Better service doesn't always mean greater loyalty
Although the majority (86%) of insurance customers who have submitted a claim in the past two years are satisfied with the way it was handled, 41% of those who have submitted a claim are still likely or very likely to switch to another insurer in the next 12 months, according to research from Accenture, which concluded that a good customer service experience isn't always enough to secure true loyalty.
The research, which was based on a survey of nearly 8,000 automobile and home insurance customers in 14 countries, found that insurers can't simply count on providing a satisfactory experience anymore; instead they need to meet - or exceed - their customers' expectations in a wide range of areas, including speed of settlement, transparency and use of innovative technologies such as mobile and social media.
Some 14% of insurance customers who had submitted a claim in the previous two years said they were dissatisfied with the way it was handled and, not surprisingly, 83% of these dissatisfied customers were planning to switch (or had already switched) to another insurer.
"While a customer who is dissatisfied with the way his or her claim was handled is almost certain to defect, a satisfied customer will not necessarily remain loyal," said Michael Costonis, managing director for Accenture's insurance industry practice. "These results show that delivering average claims satisfaction levels is not enough. The bar has been raised and, in order to clear it, insurers need to provide a differentiated claims experience that not only delivers on service but maintains the appropriate financial discipline as well."
The survey also noted that customers who had submitted an insurance claim in the previous two years were almost twice as likely to switch insurers during the following 12 months, compared to those who had not submitted a claim (41% compared to 22%).
"The very act of filing a claim makes a customer much more likely to switch insurers, regardless of how satisfied they are with the experience," said Costonis. "Insurers should look at how connected devices and other digital technologies can help customers better manage risks to reduce claims frequency."
Consumers also revealed that they are willing to share information in return for certain benefits. More than three-quarters (77%) said they would be willing to share personal information with their insurers if it would enable them to receive lower insurance premiums, while more than half (59%) would do so for quicker claim settlements, and 28% would do so for personalised recommendations that could help them better manage risk and avoid losses.
When asked what types of information they would be willing to share, more than half (56%) said they would share information about the condition of their car, 52% about their driving habits, and 39% about their location via Global Positioning System (GPS).
The survey also found that speed of settlement and process transparency are the most important contributors to insurance customer loyalty, with each being cited by 94% as a key expectation when interacting with insurers during the claims process. Additionally, 90% cited the ability to contact the provider at any time in order to check the real-time status of a claim as an important expectation.
Sources: Accenture / The Marketing Factbook.
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