A Walk in the Customer's Shoes

Celent welcomed 40 property and casualty and life and annuity insurance leaders on February 22 in our New York City offices for an insurers-only peer networking event to discuss the customer experience in insurance.The event was hosted by members of the Celent insurance team: Karlyn Carnahan, Tom Scales, Donald Light, Colleen Risk, and Ed Sullivan.

Karlyn Carnahan kicked off the day by providing an overview of the customer experience. She pointed out that the proliferation of new technology in the past ten years has changed customer’s expectations by providing personalization, instant availability, and direct control over processes. A good customer experience drives customer loyalty and shows up in the net promoter scores and, customers are willing to pay a premium for a good experience. However, customers don’t give the insurance industry high marks today.

Insurers know they need to differentiate with better customer experience to survive. But carriers have been focusing on customer experience from an internal perspective, focusing on optimizing the traditional interactions in the insurance value chain from the carrier perspective. Karlyn challenged carriers to think of a customer centric approach to the experience by focusing on a different value chain that addresses a customer and agent’s changing expectations.

Dan Clay of Lippincott, a Celent sister company, presented a thought provoking discussion on the customer of the future.He encouraged the insurers to think ten years into the future and emphasized that the rate of change is slower now than it will be at any time in our lives. According to Dan, even things that seem scary to us now, like a life that is monitored by IoT devices and ‘likes’ on social media, can provide big business opportunities.

The rest of the day consisted of four sessions which were led by a Celent analyst with an insurance representative from both life and annuity and property and casualty in all but one session.

The first session presented experiences with designing the customer experience.Colleen Risk kicked off the session by asking if customer experience should be considered the next basis of competition. Insurers should strive to provide a ‘wow’ experience for their customers by building on the basics and adding capabilities to move up the pyramid to delighting the customer.

The industry presenters provided insights into their strategy for wowing their customers. The key points were ensuring that everyone in the company understands the customer personas, recognizes the stage of the customer in the customer journey, and strives for transparency. Another important aspect is to have a data first focus – measure everything, reduce friction, target the results, and optimize.

Next up was a panel discussion lead by Donald Light on organizing around the customer experience. Key points from the discussion were:

• Take people out of their comfort zone to increase innovative thought leadership.

• Generate ideas that can be implemented quickly and be willing to fail.

• Resistance will be a part of innovating so be ready to overcome with corporate goals and targets that incorporate customer experience measurements.

Insights into the data driven customer experience were provided in a session led by Karlyn Carnahan. It was noted during the session that by 2020, 60% of small businesses will be owned by millennials and Gen-Xers and data is key to the experience they expect. By cleansing the data, building a use case for the data, and operationalizing the data, the insurer can understand how to react to drive customer behavior.

The final session was a panel discussion about implementing the customer experience led by Donald Light. Each of the panellists stated that customer experience is strategic to their company’s transformation.Key take-aways from the discussion were:

• Don’t be afraid to raise controversial issues.

• Develop the transformation team’s ability to engage with the rest of the organization. You cannot contain the transformation within the team. It permeates across the organization.

• Look outside our industry.

• Get outside of the norm and don’t underestimate what is coming.

Tom Scales led the final session which was a discussion of what is next. The group imagined the future, asked questions of each other, and shared their experiences.

The day was invigorating. By combining property and casualty insurers with life and annuity insurers, start-ups with hundred year old insurers, and business with technology leaders, everyone was able to walk away with new ideas. Celent’s next peer networking event will focus on emerging technologies (IoT, artificial intelligence, RPA, chatbots and blockchain). We will share the details soon and hope you will be able to attend!