Reactive to Dynamic: Shifting CX Paradigms in the Insurance Industry

Content Guru's Martin Taylor discusses the inevitable change insurers must adopt to retain customers, and how they can use technology to do it

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Reactive to Dynamic Shifting CX Paradigms in the Insurance Industry - CX Today News
Contact CentreInsights

Published: May 31, 2024

Linoy Doron

The insurance industry runs some of the largest contact centers in the world. As a sector, it tends to appreciate scale and resilience, and was rather quick to adopt new trends such as omnichannel, Digital, and self-service. However, the past year hasn’t been easy on insurers, who are once again forced to adapt their customer service strategies to keep up.   

Natural disasters, extreme weather, geopolitical tensions, and an increase in shallow fake AI claims all result in higher premiums. In the UK alone, the Association of British Insurers (ABI) has reported a 34% increase in premiums in the 12 months to the end of 2023.

With many insurance customers, including Europe’s largest two providers, Content Guru sees this shift in the industry up close. 

“Unsurprisingly, this sharp increase in premiums has been leading to less satisfied customers,” notes Martin Taylor, Deputy CEO and Co-founder of Content Guru.

The latest annual service by the UK Customer Service Index (UK CSI) showed that customer sentiment in the insurance sector is at its lowest since 2015.  

“Essentially, customers are paying more without a substantial improvement in service – and they’re not happy about it,” he says. 

This has led to a crisis of customer loyalty, with customers shopping around more. Now, insurers must work harder to build and maintain loyalty from their customer base. 

So, what can insurers do in the current climate to differentiate themselves and maintain a competitive edge? Quite a lot, in fact. Let’s dive in.  

From Reactive to Proactive

Naturally, the first thing insurers must do to improve sentiment is to detect poor service and fix it. However, the industry’s traditional service model makes this task quite problematic. 

“If you look at the traditional model, insurance is renewed annually, so, typically, contact would happen about once a year towards policy renewal,” Taylor says. 

Historically, that was seen as a good thing – If you weren’t talking to your insurer, you didn’t have a claim to make. And for the insurer, not hearing from the customer often kept costs down. 

“It’s a kind of transactional detente that people were happy with,” Taylor notes. “But now, from merely being reactive, insurers must start being proactive.” 

What does that mean, exactly? A few examples would be building trust using regular communications, reaching out to the customer with useful advice, and sharing relevant insights and information – like alerts on coming extreme weather events. 

“People don’t want to be contacted too often, but if there’s anything relevant to them, they’ll want to hear about it,” Taylor says. “And obviously, contact centers and CX technology are at the heart of that.” 

However – hold on to your seats – according to Taylor, even ‘proactive’ isn’t sufficient anymore for insurers to stay ahead of the game and maintain customers in the long haul. The real new key term is ‘dynamic.’ 

From Proactive to Dynamic

From a CX perspective, the reactive-to-proactive shift makes insurers more valuable to customers, and it’s definitely a noteworthy improvement from the traditional service approach in this industry. However, with the advent of new technologies like the Internet of Things (IoT), the bar is rising even higher. 

“We see IOT and other connected devices playing an increasingly significant role now within insurance,” Taylor notes. 

“That’s a big opportunity for the contact center to transform into what we call ‘a dynamic data hub,'” he explains. 

Being ‘dynamic data hubs’ means that contact centers are no longer just for the flow of communications now, but also for the flow of data and information.  

“There are increasingly large numbers of connected devices,” Taylor says. “Some of those are vehicle-based, or they can be sensors, telematics, or wearables.” 

In personal health insurance, for example, wearables are increasingly part of the mix. This means that the younger and the more active you are, demonstrating that with data from wearable devices, that can translate into lower insurance premiums. Mind-blowing, right? 

“If we think of insurance, it’s effectively an assessment of stereotypes: How old are you? Where do you live? From that, a generalized picture is made of the person, organization, or object that is being insured.” 

This all ties back to the importance of data: If insurers have actual data about a person’s lifestyle or the way an object is used, they can base the policy on real information rather than just suppositions.

“That’s not just an exciting development for insurance companies, but also for the individual, who now gets to influence their insurance policy by behaving a certain way,” Taylor says. 

The Future of Insurance CX: Personalized Policies, Happier Customers

With ongoing contact and data-informed decisions, insurers can tailor offers not only for private individuals, but also for different market niches and tiers.

“Some of those may be budget based, where there’ll be perhaps less of this proactivity, and others will be premium brands, where people are insuring more valuable objects like artworks or vintage cars,” Taylor says. 

“That understanding can be taken to a very high level, which I find quite exciting.” 

Ultimately, contact centers are at the heart of a major crossroads in the insurance industry, where insurers have a choice: Moving forward to play a much more active role in their customers’ lives, or (probably) falling behind. 

“It’s no longer enough to simply be reactive, and perhaps not even enough to be proactive – now, you have to be dynamic. And the technology is here to enable that transition,” Taylor concludes. 

“This technology is already beginning to be used by those at the leading edge; and when it’s so easy to switch, the other players will have to catch up to where the leaders are.” 

To learn more about Content Guru, visit their website here

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