Customer satisfaction isn’t something that resonates when we think about insurance companies, so what are they getting wrong? Karen Wheeler, Country Manager and Vice-President of Affinion UK, here presents for Finance Monthly 4 ways insurers can improve customer fulfilment.

The insurance industry didn’t have much cause for celebration when the Institute of Customer Satisfaction released its latest Customer Satisfaction Index. In a survey of over 10,000 UK customers, the sector faced the unenviable accolade of being the only sector not to improve its satisfaction index score compared to the previous six months. In contrast, banks, leisure and telcos were some of the sectors to show improved levels of customer satisfaction. This bad news was echoed by research by The Actuary, which revealed 27.9% find the insurance sector the worst when it comes to customer service.

So, for an industry which is notorious for low customer loyalty and bad service, what can providers do to build better relationships with their customers?

  1. Stand out in a crowded market

The challenge insurers’ face is that they operate in a highly commoditised environment, with customers faced with a sea of overwhelming choice. And the truth is that customers are often only basing their choice on price. According to research by Marks & Spencer, 95% of respondents stated that price was one of the most important factors to them when deciding which insurance provider to choose.

Insurers also know their customers will typically only make contact when they either need to make a claim, or renew a policy. And making a claim usually happens at a point of crisis, for example theft, damage or loss – when people are, understandably, feeling worried about their possessions, health or family.

These factors combined means insurers need to work hard to differentiate themselves from competitors by engaging with customers in a positive way, and finding new reasons to be a part of their lives. For example, thinking beyond the traditional, physical products insurance policies cover – homes, cars, phones – to solutions that can help customers keep their personal data safe online.

  1. Deliver the right digital service

In a world where we live our lives through our devices – using apps to transfer money, ordering shopping to be delivered on the same day – it’s clear that insurers need to keep pace with the digital age. However, there are still improvements to be made, a recent survey by Eptica found the UK’s leading insurance companies fail to accurately answer more than two thirds (68%) of routine questions asked through the web, email, Twitter and Facebook.

Looking to the US for inspiration, digital insurer Lemonade is making waves for its digital-first, fuss-free approach to claims. At the start of 2017, its virtual assistant Jim set a world record as it reviewed, processed and paid a claim in 3 seconds – with no paperwork. If all insurers can aim to deliver this level of service, which brings cost and time-saving benefits to consumers, this could lead to increased engagement, loyalty and advocacy.

  1. Think outside the box

Many people take out insurance policies and never have to make a claim. The appeal of a policy is the peace of mind it offers; consumers feel better knowing that if the worst happens, they have the support in place to help them. Of course, it isn’t just physical possessions – houses, cars, phones – that people want to protect.

With cyber hacking scandals hitting the headlines every week, consumers are increasingly aware, and worried about, the threat of online fraud. According to research by Callcredit Information Group, 66% of consumers perceive the risk of identity theft and online fraud as one of their biggest concerns around sharing personal information online.

As the old saying goes, prevention is better than cure – and this is certainly the case when it comes to online fraud. If a hacker finds out the password a person uses across several sites, it can quickly snowball out of control. This is clearly a risk many take, with Callcredit also revealing less than half (49%) of consumers regularly change their passwords as a way to prevent fraud.

  1. Become their digital guardian angel

So what can insurers do to help their customers? When you consider the perception consumers’ have of their insurers as guardians of their belongings, there is a natural role they can play in helping customers to prevent and detect fraud incidents before they have even occurred – and help assist and resolve issues if they do arise. For example, providing cyber prevention and detection services that continually monitor their customers’ activity online and flags incidents when they’re at risk.

With insurance often seen as a necessary, but not particularly enjoyable part, of life, insurers need to think beyond their remit and consider how else they can add value and benefits to consumers’ lives. That way, they may well move up the table in the next Customer Satisfaction Index.