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How Can Insurance Companies Turn Grudge Into Gratitude?

3 minute read
How Can Insurance Companies Turn Grudge Into Gratitude?
4:28

Insurance comes in for a hard press – it’s a service that we buy because we ‘have’ to, in the hope that we never need to use it. And if we do use it, it’s often in stressful circumstances. The challenge for insurance brands is how to turn functional interactions into experiences that customers appreciate.

Rebecca Stephens, Director, CX, Ipsos

Insurance comes in for a hard press – it’s a service that we buy because we ‘have’ to, in the hope that we never need to use it. And if we do use it, it’s often in stressful circumstances. The challenge for insurance brands is how to turn functional interactions into experiences that customers appreciate.

Perhaps not surprisingly, our recent UK CX Report with Engage Business Media shows that insurance is the sector with the lowest proportion of customers saying they are ‘very likely’ to recommend their provider (27%, versus an average of 36% across the seven sectors we investigated). And only 30% of insurance customers say they experienced something positive in a recent interaction, well below the average of 42% overall.

The good news is that it’s not all bad news. The insurance industry shows no more negative experiences than the other seven sectors. What we see instead is a much higher proportion of people saying that their experience contained ‘nothing notable’: 60% of customers, compared to 47% for the whole study.

By applying the Ipsos Forces of Customer Experience framework to obtain a better understanding of customers’ functional and relational needs, we can identify the buttons that brands need to push to drive stronger relationships. The six Forces are: Certainty, Fair Treatment, Control, Status, Enjoyment and Belonging

The main negative experiences we uncovered within insurance were: price (including increasing premiums, poor deals for loyal customers, and additional charges), difficult processes (long queues for call centres, inadequate digital functionality and slow claims processes), lack of communication from providers (except at renewal time) and time taken to resolve issues. It’s easy to see how these pain points align with lower customer perceptions of Fair Treatment, Certainty and Control.

Developments in smart tech and AI offer significant opportunities to elevate customer perceptions in these areas. Lemonade, a digital insurance business, was recently reported to have settled claims within a few seconds using AI. And we are already familiar with the way that telematics providers like insurethebox use data to reward customers for safe driving.

But what about taking relationships to the next level? If we hone in on the differences between experiences that contain nothing notable and those that deliver something positive, the biggest uplift is seen when the differentiating Forces – enhancing customers’ feelings of Status, Enjoyment and Belonging – are felt more strongly. And there are insurance brands that are already doing this well. Laka, which has won the Insurance Choice Awards for bike insurance for six years running, has a brand and service model that focuses on the particular needs of cyclists. Everything they do is built around the cycling community, creating shared values and a sense of belonging.

Even for everyday insurance products, removing frustrations with call centres and digital functionality can free up customer time and contribute to levels of Enjoyment. While digital solutions can help, they are not the whole story – human interaction still matters when it comes to building relationships.

The bottom line is that delivering a positive rather than ‘nothing notable’ experience has a commercial pay-off. Whereas only 48% of customers with a ‘nothing notable’ experience say they are likely to use the brand in future, 87% of customers feel that way after a positive experience.

Three things that insurance brands can be doing right now:

To find out more, you can reach out to Rebecca directly: rebecca.stephens@ipsos.com

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