for traditional insurance companies to deliver better customer experiences and reduce churn.