In this blog we discuss the first of the five pillars in-force management at insurers.
Insurance is often said to be ‘sold, not bought’. If that makes for a reluctant start to a customer relationship, are insurers trying hard enough to turn this feeling around once the policy is ‘in-force’?
Historically, the answer is almost certainly no. In particular life insurance policyholders have often been left undisturbed throughout their decade-long policies.
It is easy to see why given the way insurers are organised. It is also easy to see that this is not the best outcome, not for the customer and not for the insurer.
The moving target of customer-centricity
There is a slowly (too slowly in our view) evolving understanding of what it means to be ‘customer-centric’ in the industry.
- Until not so long ago the focus was on ‘treating customers fairly’. For many insurers this was about transparency and delivering what was agreed in the insurance contract. Regulators are still monitoring this area as demonstrated by the FCA announcement last week around UK with-profits policies.
- Most insurers have now moved on to a much better situation where they are taking pride in exceeding expectations on their service levels. It is now standard at many insurers to measure customer feedback using ‘net promoter scores’ (NPS).
- But this still leaves unanswered how the silent majority of in-force customers feels about the company? A relatively new requirement to conduct periodic product suitability reviews has now prompted insurers to consider a new paradigm. Should customer-centric mean pro-actively building better relationships with all in-force customers?
Clearly, this is not completely altruistic. Creating an engaged in-force customer can easily add €50-200 of additional value for the shareholder, far more even for more affluent customer segments.
Re-engaging is rewarding, but far from easy
Unfortunately, most insurers are not well prepared to execute on such a new paradigm.
Renewed contact needs to be safe from a compliance perspective, but it also needs to be relevant and personal, or it could do more harm than good.
Too few insurers have already linked together the data, the analytics capability and the front-office technology to support effective customer conversations. Systems are well developed for sales to new customers, but not enough solutions are available to engage in-force customers.
At inforcehub we see this as a solvable problem and a significant opportunity. We are currently testing a beta version of our new customer engagement platform and look forward to sharing more about this in the near future.
If insurers get this right, the benefits of a turning dormant policyholders into active customer relationships again will be significant.
Please contact Michel if you like to know more.