With the FCA and other regulators focusing on increasing levels of consumer protection in the insurance industry; it might be time for insurers to take a look at what it is their customers really want. In highly competitive markets like insurance it can be easy to get involved in a race to the bottom – low margin products with hidden costs in order to create the right headline price. Yet, it’s clear from a section of other industries that customers can and will pay more for a quality service. So what is it that customers want from their insurance? Here are 5 ideas that may help you align your products to customer wants and needs.
1. Clarity of pricing
The recent ruling on add on sales from the regulator shows that clarity is important to insurance customers. People want to know where their money is going and what additional value you are creating for them in exchange for an increased premium.
In consumer IT that’s what Apple’s business model is based on. A new Mac costs more (substantially more) than a new PC of similar specs. 1 in 20 people choose the Mac anyway. They like the simplicity of use, the durability and the ongoing service relationship and they’re willing to pay for it. There are no hidden extras – the specifications and pricing are clear to the customer at the point of purchase with Apple products.
2. Responsiveness
My local pizza delivery store promises that if my order doesn’t reach my front door within 30 minutes of our phone call – I eat for free. I never end up on hold or in a queue when I want to order pizza; I call the shop – they answer the phone. Pizza isn’t an expensive product. Yet, the vendor understands that as a customer I want to eat when I’m hungry and I want to talk to a human being when I call, so they offer a service guarantee to demonstrate their commitment to my needs.
The insurance industry could learn a lot from my pizza delivery service. People don’t like automated queuing systems, in the event of a claim (in particular) they want to talk to someone right now. Someone who has just been burgled or been in an accident, etc. is far more stressed than I am when I want pizza.
3. Empathy
Empathy is a vital component of customer care in any industry. It’s doubly important in insurance. Customer service staff cannot come across as disinterested or even “only doing their jobs.” In the case where a claim is being denied this is even more important.
A lack of empathy can be found across the financial sector; probably because it’s easier to focus on the numbers rather than on the people. Your customers want to be treated well throughout their customer lifecycle with you – not just when they sign on the dotted line for a new policy.
4. Loyalty
Google “should I renew with my insurer” and you’ll see that the first page of results is all about shopping around to get a better deal and how automatic renewal appears to be loaded in favor of the insurer.
This makes very little sense. It costs more to attract a new customer than to retain an existing one. Yet, in many cases renewal is poor value for a customer. Insurers should be focused on building loyalty with their clients. Loyalty is a two-way street if you give your customers your loyalty, they’ll give you theirs.
5. Products that add value to the customer’s life
Payment protection insurance wasn’t bad value it had no value to the customer at all. This simply isn’t good enough. Insurers should be looking to build a great reputation with their customers and products like PPI will always be damaging in the long run.
You should be able to illustrate the value in any product from the customer’s perspective. If you can’t – it’s probably a bad product.
