Luxembourg: Customer Experience In Insurance: It's About People, People

Last Updated: 20 April 2018
Article by Steffi Schenkewitz

Most Read Contributor in Luxembourg, July 2019

Seven or eight years ago, transparency was largely a byproduct of burdensome new regulations. By now, however, it has become a feature demanded by consumers, with every company competing to be more transparent than the next. How did that happen? In one sense, it's the natural result of regulations maturing and of companies finding their footing in response to them. It has also been enabled by a new wave of fintech that has formed around the business landscape (imagine how puzzling a term like "regtech" would have sounded to you back in 2007).

But the part where transparency is demanded by consumers—that is new, in the sense that it has nothing to do with price, quality, or speed. It's about ethics. Corporations are to be held at the standards of a person, and a person cannot be trusted until his or her intentions are clear. Interestingly, no company is fighting this trend anymore, despite how it's upheaving formally successful business models. Just the opposite, in fact, as they are jumping all over transparency. Consider: the most trustworthy fintechs don't use social media to push new products but rather to chat to customers and help them out; blockchain, a platform able to be edited and verified with the doors wide open, has gained a huge following; and small and apparently simple companies seem to win popularity points for being knowable and familiar.

Customers are thus demanding not just a product, but also an ethos (or perceived ethos) behind the product. This isn't new, to be fair, but it's come to the foreground in today's environment. The frenzy around becoming transparent illustrates how companies are really at the beck-and-call of consumers, seemingly more so than in the past—perhaps due to the universe of competition out there, which is always expanding thanks to new, fast-as-hell delivery models and lower barriers to entry.

The result of all this: companies must cater to customers, and for insurers this means focusing on the person rather than on the risk.

It's about people, people

For ages, insurance companies operated on a mostly unflinching model whereby they simply delivered risk coverage, and were able to (more or less) tell the customer what the customer wanted. They competed with each other over price, policy, branding, reactivity of customer service agents, etc. It's not clear when precisely it happened, but within the last three years a giant meteor has struck this way of doing business and it is completely extinct.

Indeed, customers have realised that they can have transparency from insurance companies... as well as coverage customised to their lifestyles, discounts for good driving, credits for being proactive about their health. Insurance can be gamified, companies should have accurate profiles of users (without overstepping their bounds regarding privacy!), and help should always be an instant message away—by chatbot, if need be, but only if it's a well-designed and actually helpful chatbot. Big data and artificial intelligence have thoroughly ruined the modern customer, who now wants an experience, even from something as classically mundane as insurance.

Thinking like a customer

The next question for insurers is: if you want to be customer-centric, where should you begin? There are probably a thousand good answers to that, so I'll start with something general: think about personal moments that most customers share. Everyone differs, but many big moments in life are the same: moving to a new place, purchasing a car, getting married, buying a house. Many of us, if given the option, would prefer more than just a drab insurance policy—we wouldn't say no to an honest and friendly, let's even say anthropomorphised, insurer. Thus, these big life moments could be crucial in building loyal relationships because there is something emotive in today's marketplace: ethos and personality are valued enough that many customers want their insurer to really "care" about them at these key moments—like a friend would.

Take, for example, buying a house. Insurers could dissect this complex process into little jobs to be done, and further sort out which jobs they can do on the customer's behalf. For the rest, they can signpost advice or help. The idea would be for customers to feel that the whole process is clearly mapped, so that they can retain a simple, global view. The insurer thus succeeds in its anthropomorphised role of being excited and helpful in this intimate personal achievement. The little jobs within house-buying would look something like this:

A thousand tiny moving parts behind one simple smile

Imagine a robot smiling. As you're looking at this cheery machine you recognise the finished emotion, but only if you force yourself through some mental gymnastics would you consider the tens of thousands of human-hours that went into designing, building, and programming that robot. Perhaps my approach in this article has been a little obvious, thus far—everyone agrees that being customer-centric is a hallmark of the present business era. But not everyone realises that, just like the smiling robot, an insurance company needs countless human-hours to appear friendly, simple, and capable on the outside. Insurance companies are insanely complex networks of skills and compliance and services and risk expertise and technology, and old business models were simply not built with the modern customer—who wants the robot to smile—in mind. Thus, insurers are facing change at fundamental levels: new organisational mindsets, new operating models, new approaches to segmentation, and new standards of benchmarking.

Further insights

Come and join us for an evening where we'll bust this topic wide open. The Turning customer experience vision into reality event takes place on 8 May: our lineup of expert speakers will unpack customer experience in the insurance sector, examining how insurers can reorient themselves to focus on the person, not the risk.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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