Separating Yourself from the Competition: North America Life Insurance Customer Service Strategy

by Karen Monks,  Colleen Risk, November 21, 2016
Other
North America

Abstract

Celent has released a new report titled Separating Yourself from the Competition: North America Life Insurance Customer Service Strategy. The report was written by Karen Monks and Colleen Risk, both analysts with Celent's Insurance practice.

Customer service is integral to keeping the clients you have. Although life insurance sales have been on an upward curve, organic growth and client retention continue to be critical. More and more, carriers are relying on technology to enable customer service and drive customer satisfaction. Celent surveyed life insurers to understand current and future trends in customer service technology.
 
Insurers prefer to deliver customer services via an in-house customer service center. The service centers that provide the most value are specialized by function. Interestingly, no insurer who is outsourcing indicated that they are getting significant value for the service. The traditional customer service methods of paper, email, and website are used most often. At most insurers, newer technologies such as chat, instant messaging, and mobile apps are in the planning stage.

There is a mismatch between the total IT dollar spent on customer service and the acknowledged criticality of customer service in the insurers’ success and growth.

Insurers expect customer service costs to stay flat or only increase slightly while they significantly increase customer technology spending. This finding represents how automation can improve overall efficiency.
 
“Implementing a digital strategy within the operating environment of a life insurer represents a complex set of challenges: organizational silos, multiple distribution channels, and legacy technology considerations make the work especially difficult,” says Monks, an analyst. “Life insurers have little choice but to make investments in technology and process changes that tackle these issues if they want to keep customers satisfied.”

“Life insurers understand the criticality of an engaging customer service strategy,” says Risk, a senior analyst. “This is evidenced by 93% of them planning to increase their customer service technology spending over the next three years.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

 

Key Research Questions

1

Introduction

2

 

Methodology

2

 

Limitation

2

 

Respondent Demographics

3

Customer Service Strategy

4

 

Delivering Service

5

 

Customer Service Technology Tools

7

 

Satisfaction with Customer Service Technology

9

Investments in Customer Service IT

11

 

Impact of Customer Service on IT Investment

11

 

Customer Service Technology Management

12

 

Future Investments

13

Final Thoughts and Celent Recommendations

15

 

Final Thoughts

15

 

Recommendations

15

Leveraging Celent’s Expertise

17

 

Support for Financial Institutions

17

 

Support for Vendors

17

Related Celent Research

18

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