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June 19, 2018

Are auto insurers leading the way in innovation?

Summary:

At a time when innovators are trying to start with customers—not with our old ways of doing business—and work backward to what products, processes and systems should be, J.D. Power reports that the customer experience with auto insurers has made marked progress. Satisfaction with auto insurers has actually risen even though prices have been climbing steadily.

What’s the secret?

J.D. Power cites increased digital interaction with customers, especially for monthly billing. The firm says: “Customer satisfaction is at its highest when customers take care of transactions themselves and save the high-value interactions for live channels.” The firm says that 73% of those customers surveyed said they wanted to verify payment receipt digitally, that 70% wanted to pay digitally and that 66% wanted to order proof of insurance cards digitally.

Underscoring the interest in more digital interactions, J.D. Power says that 10% of those surveyed said they participated in usage-based insurance programs, up from 8% in the surveys last year and the year before.

In general, the firm says customers credit auto insurers with being better able to interact via multiple channels, ranging from a face-to-face meeting with an agent to a fully digital transaction executed directly with the insurer, and appreciate the “omni-channel” approach.

The firm concludes: “The auto insurers that increase customer satisfaction across all facets of the customer experience make price just one part of the overall relationship.” (The full summary is here: http://www.jdpower.com/press-releases/jd-power-2018-us-auto-insurance-study)

My take:

The point about self-service is key. It may seem counterintuitive that customers want you to do less and them to do more for themselves, but, let’s face it, companies aren’t much fun to deal with. Customers are told they need to provide their account number, understand many things about your processes, correct errors that companies make in data entry, listen to bad music or obnoxious sales pitches if they’ve called in and are on hold, etc. Who needs it? Customers in all industries have consistently shown that they’d rather handle interactions digitally while sitting in front of the TV or listening to music. So, help your customers help you by having them take as much work as possible off your plate.

J.D. Power sounds a bit too optimistic to me both about how much progress auto insurers have made and about how much more loyal customers will be despite rising prices. It’s still tough out there, and insurers have a long way to go.

But progress is progress, and we should all celebrate gains when we see them.

Have a great week.

Paul Carroll
Editor-in-Chief

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About the Author

Paul Carroll is the editor-in-chief of Insurance Thought Leadership. He is also co-author of Billion Dollar Lessons: What You Can Learn From the Most Inexcusable Business Failures of the Last 25 Years and the author of a best-seller on IBM, published in 1993. Carroll spent 17 years at the Wall Street Journal as an editor and reporter; he was nominated twice for the Pulitzer Prize. He later was a finalist for a National Magazine Award.

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