Modern Communication Channels In The Insurance Industry

Customers want communication from insurers. They demand it. And they will reward you for it.

According to Riverside:

• effective communication programs can generate profitable additional sales from up to 30% of the customers included.
• well-targeted and relevant customer communications can reduce policy lapse rates by 12% to 30%,
• 7% of customers surveyed were willing to share usage and behavior data in exchange for benefits like lower premiums or quicker claims settlement.

McKinsey & Company data says that insurance organizations using digital channels and analytics enjoy greater customer satisfaction and retention​.

How a modern insurance company should communicate with their clients? Let's talk about it.

Why Communication Is Important In Insurance Industry?

Enhancing customer engagement

The frontline employees are able to engage customers more effectively when they communicate well, especially in handling customer complaints.

Communication consistency across owned touchpoints improves employees' attitudes toward marketing communications, which in turn enhances their perceptions about customer engagement behavior.

Customers value clarity, pleasure, responsiveness, and appropriate language in a company's communication efforts.

If you manage to enhance customer engagement, your company should see a substantial change in the revenue department. According to a study by Forrester, companies that prioritize customer experience outperform their peers by as much as 80% in terms of revenue growth.

The "Engager" model by Hall and Partners suggests that up to two-thirds of a brand's profits depend on effective consumer engagement. Their analysis found that consumer engagement scores could explain two-thirds of the difference in profits between brands. Highly engaging brands like Google and Microsoft score above 110 on the "Engager" scale and enjoy profit margins of around 15%, indicating a strong link between engagement and profitability.

Customer expectations

A seamless experience is expected by a staggering 90% of customers, irrespective of the communication channel.

According to a study by McKinsey, 71% of customers expect companies to deliver personalized interactions, and 76% get frustrated when this expectation is not met.

This is the core of insurance digital transformation.

Operational costs and efficiency

Weave points out that unified communications platforms that integrate various channels like calls, chat, email etc. under one system can increase operational efficiency by:

• Reducing obstacles and distractions in meetings, potentially saving a team of 5 employees earning $15/hour around $20,000 per year by avoiding extended unproductive meetings.
• Providing centralized information storage, avoiding wasted time searching across multiple channels.
• Enabling seamless collaboration by removing obstacles, which is crucial as almost 40% of employees believe there is not enough collaboration in their workplace.

Four Horseman of Communication

10 years ago Marius Dan Gavriletea highlighted four main channels of insurance communication:

1. Traditional mail.
2. Electronic mail.
3. Phone communication.
4. Internet Website & Applications.

And although these channels are still viable, let's say, that a world has moved on during the past decade, and they're not the first choice anymore.

What are first choice communication channels now? Well, customers decide.

The Insurance Software: Self-Service Portals

According to a Zendesk study, 67% of consumers prefer using self-service portals over traditional customer service channels. 

Furthermore, 90% of customers expect organizations to offer a self-service option, and 82% are willing to try it​.

Read more: Self-Service Customer Portal for Insurers

Automation (SMS, Emails, Quick Form Generation)

Automation in the form of automated SMS, emails, and quick form generation has significantly improved communication efficiency within the insurance sector. Automated systems allow for the swift processing of claims and policy applications, reducing the time and effort required from both customers and employees. 

According to research, insurance companies that have adopted automation technologies report up to a 60% reduction in processing times and a 40% decrease in operational costs​ ​. 

Virtual Assistants (AI)

AI-powered chatbots can handle a wide range of tasks, from answering policy questions to initiating claims. The global insurance chatbot market was valued at $467.4 million in 2022 and is projected to reach $4.5 billion by 2032, growing at a CAGR of 25.6% from 2023 to 2032.

According to a report, 50% of customers rank digital communications as a high priority, but only 17% of insurers currently use them.

According to a Capgemini report, over 40% of insurers are now leveraging AI to enhance customer service and operational efficiency​​.

These virtual assistants are available 24/7, ensuring that customers receive prompt assistance at any time, which significantly boosts customer satisfaction and engagement.

Leading French insurance group AG2R La Mondiale's chatbots handle around 550 different sessions per day, which amounts to roughly 16,500 sessions per month. Taking into account that chatbots can cut operational costs by 30%, it sounds appealing.

Mobile Applications

Mobile applications have become essential for modern insurers, offering customers a convenient platform to manage their policies, file claims, and receive updates on the go. The adoption of mobile apps in the insurance industry is driven by the increasing demand for accessibility and real-time service. Studies show that 60% of consumers hold organizations in higher regard if they offer mobile-responsive self-service options​​.

One Tool To Rule Them All – Decerto's Self-Service Customer Portal for Insurers

Decerto’s Self-Service Customer Portal is a perfect example of an integrated customer communication solution that benefits both insurer providers and their customers. 

The insurance software is a unified platform that incorporates multiple customer communication channels, enabling customers to manage their insurance policies, file claims and access support from one place. It offers:

1. Personalized Service: Self-service portals enable personalized interactions and convenient access to policy information for customers across multiple channels.
2. Enhanced Customer Experience: Providing a central multi-channel engagement portal where policyholders can access all their information improves the overall customer experience.
3. Operational Efficiency: Digitizing and automating processes like updating beneficiaries, addresses, accessing documents etc. through self-service portals increases operational efficiency by eliminating manual tasks.
4. Claims Management: Self-service portals can be leveraged to enable customers to initiate and track claims online, streamlining the claims management process.
5. Cross-selling Opportunities: With a centralized customer portal, insurers can experiment with incentive programs and targeted offers for cross-selling additional product lines to existing customers.
6. Cost Savings: Automating customer interactions and reducing manual interventions through self-service portals can lead to significant cost savings for insurers.
7. Customer Data Acquisition: Customers are willing to share usage and behavior data through digital channels if they receive benefits like lower premiums or faster claims settlement in return.

This is a digital channel that's speeds up business processes, uses data analytics, and allows insurance providers to migrate from clunky, inefficient, and costly legacy systems.

Summary

Adopting a robust digital strategy is essential for gaining a competitive edge. Insurers are increasingly leveraging digital solutions like self-service portals, automated communications, AI-driven virtual assistants, and mobile applications to meet the demands of modern consumers. These technologies allow insurers to offer services tailored to individual needs, thereby enhancing customer satisfaction and loyalty.

Self-service portals and mobile apps provide 24/7 access and streamline operations, enabling customers to manage policies and file claims conveniently, which in turn helps attract new customers and improve retention rates. 

Automation, through SMS and email, reduces operational costs and processing times, while AI-driven virtual assistants offer instant support, enhancing the overall customer experience.

Embracing these digital solutions is crucial for insurers looking to reduce costs, streamline operations, and stay ahead of competitors. While traditional methods like physical mail are still in use, the focus is increasingly shifting towards digital channels that align with the expectations of modern consumers. 

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