SME Insurance: The Three Golden Rules of Customer Centricity Done Right
Customer centricity is closely tied to success or failure in modern business. What’s the path to success? FintechOS spotted the three golden rules of customer-centricity done right.
Customer experience advocates claim that brands that have superior customer experience bring in 5.7 times more revenue than their competitors. “In an increasingly digital world, digitizing the customer experience is a key priority”, writes KPMG, who point out that InsurTechs are leading the way, “rethinking, streamlining and simplifying the entire customer experience”.
When it comes to SMEs, this underserved segment of customers’ needs an even closer look – the pandemic-induced crisis brought a major threat to the viability of SMEs, which account for 65% of the private-sector employment in Europe.
FintechOS explored the best options to address customer centricity in the new digital economy during a recent webinar, “Customer-centric Business Insurance”. The expert panel included:
- Sarah Kocianski, Head of Competitor Strategy at 11:FS;
- Louise Birritteri, CEO & Founder at Pikl;
- Ruby Hinchliffe, Reporter at FinTech Futures;
- Puneet Bharal, Digital Insurance Solutions at FintechOS and
- Karl Lawless, VP Insurance at FintechOS.
You can read below the main take-aways from the webinar, as well as a golden list of rules for those are determined to create a customer-centric insurer.
Unlocking the SME opportunity
In November 2018 Global Data predicted that the small and medium-sized enterprise insurance market would be worth £8.3bn in 2020. “If insurers want to retain and expand their market share in this sector (…) they need to be effectively engaging with SMEs.”
So, did established insurers and brokers succeed in addressing this huge growth opportunity, and what does “effectively engaging” mean in practice?
It all starts with the mindset, the panelists agreed. Whether it is about product building, selling, customer experience, data management, risk calculations, fraud prevention, innovation, or the business model itself, having a digital mindset and placing the customer at the core are the answers. “We definitely need to be in the digital space”, said Louise Birritteri, CEO & Founder at Pikl.
But “digital presence is not enough – digital mindset is needed”, Puneet Bharal, Digital Insurance Solutions at FintechOS pointed out.
The opportunity predicted by Global Data in 2018 is even bigger now because the digital economy – on the rise since the pandemic outbreak – is bringing more niches that are addressable in a more relevant way. The market is more connected, more global, easier for companies to market new insurance products to businesses, and the resultant power of choice from customers drives further competition and diversity in what’s available.
The demand for digital insurance – on the rise
We live in an era when we expect all the apps and software we interact with to be intuitive and smooth. Elite technology companies experiment through multivariate testing to shape Graphical User Interfaces that are beautiful to look at, informative and require no instruction manual. The biggest and most established brands in the insurance market appear to be lagging in the CX stakes compared to more agile and innovative challenger brands, whose digitally native DNA is more similar disruptors like Uber or Netflix.
Homelyfe, which offers home insurance, has this pitch: “We hear you; no-one likes buying insurance. The least we could do is make it simple. Minimal questions, no paperwork and no fuss.” Quotes take one minute.
Puneet Bharal of FintechOS brings in one of his favorite examples of customer-centric design in digital insurance – CHERRISK, a digital-first insurer, spun-off from UNIQA. “Every part of the company has been thought through from the customer and UX perspective. CHERRISK took a pro-active approach to reducing motor claims losses by combining driver education and gamification to encourage learning. Clients would earn cherry points for completing the training which could be traded for charitable donations or discounts on renewal. The result was better driving and reduced claims. This is gamification done well.”
Lemonade is another well-known example. “Their end-to-end journey and fast payment of claims was great and their digital design appealing to their target audience”, says Louise Birritteri of Pikl.
Ruby Hinchliffe, Reporter at FinTech Futures, recalls fresh news to illustrate the trend. “San Fran start-up Super, which offers customers a monthly subscription to cover repairs and maintenance for electrics, appliances, and plumbing, landed $50m Series C funding (…) So, the big players are clearly seeing the value in this disruption and want a piece.”
But the disruption in the insurtech space is very different from the challenger bank space, she points out. “Start-ups aren’t trying to replace insurers like challengers are banks. The landscape is far more collaborative from the off, and promotes a network approach as opposed to DIY, closed-loop approach”, Ruby Hinchliffe observes.
Customer-centricity – three golden rules
If you work in the insurance industry and are determined to create a customer-centric organization, you can’t accomplish that based on an internally-fixed, siloed, one-size-fits-all approach. You need data. So, before you kick off any initiative, these three golden rules of customer-centricity done right might help you.
#1 CUSTOMERS FIRST
- “Put the customer experience at the heart of every business process, not just the direct customer touchpoints. Listen to your customers, don’t assume you know what they want or need.” – Sarah Kocianski, Head of Competitor Strategy at 11:FS;
- “Knowing your customer – understanding who they are, and their specific needs is key both from insurance product perspective but also for how you guide them through your product journey” – Louise Birritteri, CEO & Founder at Pikl
- “To be successful, customer centricity has to pervade every action and decision in every department because every interaction with the customer, reinforces what the company really thinks of the customer” – Puneet Bharal, Digital Insurance Solutions at FintechOS
#2 CREATE A GREAT CUSTOMER EXPERIENCE
- “(…) This is not just about providing helpful customer service, it’s as much about setting the customers’ expectations of the service and product they will receive” – Louise Birritteri, Pikl
- “Consistency of experience is important. A customer centric company gives the same quality of service when a customer is making a claim or a complaint as they do when making a purchase.” – Puneet Bharal, FintechOS
#3 THINK GOALS, NO PRODUCTS
- “Focus on helping your customers achieve their goals, not creating products for them.” – Sarah Kocianski
- “Providing value – this is not necessarily about price of the product, but about the customer recognizing that they need the product and therefore valuing it” – Louise Birritteri, Pikl
- “Every touchpoint is reinforcement of what the company really thinks of the customer. Is the call center chosen to give the best service at the best price, or is the cheapest option? The customer will experience the difference.” – Puneet Bharal, FintechOS
How can insurers and brokers act?
Firstly, gather a multidisciplinary group to work on digital. This cannot be done in a silo by only technical or only product people: multiple skillsets are needed.
Secondly, don’t let legacy systems hold you back. “Don’t think of the constraints related to legacy you inherited, but think of your customer at every stage”, urges Puneet Bharal.
Ruby Hinchliffe continues: “Some insurance companies got the idea of customer centricity (…) You have to start with the customer – and that applies to every part of the business.”
Thirdly, bring customer data together, and look for issues where “one size does not fit all” or where a lot of difficult customization is needed to find a fit for a customer.
This is FintechOS’s approach: prioritize target markets and create specialized solutions which are designed from the very beginning to be relevant, discoverable, and buyable online (or in-app) and use smart automation and self-service to reduce or eliminate manual administration work.
In other words: think like a digital challenger and grab the SME insurance opportunity before the crowd of startups take over.
Quotes from the webinar
“There’s definitely some element of resistance to change in every industry. I think the way that business lands at the foot of most insurance companies, when it comes from a broker, is very much determined by the broker. So maybe we need to also be asking the broker whether they’re ready to change.” – Puneet Bharal, Digital Insurance Solutions at FintechOS
“I think where we see most innovation is actually less in how people discover products and really in the claims process. Even quite large insurers will now enable you to file a claim online without having to speak to anybody, by using pictures you’ve taken on your phone.” – Sarah Kocianski, Head of Competitor Strategy at 11:FS
“Brokers are still very important in small business insurance. And that’s not because of the products, but because of the relationships, which are complicated. Think about small businesses, particularly on the much smaller end – the people who are buying insurance – their business is everything, it’s their baby – not just their car, for example. So they really want reassurance that what they’re getting is a product that is going to give them the cover and protection they need.” – Sarah Kocianski, Head of Competitor Strategy at 11:FS
“(…) If the insurer is trying to be customer-centric, who is the customer? Is it the insurer or the broker, who brings maybe 60 or 80 percent of their business?” – Puneet Bharal, Digital Insurance Solutions at FintechOS
On customer centricity:
“Customer centricity means putting the customer at the heart of everything you do. You have to start from the customer, whoever that may be, whether it’s consumers or business or the broker.” – Sarah Kocianski, Head of Competitor Strategy at 11:FS
“Customer centricity is a culture, not a project. To be successful, customer centricity must pervade every action and decision in every department because every interaction with the customer, reinforces what the company really thinks of the customer” – Puneet Bharal, Digital Insurance Solutions at FintechOS
“The way that you collect and analyze data is one big part of customer centricity and how you can achieve it. Real-time data can create affordable and personalized products that can keep pace with market demands, accelerating trends and the new risks that go with them.” – Ruby Hinchliffe, Reporter, FinTech Futures
“Knowing your customers – understanding who they are and their specific needs is key both from insurance product perspective but also for how you guide them through your product journey (…) Talking to the customers is the very most important thing that we do. We built that into our design process.” – Louise Birritteri, CEO & Founder, Pikl
MAIN PHOTO Credit: Unsplash
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