Today’s most successful companies build their entire business around the customer. And for the customer, experience is the single most important factor determining loyalty. According to The State of Connected Customer report, 84% of customers say the experience a company provides is as important as its products or services—and yet, there is a massive divide between customer expectations and what most businesses are actually delivering.

This is also the case with modern insurance companies. For many decades, insurance customers viewed insurance as a commodity product they had to purchase based on what was available. But over the past decade, the market has become saturated with more insurance products and different options, creating a more sophisticated buyer with a large range in needs and wants. To meet these changing needs, insurers need to be nimbler, work faster, and make delivering a superior customer experience (CX) their top priority.

Insurance industry begins the move to a customer centric model

The insurance industry has begun shifting to a consumer-centric model focusing on CX. Eighty-five percent of insurers use CX initiatives throughout the customer journey, and 90% have a C-suite position dedicated to the consumer experience, such as a Chief CX or Chief Customer Officer (CCO).

Other positive changes adopted by many insurers in recent years include:

• Adding new channels to communicate with customers for policy questions and claims.
• Changing language in documents and communications to use less insurance jargon.
• Offering hybrid experiences (human and artificial intelligence, physical and virtual, direct and agent-based).
• Engaging with customers daily or throughout the year instead of only at renewal time.

But as a recent report from the IBM Institute of Business Value (IBV) revealed, 42% of customers don’t fully trust their insurer, and most insurers (60%) agree that their organization lacks a CX strategy. This leaves the industry with significant room for improvement.

4 ways insurance companies can improve CX through technology:

Demonstrate the value of customer-shared data

Improving insurance CX through technology largely depends on having accurate data (in as close to real-time as possible) to properly address needs and challenges. As the backbone of their CX initiatives, insurers should focus on gathering data throughout all client-related processes, including purchasing, renewals and claims. With access to the right data at the right time, insurers can create more personalized insurance policies and experiences even when the interaction is digital. This in turn increases trust and the likelihood customers will voluntarily share more data in the future.

In addition to communicating the benefits of sharing both consumer and insurance-related data and providing transparency for how the data is used, insurers should specifically invite customers to share data across all interactions, and make it as easy as possible for them to do so. For instance, customers are more likely to share additional information if they aren’t required to repeat something they provided in the past. By pre-filling information already obtained, you can focus on deepening the understanding of your customer by asking net new data.

The data already available in-house can also be mined and enriched through open data platforms and customer-centric analytics, to generate insights, analyze patterns and behaviors, and understand buyer’s values and triggers, etc.

Lastly, leveraging research methodologies as part of an experience design, and creating feedback options to gather real-time sentiment at key decision points throughout the insurance journey is also key to data gathering, and building the most accurate understanding of a customer.

Increase the use of AI throughout the process end-to-end

Infusing AI throughout the insurance customer journey can significantly increase customer satisfaction and retention, according to the IBV report. By starting with deep industry expertise and AI-based tools, companies will benefit from increased speed, accuracy and efficiency. Further, the increased productivity opens up more time for insurers to develop the personal connections customers are looking for when making insurance decisions.

A case in point is the IFFCO Tokio General Insurance Company, which needed to improve its claim processes after learning that up to 30% of its customers were not satisfied with the assessment of their claims. The insurer implemented an AI-based Claim Damage Assessment Tool (CDAT) that uses advanced computer vision and deep neural network-based techniques to assess vehicle damage from images customers upload using an app. By using AI, IFFCO Tokio General customer claims were settled from beginning to end in 15 minutes instead of 3 to 4 hours, and processing costs decreased by 30%.

Create intelligent workflows for both the agent and the policyholder

Insurers are starting to recognize the value of redesigning their systems and processes, and building intelligent workflows that pair data with AI, straight through procession, automation, etc. to embed exponential technology at every step of the process. Integrating functions across organizational boundaries empowers employees and allows customers to feel known, be served faster, and get instant policy refunds or claim payouts Further, automating and integrating tasks can result in innovative ideas that convert into business value.

Touchless claims processing is an example of an innovative way of handling a claim from first notice of loss (FNOL) through to settlement with limited to no human interference. The bottom-line potential of fully automated claims in commercial auto insurance is especially valuable. Because claims and losses are so high in this market, improving operational efficiencies and connecting businesses (repair shops, rental cars, tow trucks, etc.) from end-to-end is one of the most viable ways to gain profitability and streamline the experience for customers.

Use an omnichannel approach to interact with customers

Insurers should focus on integrating their systems and platforms to create the ability for agents to have seamless conversations across multiple channels with customers. For example, a customer service agent on the telephone would be notified that the customer they’re talking to just requested a quote on a life insurance policy a few minutes ago directly through the website, and can seamlessly modify that quote, send it back by text with personalized options for the customer to finalize on their mobile while getting the right advice from the live agent.

Additionally, according to the IBV report insurers should prioritize personalized digital communications, which 50% of customers ranked as a high priority – but only 17% of insurers reported using. Currently, insurers primarily rely on telephone (51%) and traditional mail (50%) to communicate with customers. These methods are expensive and create disjointed interactions. Customers are increasingly looking to interact using digital channels, such as through a company’s website.

By focusing on digitally transforming the front office and developing an omnichannel approach, insurers can improve customer engagement and save money. That said, adding more communication channels can cause unintended effects. For example, OP Financial, one of Finland’s largest financial services companies, added an online chat feature to its new website providing insurance advice. Adding this new feature increased users by 1,000% within months, leading customers to experience high wait times, especially during winter storms. By furthering their omnichannel strategy to include an AI-based chat bot that supplements the live human interaction, OP Financial was able to reduce customer wait times while also meeting the demand for their new online chat feature. Adding new channels requires the right level of testing, piloting, and orchestration with the other channels.

The CX advantage for insurance

Using data to create personalized experiences, embedding AI throughout the customer journey, introducing intelligent workflows, and meeting customers at the right time on the right channels with a personalized message or content allows insurance companies to move beyond a transactional relationship with their policyholders. Designing products and services around the customer experience helps turns insurers into trusted advisors that will drive customer loyalty and ultimately, purchasing decisions.

How does your insurance company stack up in terms of CX? Take the assessment and find out.