KPMG: COVID-19: customer and digitisation in insurance
Executive summary :
Who hasn’t asked at some point, “How will this pandemic affect me and my family? How will it affect our lives? Our jobs, education, graduation, birthdays, anniversaries, vacations, social lives…?” And then: “Our finances? Savings? Retirement?” To ultimately wonder, “Are we sufficiently prepared to get through this? Do we have the protection we may need?”
Insurance is fundamentally about protection. And while it cannot protect students from finishing their studies from home, without a proper graduation, insurance can protect against many of the financial impacts caused by the pandemic: travel insurance, health insurance, business interruption insurance, workers’ compensation (WC), paid sick leave, life insurance, hospital indemnity, and disability, to name a few, are all types of policies that may provide relevant protection.
In some cases, to have adequate protection, certain terms needed to be revised; for example the use of personal cars for commercial delivery, use of personal residences for WFH (work from home), or location of work for WC. Given the overall impacts to the economy, many carriers have also adjusted the payment terms around timing of payment, late fees and cancellation for non-payment even partial return of premium for reduced use (e.g. auto premiums).
Customers forced to go direct
Unsurprisingly, one of the outcomes of COVID-19 has been an enormous increase in customers contacting their insurer. With the in-person channel removed, and while some degree of patience has been needed as insurers learned to cope with volumes, companies sought to leverage the online channel, updated FAQs and conducted proactive outbound communication (mainly email) to reserve the phone for urgent claims. For most insurers, service standards thus remained at an acceptable level.
Six pillars of customer experience
Have insurers done enough? KPMG’s Six Pillars of Customer Experience – derived from ten years of primary research across 3,000 brands in 26 countries – identify the key universal principles that underpin successful customer relationships. These are:
Integrity: doing the right thing, being seen to act fairly and in the customer’s best interests
Resolution: responding to needs and finding solutions
Expectations: setting, managing and meeting expectations
Time and Effort: making it easy for customers to access information and get essentials
Personalisation: understanding the customer’s individual circumstances
Empathy: showing that you care, choosing the right emotional response.
The two pillars that are most important to specifically address in these uncertain times are integrity and empathy.
COVID may unlock closer relationships with insurers
How well customers feel their insurers have supported them through COVID-19 cannot be known; in the absence of any comprehensive independent research as yet. The COVID-19 surge aside, by the nature of insurance, routine customer contact is less frequent than in other areas of financial services or sectors such as retail or consumer goods, so the industry already has a relationship deficit to overcome. On average, insurers simply aren’t as close to their customers as organisations in other sectors which, by definition, have more frequent touchpoints or interactions.
However, COVID-19 might just prove to be the catalyst for innovation in insurance, unlocking greater levels of customer experience and personalisation that has long been overdue.
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