While cost is an important consideration when choosing insurance, low prices alone won't win or retain customers. In fact, the J.D. Power and Associates 2010 U.S. Insurance Shopping Study found that 10 percent of auto insurance shoppers did not select the lowest price quote they received, foregoing considerable savings. Rather, insurance customers are placing a high importance on the overall shopping experience — from policy pricing and product features to agent recommendations and convenience. For this reason, savvy insurers are responding to customers by leveraging technology to improve the overall shopping experience.
Payment delivery and customer service remain at the forefront of any good insurance providers' requirements. Customers expect excellence and convenience in these areas, whether paying premiums or having claims resolved in a timely fashion.
The internet, in particular, is becoming a powerful tool for insurers to reach their customers and improve the overall experience. Though the phone historically has been the most popular research tool for home insurance customers, according to Forrester Research, that is clearly changing. More than half of Generation Y shoppers have already used insurers' websites to gather information when shopping for auto and home insurance policies, compared with 46 percent of Baby Boomer shoppers, J.D. Power and Associates reports.
What's more, Generation Y shoppers are far more likely than Baby Boomers to obtain quotes from an insurer's website (48 percent versus 28 percent). At more than 70 million strong, Generation Y will have a dramatic impact on the insurance landscape in the years ahead, and Baby Boomers will need to adapt to a new and digital environment.
Today's shoppers are choosing insurers based on service convenience via a website, centralized call center, local agent, or a combination of all three. No longer can insurers count on local agents to meet the needs of all customers. In fact, Forrester Research reports that 37 percent of home insurance shoppers now cross channels between research and application, and Baby Boomers are no exception.
This preference for choice extends to bill payment. While a slim majority of insurance customers (54 percent) still mail paper checks, insurers are seeing increased adoption of online bill presentation and payment — and most are working to develop comprehensive plans to further adoption. Customers want the ability to pay from any location using their preferred payment type — check, cash, card or ACH.
Many may opt for electronic bill presentation and payment, where insurance providers can e-mail premiums directly to customers email inbox, providing a convenient and cost-effective way of delivering bills. Additionally, this reduces costs associated with printing and mailing paper bills. And, according to Striata, a leading global e-documents, e-billing and e-marketing software application developer and services specialist, e-billing can reduce day sales outsourcing by as much as 70 percent, putting insurers in the driver's seat with more daily investable cash than before.
There is no question that busy consumers have high expectations from their insurance companies and the technologies that support them. Investments in advanced technology will help insurers meet consumer demands by providing the tools necessary to improve the insurance buying process.
About the Author: A 15-year financial-services veteran, Mike Tallitsch is vice president of corporate solutions for WAUSAU Financial Systems, a provider of payment and receivables processing solutions to help businesses move money faster. He can be reached at [email protected].