How do we make insurance the most loved industry? Unfortunately, there is no easy answer. Daniel Schreiber, the CEO of Lemonade highlighted the current reality. “At a fundamental level, insurance is a social good. It’s about a community of people pooling their resources to help the weakest members in their hour of need. That should be the most loved industry, but it’s 180 degrees away from that.”
But there has never been a better time to win back the hearts of insurance customers. Innovators like Schreiber are introducing fresh thinking to the market. There are also endless possibilities from new technology. Finally we are seeing a growing trend of collaboration that is bringing the best ideas together. So where do we start? Improving accessibility and winning back trust seem a priority before we can say insurance is truly loved.
Improving accessibility in the insurance market
The Financial Conduct Authority (FCA) highlighted the issue of restricted access to insurance as long ago as 2016 with their paper ‘Access to Financial Services in the UK’. The Department of Work and Pension took up the challenge to improve the situation in 2018. They recognised the problems faced by people with disability and launched a new initiative, the Access to Insurance Working Group. The latest update on their work, Access to Insurance Newsletter, was published in January.
However, the importance of insurance accessibility is wider. In order for people to feel insurance is accessible, they must first feel comfortable with the whole selection process.
Improving the buying process
Customers want access to the right information, want to feel supported and want to be able to make buying decisions at their own pace. There is often a belief that speed means fast fulfilment. Sometimes it does, but none of us want to feel rushed. Equally, none of us want to feel like we’re being made to sit through sales patter we don’t need, or asked seemingly endless and pointless questions when we’ve already made our purchase decision.
Whichever way an individual prefers to research and buy – digitally, face-to-face, or over the telephone – all customers want the process to be integrated, streamlined, and efficient. Insurers need to deliver a seamless, consistent and “multi-access” experience across all touchpoints. Many people avoid or abandon a process they feel is too onerous. ‘Speed’ should mean that each stage in the process is fast and efficient and delivered in a manner that suits the customer. Some customers want a straight-through digital process without human intervention, but that is not perfect for everyone. Improving accessibility to the insurance market starts with recognising that people are different.
Improving trust in the insurance market
Insurance should engender trust. Unfortunately, this is not always the case. Every quarter The Chartered Insurance Institute (CII) releases a very comprehensive and informative CII Trust Index.
The latest edition in Spring 2021 reported that those most affected financially by coronavirus tend to value clarity around claims processes and being able to choose suppliers during a claim ahead of rewards for loyalty.
In contrast, consumers who had not suffered a significant impact from coronavirus still believe renewal premiums and rewards for loyalty are the biggest areas for improvement for insurers.
So how do Insurers win back trust?
The priorities highlighted by the CII in their trust index provide useful insight. Insurance promises protection, so policy holders must understand the claims process and believe that claims will be paid.
But the work of the insurer to win trust should start well ahead of any potential claim. Insurers have a duty to make sure the terms and conditions of the policy are completely transparent.
In addition, there is the matter of rewarding loyalty. Customers want to feel valued and supported. Price will be important, but it is more than just that. It is about adding value for the customer. For example, some insurers now also focus on ‘prevention’ ahead of the need to claim. For example, some offer discounts on ‘smart technology’ that can help protect homes from more extensive damage from fire, flood and theft.
Policy transparency alongside help with prevention is a great way to start the customer relationship. This must then be backed up by ensuring customers have certainty in the claims process. Together these will form a great pathway to public trust.
There are plenty of opportunities now for insurance to be the most loved industry. The first step is putting the interests of customers first.
Content has been prepared exclusively by Total Systems plc, a specialist provider of insurance systems developed for the digital insurance age.