Poor Insurance Customer Experience May Drive Away Customers - Capgemini Report

Capgemini’s 2013 World Insurance Report (WIR) presents some optimistic findings but shows insurers’ ability to retain customers is threatened by poor customer experience. The report suggests that carriers’ best chance to make an impact lies with mobile and social media.

Only 30 percent of customers reported a positive experience with their insurer, according to the findings of the report, based on 16,500 customer surveys, research data from 41 markets, and interviews with 114 insurance executives. The WIR found that nearly two out of three customers are at risk of retention with only a neutral and/or negative customer experience.

“When customers have neutral or negative experiences with an insurer, opportunities are created for insurers to court other carrier’s customers, and customers may switch even for minimal extra benefits,” comments Jean Lassignardie, Chief Sales and Marketing Officer, Capgemini Global Financial Services. “Even in the US, the country with the highest customer experience ratings, insurers still face a risk of retention rate of 50 percent meaning no one is immune.”

In day-to-day operations, P&C companies in the 14 countries studied by the WIR showed continued focus on improving the core drivers of underwriting performance. Many captured benefits from enhancing productivity and reducing distribution costs, resulting in better underwriting ratios for some companies, particularly in the U.K. and continental Europe. However, U.S., Australian and Japanese companies were hit hard by economic losses tied to natural disasters, which totaled US$370 billion in 2011. The WIR also reported that acquisition costs remain stubbornly high for many insurers.

Jean: The innovation of mobile has accelerated, all kinds of mobile, phone, tablets, allowing a customer to operate and act in an anytime/anyplace/any condition. Plus the social buzz? That allow customer interact in the famous crowd phenomenon. And having more and more things digital and accessible by mobile device and being able to be discussed in the crowd.

This year’s WIR included the consulting firm’s newly developed Customer Experience Index (CEI), designed to provide a granular view of customers’ perceptions of the quality of service interactions across products, networks/channels and customer lifecycle. Capgemini says that the CEI is built from data captured through the consultant’s Voice of the Customer Survey, conducted in 2012. In addition to querying16,500 customers on their general satisfaction with their insurer, it also inquired more specifically about the importance of specific channels for executing different types of transactions, and for different types of products. The survey questioned customers about their satisfaction with all those interactions. The responses, ordered along the axes of product, channel and lifecycle produced 96 data points.

The WIR found that 50% of insurers are making mobile and social media a priority over the next two years to strengthen the Customer Experience. However, the report also found that those channels will need to be tightly integrated and provide seamless transitions across all channels to be effective.

“What we are seeing is an inflection point in insurers’ mobile efforts, sort of exponential, sudden acceleration after having grown at a reasonable pace,” comment Lassignardie. “Mobile allows customers to operate in an anytime/anywhere condition, and social media adds the ability to act in a crowd phenomenon. The WIR’s findings suggest that these two technology areas will be in the forefront of retention and getting new customers and products on board to improve the top line.”

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio