Despite the need to overcome mounting competition and diminishing consumer loyalty, the online customer experience provided by UK insurers has deteriorated over the last year, with less than half (48%) of basic online questions answered satisfactorily, according to a new study.
As well as failing to answer questions asked online or sent via email, insurers are still ignoring the social media channel, according to the Eptica Multichannel Customer Experience Study. The research found that the online performance of insurers is worsening – with the number of questions answered online dropping by 2% from 50% in the previous year. Insurers responded successfully to just 30% of emails.
The research, carried out by multi-channel customer interaction management software provider Eptica, evaluated 10 insurers active in the motor, life, travel, pet and household sectors. They were tested on their ability to provide answers to 10 routine questions via the web as well as their speed and accuracy when responding to enquiries sent via email, and links to social media.
UK insurers face pressing challenges. The rise of the internet and price comparison sites have slashed margins, competition is growing, customer loyalty is at an all time low and claim costs and regulation are both increasing. Hampered by legacy systems and paper-intensive, manual processes, many insurers are struggling to adapt to this new, multi-channel, customer-centric, low margin world.
Moving to cheaper channels such as email is key to increasing efficiency while improving choice for customers. But while insurers recognise this, there are still issues with providing timely responses that actually answer customer questions. 80% of insurers provided email contact details, but only 60% responded to messages, and just 30% of the replies actually answered the question that was asked. This seems to show a haphazard approach, rather than having a well-planned, efficient process in place.
Poor email performance continued when it came to response times. On average it took insurers 30 hours, 6 minutes to answer emails, double the 14 hours of previous research. The study uncovered huge differences in performance – one insurer took over 2 days (49 hours) to reply to an email – although another responded in just 1 hour 18 minutes, delivering a real competitive advantage.
There was a growing gap between best and worst when it came to online customer service. The two highest scoring insurers answered 7 out of 10 questions asked on their websites, while the lowest score was just 2 out of 10. With over 80% of consumers researching insurance online and loyalty at an all time low failing to provide basic information online will simply drive customers to competitors.
“The insurance industry is at a critical juncture, faced by diminishing margins, rising costs and vanishing customer loyalty,” said Dee Roche, VP, Global Marketing, Eptica. “Efficiently providing a superior customer experience across multiple channels is at the heart of succeeding in such a difficult market. However our research found that overall performance has got worse over the last 12 months, and that there is an increasing chasm between best and worst. Given the competitive pressures facing insurers they need to look at where they can improve their processes to increase customer retention and improve efficiency.”
Social media is now a growing channel for customer service – but insurers are still wary of Facebook and Twitter. The study found that social media use has increased dramatically – 50% of insurers now provide links to their Twitter accounts and 30% have Facebook pages (up from 10% on both networks in 2011). However this lags behind other sectors. Overall 70% of the 100 companies surveyed in the Eptica study had Twitter links and 64% have Facebook pages.