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The insurance industry has two main opportunities to create a winning customer experience (CX): during the initial sales and onboarding process and during the claims process. A great CX at the point of sale can ensure the customer converts and creates a positive first impression. Meanwhile, a great CX during the claims filing process cements that positive impression and ensures customer retention.

In this blog post, we’ll explore the different ways that insurance companies can ensure their policyholders have a seamless, efficient, and unforgettable insurance experience.

CX in Insurance Sales

Purchasing insurance is not something people do every day. But once customers commit to an insurance provider, it will be a while before they consider switching. That’s why each sales opportunity must be approached like the deal of a lifetime; closing it successfully means the insurer can count on receiving insurance premiums for many years.

Indeed, the opportunity is great for those insurers who make the most of it. Consumer confidence is down since the coronavirus crisis hit, but financial worries haven’t dampened consumers’ interest in expanding their insurance coverage. In fact, one Lightico study found that 21% of U.S. consumers are currently looking for new auto or home insurance.

At the same time, this great opportunity is often squandered by excessive friction in the sales and onboarding process. Fancy advertising campaigns, word of mouth, and brand reputation aren’t enough to close deals if the insurance onboarding process is too slow or difficult.

Studies show that the tide is steadily turning in favor of remote insurance sales, and away from traditional face-to-face sales. According to a McKinsey study conducted in January 2020, about 90% of insurance agents’ sales conversations were conducted in person. In a follow-up survey in May, less than 5% of agents had any in-person sales conversations.

This represents a dramatic shift in sales behavior. Insurance companies, who were long accustomed to conducting in-person sales, had to quickly adapt to a different selling model due to COVID-19. Whatever inertia, comfort, or embedded procedures that kept insurance agents from going fully digital became irrelevant once the virus hit. Digitization was effectively forced upon the insurance industry by unprecedented yet temporary circumstances. Is a fully digitized insurance sales process a mere stopgap, or the future? Recent surveys suggest the latter.

The 2020 Independent Agent Survey, developed jointly by the National Association of Professional Insurance Agents and ALM Intelligence, found that 83.4% of agents feel that it’s moderately to extremely important to deliver insurance products digitally.

A Lightico survey found that interest in digitized insurance processes was high on the customer side, too. In fact, 66% of policyholders say they are more inclined to try a new digital app or website than they were prior to the crisis. A similar percentage report having less patience for filling out and sending paperwork. And 76% think digital will be a lasting trend even after the coronavirus is defeated.

Yet between the desire for digitization and the actual implementation of a seamless digital process, there often lies a gap. Here are some of the immediate changes carriers can look forward to when digitizing and improving the customer experience of their insurance sales cycles:

  • More sales: Agents can reach more prospective customers when they cut out the drive to sales meetings.
  • Better sales outcomes: Agents can have prospective customers fill out policy applications and sign via smartphone while still on the sales call with them. Instant and effortless sales processes lower the purchasing barriers.
  • Maximized agent talent: Agents can spend less of their time processing mindless paperwork, and more time selling and advising.
  • More future business: Happy customers are more likely to recommend their insurer to friends or family. Word-of-mouth referrals account for 20% to 50% of all purchasing decisions.

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CX in Insurance Claims Filing

The emotional and financial hit of a damaged home or car is hard enough. The last thing claimants need is for their insurance company to be yet another source of stress. Protracted FNOL insurance processes, back-and-forths with the insurance company, and not-in-good-order (NIGO) documents that have to be redone all exacerbate the difficulty of the situation.

Optimized mobile interfaces can be an antidote to all this, boosting customer satisfaction as measured by net promoter score (NPS). Far from a fuzzy metric, NPS has a direct impact on insurance companies’ bottom line.

Bain research found that a promoter is potentially worth five times more than a detractor in lifetime value. This is mostly thanks to better retention, which means premiums are paid for more years. For example, in car insurance, 44% of all promoters stay with their insurer for longer than 6 years, compared with a mere 27% of detractors.

On the flip side, negative insurance claim processes are a one-way ticket to churn. According to Accenture, 83% of respondents who reported dissatisfaction with the way their claim was handled said they had switched or planned to switch to another insurer.

Remember that P&C policyholders rarely make claims, so insurance companies have limited opportunities to make or break customer loyalty. In other words, policyholders generally stick with their insurance provider — unless they’re given a reason not to.

Amazingly, a survey of 8,000 auto and home insurance customers across 14 countries found that 41% of policyholders who had submitted a claim were likely to switch insurers within the next 12 months. Rather than cementing customers’ loyalty, the claims process too often alienates customers and leads them to seek greener pastures.

Customer satisfaction and retention is perhaps the most important reason to optimize customer-facing processes for smartphones. But it’s far from the only one.

An insufficiently mobile claims process is notoriously slow. Chasing customers to complete paper forms or PDFs and dealing with the back-and-forth of error-laden forms prolongs the final settlement.

It’s also costly — studies show that reworking a claim costs $25, in addition to all the manpower hours needed. This can add up to thousands of dollars a month.

Legacy processes are often kept because they are perceived as the compliant and safe option. While the fear is understandable given the repercussions for failing to stay compliant, mobile claims can help enforce compliance without extra paperwork or face-to-face communication. Next-generation eSignatures and eForms are timestamped, tamperproof, and sync with insurance companies’ existing CRMs, making it easy to securely store and retrieve sensitive customer data.

Finally, a mobile claims process doesn’t just improve efficiencies and ensure retention of existing policyholders: It can actually help generate new business without spending a dime on marketing. How?

Word-of-mouth referrals account for 20% to 50% of all purchasing decisions, according to McKinsey. Referrals are both an extremely effective and cost-effective way of generating new business. Among consumers who reported a positive customer experience with an insurer in the last year, 44% say they told friends and family about it. But all those glowing referrals won’t happen unless existing customers are happy.

Digital CX is Great CX

In today’s digital world, a digital customer experience is equivalent to a great customer experience. Customers are more time-pressed, impatient, and saturated with competing data from all areas of their lives than ever before. Insurers who care about their net promoter score (NPS) and everything that stands behind it should consider digitizing all customer-facing insurance processes.

Lightico’s eSignature solution for insurers is designed for CX-minded insurers and importantly also includes eForms, digital documents, digital evidence collection, and automatic ID verification. This end-to-end platform allows both the new customer onboarding process and claims filing process to be streamlined, digital, and wholly customer-centric. Learn more at Lightico.com.

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