Insurance CX: Data-Driven Communications Key to Mitigating Financial Losses & Improving Customer Relationships within the contact centre as Content Guru explains.
Despite being a sector running some of the largest contact centres in the world, the insurance industry has failed to meet growing customer expectations. January’s UK Customer Satisfaction Index (UKCSI), the latest bi-annual report by the Institute of Customer Service, showed that customer sentiment in the insurance sector is at its lowest since 2015.
With year-on-year insurance premiums rising in some categories by almost 20%, and insurers unable to win over customers with attractively cheap quotes, the priority has shifted towards competing for customer experience (CX). It’s no longer enough for insurers to accept radio silence from customers not looking to claim but instead react proactively to meet the customer where they are.
Embracing technology and data-driven insights could be the key for insurers looking to proactively communicate with customers throughout their policy, fostering brand loyalty and ensuring smoother claims processes should the need arise. Here are three of the most important areas where new connected devices and proactive communications technology are transforming the insurance industry.
Data-Driven Risk Assessments
Wearable devices and health trackers play an important role in supporting people with their health goals. Previously, life and health insurers calculated premiums by using basic physiological data, such as height, weight, and smoker status to assess mortality risk. Now, Internet of Things (IoT) devices can leverage a vast range of outputs, such as activity levels and sleep metrics, as well as a variety of health measurements such as heart rate, blood oxygen levels, and blood pressure. This rich, granular information can enable personalised life insurance policies to be written, based on an individual’s lifestyle, with health metrics used as additional inputs to continuously assess a person’s mortality risk.
Personalised underwriting, using IoT data, can lead to fairer, more transparent pricing models for policyholders. For example, customers who lead more active lifestyles, as tracked by wearable devices, can be rewarded with lower premiums. A personalised approach benefits the customer and the insurer: policyholders are encouraged to manage their own risk more effectively and in return the customer receives incentives for acting in their own best interests.
Enhanced Customer Engagement
For vehicle insurers, IoT-enabled telematics devices, more commonly known as ‘black boxes’, can provide insight into driver behaviour and record information such as speed, acceleration, braking, distance and the time of day a vehicle is driven.
In addition to providing driving feedback and GPS tracking, telematics devices are also able to play a crucial role during crucial customer interactions, including the all-important ‘first notification of loss’. In the case of a road traffic collision, black boxes can detect a crash and automatically notify the driver’s insurer, as well as emergency services. This enables the insurer to take proactive control of an incident, rather than finding out about it days later after a local tow-truck driver has effectively run the show and made all the key decisions. At the same time, this dynamic approach is demonstrably better for the customer, providing a reassuring sense of support and control in an otherwise worrying and unfamiliar situation.
Proactive Loss Prevention
Catastrophic weather events not only pose a significant financial risk for insurers – they also emphasise the need for proactive measures to anticipate and mitigate the impact on policyholders. The surge in extreme weather events, from devastating hurricanes to record-breaking wildfires, has increased the burden on insurers, with natural disasters costing nearly £75bn in losses in 2023.
Policyholders can be kept up to date with advanced weather notifications and alerts, and receive advice on how to remain safe if they are likely to be impacted by a major weather event. Weather forecast data can be automatically matched to policyholder addresses, to automatically notify customers of only relevant adverse conditions, and let them know what they have to do to keep themselves and their properties safe. Notifications can be as simple as an email to alert customers of a potential storm, or emergency SMS messages notifying policyholders of more urgent local wildfire sightings.
Empathy and Risk: Striking the Right Balance
Leveraging IoT devices and embracing the potential of modern connected technologies means that insurers can mitigate financial losses while cultivating lasting relationships with policyholders: built on a foundation of proactive communications, transparency, and personalisation. As the insurance landscape continues to evolve, those who harness the power of technology will not only survive but thrive in an era defined by uncertainty and change, providing first-class customer experiences effortlessly and efficiently using increasingly granular data.
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