Building long-term relationships with customers is critical in the competitive insurance marketplace. Customer acquisition costs in the insurance business are high compared with other industries, with research showing it costs seven to nine times more to find a new customer than to retain an existing one.
Customer portals often allow insurers to engage with their policyholders through omnichannel methods. Continuous engagement through portals plays a pivotal role in maintaining ongoing interactions while fostering loyalty and trust. Research from insured.io has shown that SMS messaging reduces cancellations by 52% when a proactive message is sent before a policy cancellation. Customers who engage repeatedly with their insurers’ portal have a 25% higher retention rate.
We live in a digital age where consumers expect immediate and personalized service, and customer portals provide a crucial touchpoint for insurers to meet these demands. Portals not only facilitate efficient self-service options but also enable insurers to proactively address customer needs, lowering dissatisfaction and increasing retention.
By investing in robust customer engagement strategies, insurers can transform passive policyholders into active participants, driving loyalty and long-term retention.
The Importance of Continuous Engagement to Customer Loyalty
Insurers who engage with customers through proactive outreach with positive interactions can increase value and retention. The insurance process has traditionally been a difficult one for consumers, with most interactions being negative ones, like paying a bill or filing a claim. But now, policyholders can easily and inexpensively interact at any time with their insurer through different channels with tailored experiences.
Engagement starts with providing customers with the information they need when they need it, avoiding the frustrations often associated with traditional customer service. A customer portal accomplishes this omnichannel expectation by providing information at the right time through self-service options, and most consumers prefer self-service options. Positive experiences keep customers coming back to engage with the portal, with every interaction an opportunity for insurers to exceed expectations and impress customers.
But it is easy for consumers to lose trust in companies they do business with, and once trust is lost it is difficult to earn it back. Research found 65% of consumers will stop doing business with a company if it does not deliver what it has promised. This fundamental misalignment creates a gap between what a consumer believes will happen and the reality that follows — and in an industry like insurance where consumers have many options, many will shop around for a new company that better meets their expectations.
Some reasons why policyholders lose trust in their insurers after an unsatisfactory digital interaction include poor app performance, inconsistent information across channels, and impersonal interactions.
Re-engaging customers who have had a poor experience or have become less active requires strategic outreach. Proactive communication that feels personal and targeted can bring customers back in, and every time a customer returns to the portal the insurer has another chance to showcase a new feature or benefit. This continuous re-engagement can help maintain customer relationships even when they have stopped engaging.
On the other hand, companies can engage with their customers in some key ways through personalization, including:
- Proactive safety warnings for homeowners when bad weather approaches
- Information about how to protect homes and businesses during hurricane or wildfire season
- Special discounts for policyholders who mitigate their risks through programs like telematics for auto insurance customers
- Updates for customers who have filed a claim, like status changes and important details
- Invoices and policy change notices are sent to customers with links allowing them to pay their bills or access their policies
- Recommendations for additional products, like home, renters, or pet insurance
- Customizable notifications about policy activity sent to a customer’s mobile device
- Access to policy information anywhere, at any time, from any device
Overcoming Common Challenges With Continuous Engagement
The insurance industry often lags behind other businesses in technological advancements, hindering effective customer engagement. This lag can create a disconnect between customer expectations and their actual experiences, but investing in a customer portal can help reduce this gap.
Designing user-friendly interfaces that cater to different customer needs is crucial. Personalizing the digital experience to each policyholder gives the portal a bespoke feel while maximizing the value for the customer. Often, customers do not realize their experience is personalized, but the options and messages they see within the portal are designed to customize their insurance experience and make it seamless. Insurers should exercise caution because a poor design can lead to frustration and mistrust when consumers struggle to perform basic functions.
Another challenge insurers face is balancing communication frequency. Over-communicating can be just as detrimental as under-communicating. Consumers may disengage when there is too much communication, so finding an appropriate balance between sending helpful messages and bothering the customer is key. Insurers can help reduce this risk by considering the timing of their messages. Just-in-time push notifications about policy changes, premium payments, and severe weather are all examples of messaging that policyholders often find valuable.
Emerging technologies, particularly AI, play a significant role in enhancing customer engagement. The use of AI to access and interpret massive datasets of customer behavior is a new frontier for insurance, allowing increased personalization on a entirely new scale, with AI tools being able to assess and predict an insured's need for additional or increased coverage, provide advice on coverages, and enable much more in-depth customer service interactions. completely independent of the need for humans.
The use of AI in this fashion, however, comes with potential challenges. Many companies, particularly regional carriers, pride themselves on their high level of customer service — and finding ways to maintain the "human touch" in AI-based interactions will become a challenge. Insurers will need to find a proper balance of efficiency and humanity in order to stay competitive while also maintaining their same level of customer care.
This is especially true during the claims process, where AI can provide huge advantages to workflows by adding additional context and providing detailed help along the way. But the tool cannot sacrifice the human component of much-needed empathy throughout the claims process. Ultimately AI is an absolute powerhouse of a tool for customer engagement when insurers are aware of the risk of alienating customers.
Customer Portals Build Long-Term Relationships With Continuous Engagement
Continuous engagement through customer portals is crucial for building long-term relationships and trust. Insurers can significantly enhance customer satisfaction and loyalty by offering 24/7 access to information, leveraging multi-channel communication, and personalizing interactions. This positive approach ensures that policyholders feel valued and understood, increasing retention rates.
The goal is to provide a seamless, positive customer experience that keeps policyholders engaged and loyal. As the industry evolves, insurers that effectively implement these strategies will stand out in the competitive landscape by fostering stronger, more enduring customer relationships.
Adapting to technological advancements and continuously improving the digital customer experience will be key to maintaining a competitive edge. By focusing on continuous engagement and leveraging technology effectively, insurers can meet and exceed customer expectations, ensuring long-term success in a rapidly changing market.
External Links:
1. https://www.insurancethoughtleadership.com/customer-experience/lowering-costs-customer-acquisition
https://www.qualtrics.com/experience-management/brand/brand-trust/
Sponsored by: ITL Partner: insured.io
