7 ways insurers can boost customer retention
In the insurance market today, one of most critical challenges insurers face is customer retention. The current insurance environment is one of low customer trust. In a new IBM Institute for Business Value (IBM IBV) study for insurance, a mere 16 percent indicate that their insurer can always be trusted.
It costs insurers seven times more to attract a new customer than to retain an existing one, so strengthening customer relationships to reduce churn is paramount. IBM has a new solution tailor-made for the insurance industry to help insurers understand their policyholders with behavior-based customer insight powered by analytics. With this insight, insurers can improve customer retention, and offer their policyholders relevant and timely cross-sell and up-sell opportunities.
Ready to learn more about providing the services and experiences that will make your policyholders want to stay? Explore these seven tips for becoming a top-notch insurer from the latest IBM IBV study for insurance:
1. Get to know customer values and behaviors.
“We found that while insurers understand well how to cover risks, they often fail to engage their customers on an individual basis. Even though insurance is complex, customers want to be involved, emotionally and rationally. When insurers act on this knowledge, customer share can rise.”
2. Enter into active dialogs.
“Use social media analytics and conversations via social networks to increase customer touch points. Use the gained knowledge about their wants and needs to sustain intermittent conversation about things that are helpful to the customer.”
3. Support customers in areas they value.
“Support your customers in areas they personally value, even if they are not directly related to your core business. Offer information to your customers in useful areas that are widely related to their coverage: for example, traffic or weather information for auto insurers. Create communities of interest—in social networks or directly hosted by you—to share news, tips and enhance exchange among like-minded individuals and your organization.”
4. Optimize each interaction with every policyholder.
“Our data show that appropriate communication with customers sets off a positive chain reaction. First, it increased the use of that type of interaction. Customers perceived the interaction as more positive and ultimately this increased emotional involvement with their providers—the ‘heart share’ of our study title. Finally, emotional involvement is strongly connected to customer loyalty, so increasing involvement from medium to high had a dramatic impact on the loyalty index.”
5. Add risk mitigation or prevention services.
“Commercial insurers have been doing this for years. Start offering these at the outset of the contract relationship. Later, add tracking via telematics, plus assistance services.”
6. Personalize offerings and provide options.
“Personalize offerings and provide pick-and-choose product options. Product flexibility starts in the back end. Your application architecture must enable a modular approach to products and services. Build a roadmap for flexibility using industry standards such as IAA. From the front end, add in-depth analytics to flexibly balance the offered options with market needs.”
7. Have information available anytime, anywhere.
“Equip tied agents, underwriters, claims adjusters and other fulfillment roles with mobile technology like tablets and other handheld devices. This allows you to abandon a fixed workplace in favor of greater fulfillment flexibility—for example, claims can be adjusted directly onsite.”
IBM Behavior Based Customer Insight for Insurance can help you identify customers who are likely to churn, and customers who are likely to respond positively to a customer retention offer. Do you know what your policyholders need?
Sign up for a complimentary workshop to learn why customer retention is one of the most critical profit drivers for an insurer.