Open insurance and its role in CX's evolution

6th Feb 2023

But it’s not as simple as out with the old and in with the new 

Like with the increase of Open Banking, the insurance industry is having to follow suit with the customer at the forefront demanding greater options and a range of services. Because insurance companies that focus more on CX, are able to realize twice the growth of CX laggards. This is no quick fix method for CX though. Chris Devey, Customer Director, BGL Insurance draws on the company’s 30 years of insurance industry experience to share advice on how to remain at the top of the CX game for a prolonged period. A pioneering data-drive attitude to CX with steady adjustments, blended with a culture lead by the customers, will allow insurance organisations to stay on top of the ever-changing expectations of their customers, and provide an experience which is above and beyond their expectations. 

The insurance industry experienced a huge rise in demand during the pandemic, at the same time insurance businesses themselves had to react fast with applying substantial business changes, resulting in difficulties when delivering on CX and fulfilling customer needs. This demand has not gone yet, but the industry needs to develop more flexible CX strategies for businesses. 

New customers for old, customer retention and strategies for improving CX

A more personalised CX is expected by the new tech-native customers who are already more willing to share personal data and are accustomed to using smart devices for everyday interactions. For example, they expect motor insurance apps allowing them to see their driving performance and be rewarded for good driving. Immediate resolution is now the norm following the rise customer expectations due to the developments in digitisation.

The insurance industry has had to re-focus on the true meaning of customer retention, following new Financial Conduct Authority (FCA) rules on price walking and endless premium hikes on loyal customers. As this ‘new’ revenue stream is diminished, insurance providers are starting to concentrate on ways to attract and retain customers. 

In an ever-evolving world, one-time solutions are not going to be good enough when it comes to customer expectations. Maintaining ongoing CX excellence is so important for businesses CX strategies. 

A recent EY 2022 Global Insurance Outlook found that insurers know they need to enhance CX, and thankfully, are making it a top priory. It was found that 62 per cent of CEOs at insurance businesses saw changing customer expectations as a top trend affecting the insurance industry. 

The report identifies three main CX capabilities that are reorientating competition within the industry. These are: for insurers to meaningfully engage with more customers, offer experiences which are ready to go, holistic and personalised, and finally, gaining, monitoring and using a range of data signals more successfully.

Being reactive is outdated, being proactive is the way forward for CX strategies

Some businesses approach CX based on what they think customers want, rather than acting on genuine insight. This often leads to prioritisation of business outcomes over CX in process optimisation, such as switching to email communications during the pandemic, when what customers really needed was instant reassurance through online chats.

Several old CX strategies are also purely reactive. Action is not taken until after a problem has occurred, such as after a customer falls behind on a payment, or misses a deadline, allowing disruption to the journey. A data-driven approach would enable the business to be proactive, building customer approval.

Businesses also typically make ‘grand gesture’ changes to improve CX, such as loyalty programmes, or introducing new channels. These often take extensive planning and have long implementation processes, meaning they aren’t always reflective of current customer needs by the time they are introduced – sometimes more than 12 months after the original idea.

Data and the customers lead the way for the new strategies

As the dust settles on the initial CX shocks, revolutionary change may not be the best tool for tackling the nuances of complex customer expectations. Businesses should implement change based on data to ensure more customer-led processes.

The action plan: it’s incremental

The use of feedback from NPS surveys, helps to action what customers truly want – such as BGL Insurance offering virtual assistance and online chats after customers said they needed quicker responses during the pandemic. We also use panels that track pain points within the customer journey, in real-time, so organisations can upgrade CX where it is needed most and can offer proactive assistance to solve an issue before it occurs.

Implementing incremental change is the CX game changer – businesses should develop a test-and-learn approach whereby changes are regularly made, based on real-time customer data in a continual cycle of process optimisation. This approach provides businesses with the agility to react quickly to market changes and enables them to run trials side-by-side to see what works best – in a process of continuous experimentation. Businesses should develop the mindset of ‘it is better to try something that might not work, rather than not doing anything at all’.

Data Ecosystems and open insurance, be ready for them! 

In today’s fast-changing digital world, businesses cannot afford to be complacent and stick to legacy CX strategies. 

Open Insurance, much like the approach to Open Banking, is the future of insurance as the EY Outlook referenced earlier states: “Across all lines of business, there is increased demand for more affordable, transparent and customised insurance that better suits evolving conditions and can be easily adjusted as the needs change.”

Apps and online portals are the way forward for insurance CX, as they make information accessible on demand, anytime and anywhere. Joining together the insurance ecosystem gives providers access to existing customer data. This increases the ease of adding extra services without having the ordeal of inputting personal information again for each new service – greatly reducing customer effort. EY market experience found that successful ecosystem owners have been able to increase their products per customer from 1.5 to 2.5-3.0 within 24-36 months, confirming the pay-off is worth it.

Insurance businesses need to evolve along with the customer demands and the world

Questions such as, “What’s a more productive way of doing this?” and “How can we provide better value for money for our paying customers?” should be on the lips of all insurance businesses to ensure the CX is the best it possibility can be. With customer demands constantly shifting, a steady implementation strategy and flow of ideas to enhance for CX allows for manoeuvrability to react to customer needs and market shifts. The business decisions are made by the insurers based on data, customer feedback and advancements in technology – but the customer should be the utmost priority when it comes to CX strategy changes.


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