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How Amazon is Changing the Insurance Industry

Mar 23, 2018 12:30:00 PM

Growth strategies have changed dramatically over the last decade. While some businesses are reaping the benefits of modernization, others are just now racing to catch up. Unfortunately, in the scramble to boost revenue and increase sales, many companies have overlooked one key factor: the customer.

Consumers have become more discerning in recent years. They have adopted a new definition of excellence, valuing a high-quality total experience over the individual transaction.

Unfortunately, apart from a few disruptors, the insurance industry has been particularly slow to meet these evolving demands. Meanwhile, companies like Amazon have primed consumers to expect a platinum experience in all their business dealings.

The Amazon Effect

Amazon has come a long way since its humble beginnings as an online book-seller. Now the third-largest retailer in the world, the e-commerce leader offers a wide array of goods and services. With the click of a button, you can buy a computer, patio furniture, web hosting, food delivery plan, and nearly any other product, service, or subscription you want.

What’s more, people are willing — even happy — to pay a premium to enjoy that convenient, efficient experience.

But what does this have to do with insurance?

New Standards and Expectations

While Amazon does not directly sell insurance (yet), the internet giant has already set a new level of expectation that affects how consumers perceive businesses across the board, regardless of industry.

The new consumer culture is marked by high expectations of:

Icon - Communication - Amazon EffectCommunication and Accessibility
Amazon example: real-time shipment and delivery updates sent via text, app, and email

Icon - Efficiency - Amazon EffectProcess Efficiency
Amazon example: straightforward search parameters and secure, one-click purchase

Icon - Omni Channel - Amazon EffectConvenience
Amazon example: order and payment history with relevant, easy-click action links such as re-order, track delivery, and return item

While you might not be ready to offer an Amazon-like experience quite yet, if you haven’t even begun to update your processes, you could already be falling behind.

1/3 of all consumers would consider buying insurance through an online provider such as Google or Amazon. Learn more.

Source: Accenture

Thankfully, it’s not all doom and gloom for insurance companies. There is still time to turn things around.

The Insurance Customer Experience

In times of olde, the agent-policyholder conversation began and ended at signup. The only follow-up correspondence involved sending bills, collecting payments, and processing claims. And, in the absence of a bad experience, you could reasonably assume your customers would stay with your company, and maybe even refer a friend.

But times have changed, and avoiding bad is no longer enough. In fact, even neutral is no longer enough. You need to deliver a genuinely positive customer experience (CX). Yet how do you delight your customers and inspire loyalty when your main interactions revolve around the inherently uninspiring subject of payments?

While paying bills is rarely described as “enjoyable,” most people understand that insurance is not only necessary, but ultimately there for their own protection. That being the case, you can provide a pleasant, efficient billing experience that will make an impression and set you apart from other insurance companies.

How to Set Yourself Apart

Every transaction represents an opportunity to build a relationship with your policyholder by creating positive, memorable moments. Engage your customers in Amazon-esque fashion by offering excellence in:

1. Communication and Accessibility

- Don’t make your customers take any more steps than necessary to contact you, pay a bill, or file a claim.

- Maintain a variety of communication channels, both digital (email, social media, text, chat, interactive voice response) and traditional (voice, mail), and respond promptly when needed.

- Treat all interactions as opportunities to enhance your policyholders’ experience with your company.

2. Process Efficiency

- Evaluate your current processes, and identify areas for operational improvement.

- Remove as many obstacles as possible for customers to pay for, renew, or modify a policy.

- Process and pay claims as quickly and seamlessly as possible.

3. Convenience

- Offer multiple payment channels, including web and mobile.

- Make sure your website and payment portals are fast, clutter-free, and easy to navigate.

- Don’t shy away from adopting new technologies to offer your customers more convenient service options.


Real-World CX Examples

CX Win

American Express transformed its customer service policies, re-framing all interactions as opportunities to build positive customer relationships. They began to understand customer needs better, and enhanced technologies and products accordingly. Since adopting this customer-centric approach, Amex has found a 400% increase in retention.

X CX Loss

In 2000, Blockbuster passed up the opportunity to purchase Netflix for $50,000,000, refusing to acknowledge the consumer culture’s growing appreciation for ease and convenience. By ignoring consumer trends, Blockbuster lost its footing in the market and has since declared bankruptcy. Meanwhile, Netflix has become a multi-billion-dollar company.


Conclusion

To successfully win over and retain customers, you need to think beyond your competition in the insurance space. Like Amazon and other winning brands, you must focus on the full customer journey, providing the kind of positive, efficient experience that will keep your policyholders happy and loyal.


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Patricia Moore
Written by Patricia Moore

As the lead writer at One Inc, Patricia is passionate about helping insurance companies successfully overcome modern industry challenges. She offers news, insights, and tips to help insurance professionals improve sales and retention, enjoy greater operational efficiency, and provide the most value to your policyholders.