Building the Optimal Customer Experience: What’s the Missing Piece?

Cathrine Graf, iptiQ APAC Chief Operations Officer, interviews William Trump, Head of the Global iptiQ Behavioural Insights Group, and Dan Middleton, Head Operations Excellence iptiQ APAC, to discuss how insurers can best use customer insights to deliver good customer experience.

Cathrine: Thank you for joining me Will and Dan. To start with, I wanted to explore the definition of customer experience and ask for your thoughts on how you would describe it. To me, customer experience is a feeling. It varies for each person and in different contexts. It’s also based on past experiences and future expectations.

Will: I define it as the impression that the customer is left with after any interaction with our brand. So, it’s far more than just customer service. A good customer experience is when a customer leaves satisfied or more than satisfied with their experience. The good news is the bar is relatively low for insurance compared to sectors like retail. In 2021, the average Net Promoter Score (“NPS”), which is a key metric of customer satisfaction, for the Insurance industry in the US was 21.9. By contrast, retail scored much higher, averaging 32. NPS in Insurance also scored lower than many industries which tells us that there is plenty of room for improvement.¹

We have identified four main areas that impact customer experience in insurance that when managed correctly, result in a satisfied customer.

1. Speed: was the product delivered in a timely fashion?
2. Empathy: has the interaction taken the individual needs into account?
3. Simplicity: was the process convenient and easy to understand?
4. Expectation management: were expectations communicated and then met (or even exceeded)?

Dan: Expectation management is particularly important as many elements of this are within our control. For example, if a customer is told they will be called at a certain time, and that expectation is met, it can build a sense of trust and satisfaction.

Cathrine: Insurance does not have a great reputation in terms of customer experience. Part of that is because insurance isn’t a desired product, it’s intangible and you can’t try before you buy. We are asking people to pay for a promise that in some cases, they may never see the return on. How do you change that perception so that customers can expect a good experience?

Dan: Well for a start, let's make sure we're understandable and accessible to our customers. Unfortunately, insurers often make customers feel as if they are speaking in another language. Take the word “premium” for instance. In everyday language, "premium" is perceived as an upgrade from basic, very different from the insurance language. We’ve now repeatedly proven that when we provide clear information, this helps customers understand what exactly they are buying, particularly when dealing with complex products.

Secondly, let's make sure the "information exchange" is of value to the customer, not just the insurer. Most insurers want to have a deeper relationship with customers, which often means communicating with them more frequently. However, many customers perceive insurance as a “set and forget” product and that sharing more information with your insurer may lead to higher premiums or reduced cover.

Now, customers are in fact willing to share data with insurers if they trust that it will be used exclusively for the purpose intended and if there is a benefit to them in sharing that data. So, our communications with customers need to be relevant, timely, and transparent. This can help us change the narrative, building more than a transactional relationship.

Will: What Dan is describing is what I call the insurers' worst enemy: the empathy gap, where companies build customer service processes based on their own priorities whilst neglecting the customer's true needs and expectations. In a nutshell, companies often end up building processes for robots rather than humans. If we're not careful, customer processes become transactional and hard to navigate, instead of being clear and empathetic.

It is important to put processes in place to meet needs that are both functionally competent (is the website working? is the language clear?) and emotionally competent (do I trust the company? do I have assurance in what I purchased?).

Dan: Absolutely. We have really noticed this as insurers, and other service providers have shifted more processes online. Whilst this is efficient and convenient, it has created a more transactional relationship with consumers.

So how do we connect with a customer about a product they hope they never need to use? By changing their narrative from protecting future earnings to an emotional, empathetic approach of linking the protection conversation with the things that people care most about – their house, car, lifestyle and loved ones.

Cathrine: My next question is how is iptiQ improving the customer experience? I will start with the fact that we are approaching customer experience from two aspects, the left side of the brain which looks at logic and analytics, and the right side which examines emotion and intuition.

Dan: At iptiQ we have a digital first approach, we integrate people with technology. Customers have adopted to and often prefer digital, but only if it is more efficient.

For example, repeatedly entering the same information when purchasing or making a claim is not efficient and not customer friendly. Automation can ease the process, but only when the machine can deliver the job better than a person. Human interaction is still important to build trust. We connect through various channels and can cultivate trust by being on standby anytime a customer needs help. Sometimes, a customer simply prefers the security of a real person being able to assist them. It’s a combination of both things at the right time that can make the journey better.

When automation is used correctly, it is a key component of our customer experience strategy. AI is used to collect, categorize and analyse data, meaning that individual customer requests are actioned in real time and actionable insights are gathered at scale. And insurers need to ensure transparency, honesty and fairness regarding the data that is shared, if they want to maintain trust.

Will: This feedback loop is incredibly important to delivering a good customer experience. Good customer outcomes are the key to turn around consumer perception of insurance. By gathering all the customer feedback through a real-time, automated system, we are then able to respond to what customer are telling us and move closer to personalized insurance offerings.

One more thing I wanted to add is insurers should not only focus on the sales journey where transactions are made. Claims for example is the moment of truth and is an emotionally charged process. Delivering on promises in a timely manner and as frictionless as possible, while showing empathy for customers during claims helps insurers gain customer loyalty and create brand/product ambassadors.

Cathrine: As a B2B2C provider, iptiQ works with brand distributors to deliver insurance products. It is critical that we are able to complement their brand and provide processes that align with their guidelines. So, how does optimizing customer experience make iptiQ a good brand partner?

Dan: From an operational perspective, we focus on three main areas with our partners:

• Ease of integration – our ability to on board products onto a partner’s platform for a seamless customer experience. 
• Sticky customers – leveraging existing customers’ trust with the partner brand encourages them to buy additional products, such as insurance. Owning multiple products with one brand makes customers stickier as they are more inclined to stay with one provider.
• Integrated experience – our capability to become an extension of the partner’s brand, providing an integrated customer experience.

Will: Ultimately our own customer experience principles apply to our partners and provide real business benefits. Our data shows that identifying and actioning customer feedback has strong links to retention, and providing empathetic and clear customer communications leads to higher satisfaction levels.

Insurance is inherently a subscription product, which means it is long term, differentiating it from many of the brands we work with. By creating a relationship where the insurance is a regular and ongoing transaction - such as a monthly premium payment – the partner brand can harness that ongoing interaction to the benefit of both parties.

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