How insurers are improving customer retention – IBM
Article Synopsis :
Customer retention is a major challenge for all insurers. Industry-wide, customer ‘churn’ ranks third behind only fraud and claims leakage in terms or profitability impairment.
In “How connected insurers are improving customer retention”, IBM’s Institute for Business Value shares findings of a survey conducted with 12,000 insurance consumers across 24 countries focused on insurance relationships, value preferences and switching behaviours.
One of the key findings is that satisfied insurance customers are six-times less likely to change insurers. To this end, the report recommends retention strategies centered around three courses of action:
1. Know your customers better
- Understand the values and behaviours of your customers
- Enter into active dialogues to establish meaningful relationships
- Build an environment where sharing data creates mutual benefits for customer and insurer alike
2. Offer customer value
- Support your customers in areas they personally value
- Add risk mitigation or prevention into your products and services
- Personalize offerings and provide pick-and-choose product options
3. Fully engage your customers across access points
- Embrace mobile to enable constant access for your customers
- Support decision making throughout each step of the sales process for customer convenience
- Have information available anytime, anywhere to support instant fulfillment of client requests
The report identifies a set of questions carriers can ask themselves to ascertain the degree to which they’re truly capturing the hearts and minds of their customers:
- How are we using our in-house sources of customer knowledge? In what ways are we gathering and adding external information, such as that from social networks? How are we combining internal and external information? How is it used to generate greater customer value and loyalty?
- Where and how are we using needs-based or persona-based segmentation approaches? How are we deepening our level of understanding of individual customers?
- To what degree can our customers pick and choose options from our product portfolio? What is our plan to remove the barriers to further customization?
- How do we communicate with our customers? What is our approach to stay abreast of the ways they prefer to communicate, now and in the future?
- In what ways are we engaging millennials? And how will we stay updated to address the customers of the future, such as Generation Z and beyond?
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Digital Insurer's CommentsThe personal touch has always been a differentiator in insurance. This report reminds us the digital imperative is about using technology to create the personal touch with consumers increasingly digital by the day.
The vast majority of insurance technology (and talent) is geared to transaction processing in the back- and mid-office. Valuable as these assets are for their ability to compute, they’re not very good at understanding much less communicating with customers.
Insurers boldly blending the old with the new to create the next generation customer experience will be better positioned to acquire, engage and retain clients, outperforming peers in revenue growth and profitability.
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