Can we learn from our four-legged friends? Building loyalty and greater protection for insurance customers
Everyone in insurance is talking about the future of our industry. Rightly so, because there's a lot that needs to be redesigned and reimagined to be ready for our changing world. However, we can't forget that some of that "future" has already been written, and it's here right now. How can we create more value for (and from) our existing customers?
Always start with the customer
When we apply focused attention, analysis and action, a fresh look at an insurers' portfolio yields a multitude of benefits for customers, their families, society, insurers – and yes, for the reinsurers who help shoulder the risk.
The benefits begin with existing customers who will enjoy a more engaging relationship and experience with their insurer and most importantly, retain – or improve -- the protection they'll be grateful for down the road. Beyond this, they may discover additional products that deliver more value to them and their beneficiaries.
For insurers, benefits include improving persistency, increasing the take-up rates for offers to existing policyholders and maximising the value of an inforce portfolio in some surprising ways.
The "future" isn't the only place we can innovate
Rethinking our approach to inforce business also creates surprising new opportunities to be innovative. Our experience shows a 5% increase in retention can increase profits by more than 25% as more customers keep their coverage intact and costs are reduced. We also know that customers who interact and have a good experience with their insurer are among the most loyal – creating further opportunities for growth through meeting customer needs. Can we do something about this? Yes.
Swiss Re is changing the paradigm when it comes to inforce business. We’re helping insurers draw additional value from their portfolios and grow. We’ve developed tools and predictive models to spot hidden opportunity, and we use that data and resulting insights to help insurers improve and turn passive customers into lifelong, loyal customers.
Here's how it works
We conduct an end-to-end strategic review of a client’s inforce portfolio to find out what’s driving lapse rates. We then combine the powers of data analytics and sophisticated modeling to discover insights and opportunity to better meet customer needs.
Together with our clients, we shed new light on why customers are making certain choices and identify what interventions will be most effective to create more positive experiences and outcomes. Our behavioural economics experts conduct scientific trials and apply what we learn to make meaningful improvements in many aspects of the customer journey, including, for example, what happens when someone is faced with a change in policy premium or status.
Once we understand the problem, we work together with clients to create a custom strategy to execute, which typically starts with the lowest hanging fruit. Opportunities vary around the world and by market. Tactics can include everything from call centre training and script revisions to looking at premium payment modes and optimal patterns for premium increases. Even changing the subject line of an email has been shown to dramatically improve engagement.
Our clients report great outcomes in the form of:
- Reduced lapse rates
- Improved mortality
- Increased cash flow
- Freed-up capital to deploy elsewhere for growth
- Increased customer retention and loyalty
- New up-sell and cross-sell opportunities
We also hear from clients who report higher engagement and satisfaction from their call centre staff who are happier because they are doing more to help those on the other end of the line.
It costs up to seven times more to acquire a new customer vs. retain an existing one More insurers are recognising the value they can unlock in their existing books, for far less cost than chasing new customers. We’re helping clients turn a name in a spreadsheet to a more rewarding customer journey – enhanced by a better understanding of the moments in a customer’s life when they make choices as well as some of the unconscious biases they bring to decision making.
Additionally, this investment pays off for all concerned. A 2018 study shows that insurers who focus on building loyalty can increase NPS scores by 20% over three years.
So, maybe it's a stretch to compare a relationship with your insurer to the companionship one can find in a furry friend – but I do think there are lessons to be learned in how we can fulfill needs and provide protection! We've spent years perfecting this process and we're excited to see what it can do for you and your customers. Come talk with us to see what the excitement is about.