Insurance premiums are rising due to inflation, which typically drives down policyholder satisfaction – and 2022 is no exception. Overall satisfaction with the industry has dropped, erasing gains from investments in the digital customer experience.
Insurers haven’t seen a large amount of customer churn – yet. Can insurers recover their gains in customer satisfaction before their policyholders begin to decamp?
The data: premiums are up, but no churn yet
Average P&C insurance rates increased 4.25% in the last quarter of 2021, which represents a moderate increase across the board – but there are outliers. Small and medium-sized businesses saw their premiums increase 6.3% and 10.6% respectively. Meanwhile, some individual policyholders, such as those who live in new wildfire corridors, saw their premiums jump up to 40%.
No one likes it when prices go up, so one would expect policyholder churn to increase alongside increases in price. This hasn’t happened yet. Although customer satisfaction with the insurance shopping and onboarding process has decreased 16 points over the last 12 months, only 21% of policyholders ended up churning.
Lack of customer churn is good news and bad news
The only reason why more policyholders haven’t decamped for new insurers is because premiums are high everywhere. Even though many consumers are looking for competitive rates, they’re not finding many alternatives at the moment.
Here’s the bad news: there is now pent-up demand for lower premiums. In other words, some policyholders may churn as soon as prices go down. Meanwhile, if any one insurer figures out how to lower their rates for any reason, they’ll have an immediate competitive advantage.
The silver lining here is that insurers still have some time before premiums begin to drop. This gives them the opportunity to recapture their customer experience gains and and increase policyholder retention before it’s too late.
Where should insurers invest in customer experience?
Insurers have already invested a great deal of effort into making the shopping and onboarding experience easier for consumers. It once took days to find quotes, comparison shop, and purchase a policy – now it just takes a few minutes. This process can still be optimized, but there may be quicker wins.
Onboarding is just one of two major touchpoints for insurers, however, with claims representing the other. In addition, the claims process is at a five-year low in terms of customer satisfaction. There are a few reasons for this:
- Shortages of personnel made it harder for insurers to process claims
- Digital tools didn’t work as expected, requiring human intervention
- Low adoption of digital tools on the policyholder side
In other words, insurers can get a lot more bang-for-buck by devoting their attention to the claims process. There are a lot more things to fix.
One other thing to consider: a policyholder that’s disgruntled by higher premiums will be much more likely to churn if they also have a bad claims experience. Meanwhile, a disgruntled policyholder might yet be retained via an exceptionally good claims experience. Insures have an opportunity to recapture a lot of potential churn.
How can insurers optimize the claims experience to prevent churn?
Insurers have some top-line goals to improve the claims experience:
- Increase automation to compensate for worker shortages
- Invest in low-touch digital tools, decreasing manual intervention
- Make customer-facing digital tools easier or more appealing to work with
How can insurers accomplish these milestones?
Shift Technology offers a variety of tools that help insurers improve both the backend and frontend of the claims experience. In fact, our Shift Claims Intake Decisions solution is designed to help insurers build an entire new web interface for claims that can then be white-labeled with the organization’s branding. (We can also work with your existing frontend while building a new backend with improved processes.)
Artificial intelligence and automation represents the underpinning of all our solutions, and it helps insurers assist their human employees by enabling them to make better decisions that can improve the customer experience. Here’s just one example:
Customer use digital for FNOL – but they want to speak to a person afterwards
One thing that we find with our approach is that policyholders often pursue a hybrid digital journey when they file claims. They’re happy to use the digital frontend to submit their policy documents once an incident occurs, but they want to speak to a representative once it’s time to check the status of their claim or offer additional information.
This has led to some bad experiences. Frontline CSRs often don’t have the training or resources to assist with claims. So, first the policyholder speaks to the CSR and gives their information, then they get forwarded to a claims adjuster and wait on hold, and then they have to give their information again. No one wants to spend an hour on the phone repeating themselves, so this counts as a bad customer experience.
Where Shift makes a difference is that we bring the claims information and decisioning tools forward to the customer service layer. As soon as the representative picks up the phone, they have all the policyholder’s information at their fingertips. There’s no call forwarding necessary. If a decision needs to be made, the AI solution can provide representatives with a recommended action, such as sending a simpler claim to straight-through processing.
Here, the claim gets resolved quickly, with the first person that the policyholder speaks to, and with a minimum time spent waiting. That’s a good experience!
By investing in the claims process, insurers can retain customers who might otherwise churn. By working with Shift, insurers can make sure that policyholders have good experiences even during a very stressful time in their lives. This means that even if premium rates don’t fall anytime soon, policyholders will still have a reason to stick around.
For more information on Shift Technology and how our claims decisioning solutions help contribute to customer satisfaction, request a demo today.
