Digitally native disruptors have entered the insurance space. Companies like Tesla, Amazon, and Google’s sister company Verily — as well as digital startups who have the ability to move at lightning speed — are adding extra competition to the industry. This means customer loyalty is more important than ever: just a 5% increase in customer retention results in nearly a 30% increase in revenue.
So, how can established insurers improve customer loyalty? David Butler, SVP of Product and Strategy, says they must bear in mind three principles: empathy, investment, and risk. These are crucial for enhancing customer experience (CX) and cultivating loyalty. Let’s look at each of these factors.
To start off, insurers need a genuine desire to forge remarkable customer experiences, and this means embracing empathy. While AI and bots certainly have a growing role in modern business, the human touch, marked by empathy and expertise, remains pivotal in nurturing customer connections and fostering brand allegiance. Empathy isn't something an app can fully deliver. By meticulously shaping your customer experience, you signal to your customers that you're genuinely invested in how they perceive their interactions.
Insurance companies who've really nailed down the art of understanding their customers' journey have heavily invested in their data systems. They've realized that understanding what’s happening with customers and the employees on the front lines at every step is the name of the game. And guess what? They're scooping up all those juicy bits of info from these interactions, just like a data detective, to learn from it and figure out when they should step in and make things personal. This kind of investment is also the ticket to bringing in the big guns of AI into the mix (picture AI that can spot problems all on its own).
AI is getting increasingly sophisticated, but relying solely on this technology poses risks. In the insurance realm, a misdirected text could carry grave compliance and risk implications. Plus, the introduction of bias in chatbot responses could expose institutions to legal complications. That's why the smart money's on using AI more as a sidekick for the human agents – the superheroes of risk and compliance. When insurers blend their data know-how with visual engagement technology and AI smarts, they can transform their service reps into customer champions — and that’s the secret sauce to building loyalty.
Traditional insurance companies are at a pivotal crossroads. To remain relevant and competitive, they must masterfully navigate the shifting currents. This journey to elevate their game is marked by the three guiding principles outlined above, which leads to better customer experiences and nurtures loyalty.
Want to learn more about these principles? Click the link below to download your copy of our report, made in partnership with Digital Insurance.
Download the report: Digital insurance depends on human interaction to drive loyalty