27. June 2023 By Ingo Gregus
The foundations for success in digitalisation projects for insurance providers
Digitalisation has transformed the insurance industry, and companies need to develop a true omnichannel strategy to remain competitive. And that is what we will discuss today in part two of our five-part series for insurance providers. Your omnichannel strategy allows your customers to communicate with you via different channels and handle their insurance matters from anywhere. In an ideal world, anyway. But implementing this type of a strategy involves a change in corporate culture, technological integration, data protection and security challenges, complex services, a personalised experience and employee training. This blog post explains the key foundations for success that will keep your customers happy and your business competitive.
The foundation for success lies in having a true omnichannel strategy
Digitalisation has brought about a fundamental change in many industries, and your business as an insurance provider is no different – especially because your products are not tangible ones such as electric motors or energy drinks, but immaterial ones. In today’s world, insurance providers must develop an end-to-end digital and omnichannel strategy to wow their customers and remain competitive. This is because customer expectations of digital and analogue processes have changed drastically in recent years. One-click shopping, chatbots, integrated call centres and AI-based end-2-end customer processes do not stop at the insurance industry.
Omnichannel strategies are key to customer satisfaction
Today, your customers want to be able to communicate with you via different channels and handle their insurance matters from anywhere – at any time of the day or night. They want relevant information instead of cut-and-paste stock responses. That is why insurance providers need to adapt their business processes to these expectations and create an omnichannel digital presence to remain competitive. Doing this requires a change in the way providers think.
But it is worth it, as omnichannel strategies are a master key to customer satisfaction. They are a sophisticated and serious way to sustainably improve the customer experience. Customers these days want a seamless and personalised experience across all channels, from searching for information to buying insurance and settling claims.
It is not just about creating a website, landing page or mobile app, but about fully integrating digital processes into the company’s business.
The challenges of implementing your strategy
This is easier said than done, as developing your omnichannel strategy poses some challenges:
- Cultural challenges: Introducing an omnichannel strategy requires a change in your corporate culture. It requires a new mindset and an open attitude towards change, as it is about customer requirements, not about products and silos in the insurance company itself. This does not all happen overnight, but is a long-term and unfortunately lengthy process.
- Technical challenges: Implementing your omnichannel strategy requires different technologies and systems to be integrated. As an insurance provider, you need to ensure that your systems communicate with each other and provide a seamless experience across all channels: CRM, marketing automation, tracking, customer data platform and so on. Having a target vision is a good place to start in terms of what you need for aligning your processes to ‘omnichannel’. We will take an in-depth look at this in the fourth post in our series.
- Data protection and security challenges: Omnichannel strategies involve processing large amounts of customer, contract and service data. Insurance providers need to ensure that they comply with data protection guidelines and keep their customers’ data secure. Regulations set tight restrictions on how data is handled in insurance companies, and in some cases they even grind everything to a halt. This makes it all the more important to integrate the issue and all the stakeholders from the very beginning.
- Complexity of the products and services: Most insurance providers offer a variety of products and services. An omnichannel strategy requires all these offerings to be seamlessly integrated on different channels. Many products and services are not yet suitable for an omnichannel strategy. The conclusion process takes place either online or offline. They are usually not end to end, leaving customers unable to pick and choose between channels. This means that ‘omnichannel’ thinking must also be applied to product creation.
- Personalised experience: Your customers expect a personalised experience across all channels. Implementing an omnichannel strategy therefore requires systems to be developed that enable personalised experiences. The more intense the experience, the better the result for you as an insurance provider.
- Employee training: Introducing this type of strategy requires training your employees. They must be able to deal with the new systems and technologies and overcome their own limitations within the company. They need to change the way they think about products, services and processes right from the start and work together. The feedback from employees is usually more positive than you might think.
Insurance companies must take these challenges into account if they want to develop a successful omnichannel strategy. This can help improve the customer experience, increase customer satisfaction and build long-term customer relationships.
A data-driven key – relevant personalised processes and information
Personalised customer communication is a crucial factor in your success as an insurance provider. Customers today no longer want to be treated as a number, but expect personal advice and communication. By using data and analytics, you can offer personalised offers and recommendations tailored to individual customer needs.
Using customer information such as age, gender, income, marital status or location enables you to develop offers that are truly relevant. The result is an improved customer experience. One of your core goals.
How can insurance providers implement personalised customer communication?
Personalised customer communication requires a thorough analysis of existing customer data. Is the data up to date? Is it clear? Are you allowed to use it?
In both this year’s and last year’s adesso study on the topic of commerce in banks and insurance companies, we found that customers are definitely open to offers for products and solutions based on their data. This is even more pronounced in younger people than in older people. It is important that every personalisation looks to achieve the goal of generating a customer benefit. Personalisation must always be understandable and comprehensible.
Personalised customer communication is therefore a crucial factor in your success.
Where do the opt-ins for digital communication come from?
Nine times out of ten, we in the insurance industry face the challenge of not having e-mail addresses, not having consent to communicate or not having either. Insurance providers must strategically seek consent for electronic advertising and communication in order to successfully communicate digitally.
- Creating transparency: Your customers want to know what kind of electronic advertising and communication they can expect. It is vital you make clear what types of information are sent through which channels. This is not only in the name of fairness, but is also a regulatory requirement.
- Personalisation: If your customers feel they are receiving a personalised experience, they are more likely to give their consent to electronic advertising and communication. We have found this out in various processes and campaigns.
- Incentives: You can offer incentives to get your customers to agree to electronic advertising and communication. This could be, for example, discounts on insurance premiums or bonus points for providing consent – think of it as a sort of ‘deal’.
- Simple process: The process for giving consent to electronic advertising and communication should be simple and straightforward – not overwhelming. Customers should be able to give their consent online or through their preferred digital channels.
- Building trust: Insurance providers should build trust by keeping user data secure and complying with privacy policies. People who have confidence in your company are more likely to give consent to electronic advertising and communication. Tell your customers that you handle their data safely and responsibly.
- Clear opt-out options: It is important to offer customers clear opt-out options. If they change their mind later, they should be able to simply unsubscribe from electronic advertising and communication. They can revoke their consent on any channel, so it’s important to store everything centrally.
Measure and weigh the omnichannel customer journeys
You have a strategy. Good. You have opt-ins. Even better. But you still have to measure the success of your omnichannel customer journey and gradually improve it.
Measuring key performance indicators (KPIs) is an important part of evaluating the effectiveness of your omnichannel strategy. It is important to measure along the entire customer journey on all channels. Here are some useful KPIs to measure the success of an omnichannel journey:
- Conversion rate: The conversion rate measures the percentage of your visitors who perform a specific action on the website, such as buying insurance or using a service. A higher conversion rate indicates that your website offers a positive customer experience. It is essential.
- Bounce rate: The bounce rate indicates how many users leave the website without interacting with it. A high bounce rate can indicate that your website is not user-friendly or that the products or services offered do not meet customer expectations.
- Dropout rates in application and completion sections: This rate indicates how many users abandon the purchase process and at which points, such as in your application and completion sections. A high dropout rate may indicate that there are problems with comprehension, wording, questions or other factors that affect the buying process. So always keep an eye on your funnel.
- Average dwell time: The average dwell time indicates how long a user stays on your website. A higher average dwell time indicates that the website offers interesting and relevant content that keeps users interested.
- Net promoter score (NPS): The net promoter score measures the likelihood that your customers will recommend your business to others. A high NPS indicates that customers are satisfied with your business and had a positive customer experience.
- Response time: Response time indicates how quickly your company reacts to customer enquiries. A quick response time can help your customers view the company in a positive light and feel valued. The bar has been set very high by shops such as Amazon.
- Customer lifetime value (CLV): Customer lifetime value indicates how much your customers are likely to spend over the course of their relationship with the company. A higher CLV indicates that your customers are likely to be profitable in the long run.
By keeping an eye on these KPIs, you can evaluate the effectiveness of your omnichannel strategy and make adjustments where necessary to provide a better customer experience and be even more successful in the long run. So create suitable KPI sets for your customer journey.
Conclusion – the future will be a tough one without omnichannel
The bottom line here is that you need a seamless omnichannel strategy and the corresponding technological implementation – all focused on the customer. If you cannot measure your strategy and do not have clear KPIs, you are left with ‘happy guessing’ and the risk of losing your customers and therefore your business. So get to work on your omnichannel strategy.
Spoiler alert for post number 3: in the next blog in our series, we will look at how digitalisation can help you as an insurance provider build and expand your brand.
You will find more exciting topics from the adesso world in our latest blog posts.
All blog posts in this series