3 Customer Experience Challenges within the Insurance Industry

A great customer experience is a major lever for success within the insurance industry. As a result, insurance companies are making strides to enhance their customer experience by developing digital services that make it easier and more convenient to purchase insurance, manage policies, submit and track claims, and more. Nonetheless, there are a number of challenges that insurers face.

Below, we highlight three customer experience challenges that insurance companies must overcome to succeed in today's competitive market.

What Customer Experience Challenges do Insurers Face? 

1) Developing an omnichannel sales process

Online shopping has changed consumer behavior and expectations. Today, people want to be able to research, explore, and purchase products and services across multiple channels including websites and apps. The same is true when it comes to the insurance industry where potential customers want the ability to research and purchase products and services online.

To be specific, a recent survey conducted by Accenture revealed that more than 50% of the insurance customers have a preference for using digital channels when looking for product information or updating personal information with their insurer. Not surprisingly, additional research has shown that smartphone traffic to auto, home, and life insurance websites has increased by 84% over the past two years.

To succeed in today’s market, insurers must continue to invest in building high-quality mobile apps and websites that enable potential customers to explore, research, and purchase their products and services.

Taking a cue from retailers, it is also pertinent for insurers to develop a fully digital and omnichannel sales process to create a customer experience that is consistent across all channels as well as designed for Millennials and Generation Z customers.

Insurers should also go further by ensuring that the process of buying insurance via a mobile app or website is completely fluid and straightforward. Having apps or websites that help potential customers to request estimates or sign up for automobile insurance, for example, in as few clicks as possible can go a long way towards boosting an insurer’s bottom line.

While digitizing the sales process is important, it is equally important for insurers to develop tools that allow customers to manage their insurance policies online.

2) Building apps and websites that enable customers to manage their policies

Customers today value the ability to manage their insurance policies across digital channels, primarily through mobile apps and websites. According to a survey conducted by Deloitte, 90% of life insurance customers want to manage their policies through digital channels.

While insurance companies are taking note of the importance of offering customers a great online customer experience, not all have managed to succeed. Only about 15% of customers are satisfied with the digital experience insurance companies actually offer.

New insurance startups or InsurTech companies are among those who have successfully managed to develop apps and websites that contribute to great customer experience. These newcomers have managed to create a fully digital customer experience that is actually exceeding customers’ expectations.

Other insurers such as All-State, Geico, and State Farm have succeeded in building mobile apps with a variety of functionalities designed to make life easier for their customers. All-State, for example, has developed camera functionalities that enable customers to submit claims with images of the damage to their vehicles.

The challenge for insurers is building mobile apps and websites that offer high-quality functionalities that enable customers to do more than just manage their policies, submit and track claims. Insurers need to develop apps and websites that make it easier for customers to communicate with an insurance representative or agent (human or chatbot), request roadside assistance, schedule repairs, update policies to reflect new purchases or changes in their personal life, and more.

A second challenge for insurers is creating mobile apps and websites that offer a great user experience that makes the process of managing insurance policies stress-free. Nonetheless, insurance companies can make major strides in their customer experience by developing the digital services today’s customers want.

3) Using IoT to improve personalization and business decisions

The insurance industry is getting smarter thanks to the incorporation of the Internet of Things (IoT) and connected devices. Today, IoT has the potential to give insures the ability to collect valuable data to provide customers with greater levels of personalization.

IoT can benefit insurers by providing them with the capacity to collect valuable customer data directly from their person, vechiles, and homes. This data can then be analyzed and exploited to provide valuable personalized advice to prevent accidents, the loss of property, and more.

Smart home devices or sensors in a car can capture and assess important information in order to  determine if there customers face signifiant risks. In these cases, insurers can use this data and send notifications to customers to help them avoid any potential damage from an approaching storm or warn them about dangerous driving tendencies or conditions.

In healthcare, connected devices like wearables can monitor a customer’s vital signs and inform them when there is a significant risk of a heart attack, stroke, and more. Insurers have even implemented programs that use data from wearables to reward customers for exercising in an effort to help customers live healthier lives. 

IoT devices are also being used by insurers to lower premiums. A number of insurers have used connected devices to monitor customer driving behavior. By using this data, insurers can effectively send notifications to their customers to encourage healthier and less risky behavior. At the same time, insurers can reward safe drivers with lower premiums. Both of these efforts by insurance companies are expected to be able to reduce the costs of premiums.

More importantly, IoT data has the potential to help insurers process claims fasters. Insurers have struggled historically with processing claims, which can contribute to positive or negative customer experience. In fact, one of the biggest reasons for the high customer churn rate in the insurance industry is an inefficient claims process.

By extracting the data from IoT or connected devices, insurers gain the ability to process claims faster and with greater accuracy. This can save a lot of time for insurers and customers, and make processing claims much more efficient.

While IoT and connected devices can help improve the overall customer experience within the insurance industry, challenges do exist that insurers must overcome. One of the major challenges for insurers will be their ability to take advantage of the data from IoT and other connected devices. 

Using any data from IoT requires insurers to put systems or applications in place that can securely and reliably capture and analyze data. From programs need to be implemented that use the data to make important business decisions. 

Furthermore, insurers must enhance their security protocols to guarantee that IoT data is protected, especially while data is being transferred from the customer to the insurer. This is is easier said than done given the many security vulnerabilities that IoT currently has. Nonetheless, failing to protect customers’ IoT data will outweigh any benefits that IoT and wearables can create for insurance companies.

Improving the Customer Experience via QA Testing

Enhancing the customer experience is a major challenge for insurers. To overcome this challenge, insurers are implementing digital transformation and developing digital services to better meet the market's needs and expectations.

To succeed in these efforts, it is vital insurers to plan and execute robust Quality Assurance (QA) testing campaigns.

QA testing is essential to the overall success and return on investment of any mobile app, website, connected device, or any other digital service. QA test campaigns enable brands to uncover anomalies or bugs that can block functionalities, interfere with customer pathways, or create a disappointing customer experience.

In light of the efforts being made by insurers to improve the customer experience, QA testing will play a key role in their ability to deliver great digital services to their customers.

To learn more about QA testing, please do not hesitate to download our white paper below.