# Retaining insurance customers in a post-pandemic environment
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-12-14
Category: INSURANCE
Category URL: https://financedigest.com/category/insurance
Meta Title: 2020: The Year of Digital Transformation in the Insurance
Meta Description: Discover how the insurance industry is adapting to the changing landscape post-COVID, from customer service digitisation to retaining customer loyalty. Learn
URL: https://financedigest.com/retaining-insurance-customers-in-a-post-pandemic-environmenthtml

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_By **Monica Spigner,** Executive Vice President of Business Transformation at Teleperformance._

The insurance industry has experienced a dramatic wave of change in recent years. Covid-19, however, is both the biggest crisis and most uncertain threat to all insurers to date. According to Lloyd’s of London, [the pandemic is set to cost the entire industry a staggering $200bn in payouts alone](https://www.ft.com/content/51d32286-5264-4c93-80c3-3d0b0fd4558a). This will make 2020 one of the most expensive years in the history of the sector, on par with the huge payouts insurers faced following storms in the [US and Caribbean in 2005 and 2017.](https://www.ft.com/content/51d32286-5264-4c93-80c3-3d0b0fd4558a)

Many insurance [companies are now having to confront an entirely new recessionary market; one of short-and long-term disruption, with businesses striving to ensure operational resiliency, solvency, and adherence to new regulations](https://www.financedigest.com/title-rubber-gloves-market-research-report-2030-top-companies-market-size-and-forecast.html "Rubber Gloves Market Research Report 2030: Top Companies, Market Size and Forecast"). This is no mean feat, considering [insurers also need](https://www.financedigest.com/breaking-down-the-types-of-insurance-you-need.html "Breaking Down the Types of Insurance You Need") to juggle the constantly evolving behaviors of consumers.

How have [consumer behaviors](https://www.financedigest.com/behavioral-biometrics-simple-and-secure-way-to-authenticate-consumers-digital-identities.html "Behavioral Biometrics: Simple and Secure way to Authenticate Consumers’ Digital Identities") changed? Significant declines in the economy and [rising levels](https://www.financedigest.com/uk-new-car-sales-rise-in-november-fail-to-zoom-past-2019-levels-smmt.html "UK new car sales rise in November, fail to zoom past 2019 levels- SMMT") of unemployment have made citizens more brand- and service-conscious before taking the plunge and committing to a provider. Insurance customers, for instance, [have switched providers at a higher rate this year compared to last – with price cited as the main concern](https://www.bain.com/insights/how-insurance-customers-are-responding-to-covid-19/). According to a report by Bain and Co, the switching rate among respondents who requested premium relief was [19% for P&C products and 15% for life products](https://www.bain.com/insights/how-insurance-customers-are-responding-to-covid-19/)—far higher than respondents who did not ask for relief. As a result, [customer loyalty](https://www.financedigest.com/the-problem-with-measuring-customer-loyalty-and-how-to-overcome-it.html "The problem with measuring customer loyalty; and how to overcome it") to individual brands is rapidly evaporating.

As businesses tackle the challenges of moving beyond the COVID era, many providers are on a mission to rethink strategies when it comes to optimizing the [customer experience](https://www.financedigest.com/getting-customer-experience-right-in-financial-services.html "Getting customer experience right in financial services") and rebuilding loyalty.

**Digitize [Customer Service](https://www.financedigest.com/why-banks-need-to-embrace-ai-first-customer-service.html "Why Banks Need to Embrace AI-First Customer Service") Functions**

With younger generations helping older relatives navigate the [digital space, America has seen an accelerated uptick in digital adoption](https://www.financedigest.com/why-banks-cant-adopt-digital-identities-fast-enough.html "Why Banks Can’t Adopt Digital Identities Fast Enough"), across all sectors, with consumers looking to engage with their favorite brands solely via mobile apps, social media and websites. Insurance providers no longer need to compare their front-end [customer](https://www.financedigest.com/how-artificial-intelligence-can-help-improvethe-customer-journey-in-insurance.html "How Artificial Intelligence can help improve the customer journey in Insurance") service functions with other insurers, but instead with giants such as Amazon or Walmart, because that’s the level of service and experience their customers are now expecting.

![Monica Spigner](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/monica-spigner-bio-photo-2-450x635-1736838677680-compressed.jpg)

Monica Spigner

Before the pandemic, around 60 percent of insurance [customers preferred to engage](https://www.financedigest.com/chatbots-the-secret-weapon-to-customer-engagement.html "Chatbots: The secret weapon to customer engagement?") with their chosen provider via voice, followed by email and other web and mobile forms. However, the reliance of voice is significantly decreasing year-on-year, (i.e. 78% in 2017, 70% in 2018, and 60% in 2019) – and is likely to [downward spiral](https://www.financedigest.com/britains-bleak-outlook-sets-sterling-to-downward-spiral.html "Britain’s bleak outlook sets sterling to downward spiral") in 2020 and beyond, as consumers expect faster response times. In fact, in a recent survey over [30% of consumers](https://www.superoffice.com/blog/response-times/) said they expect a response from an organization within 15 minutes or less.

With a surge in customer queries and claims, insurers must look to integrate chatbots, messengers (e.g., Facebook Messenger, and LINE), and video in their customer service ecosystem, in order to speed up response times and [meet customers](https://www.financedigest.com/theres-a-fine-line-between-relinquishing-control-and-accountability-financial-institutions-must-balance-both-to-successfully-cloudify-operations-and-meet-customer-expectations.html "There’s a fine line between relinquishing control and accountability. Financial institutions must balance both to successfully cloudify operations and meet customer expectations"), of all generations, at the right place and time. Reports have found businesses with omnichannel engagement strategies retain [on average 89 percent of their customers, an increase of 56 percent compared to companies with weak engagement](https://www.forbes.com/sites/forbestechcouncil/2018/06/15/omnichannel-cx-how-to-overcome-technologys-artificial-divide-and-succeed-at-being-seamless/?sh=5c66dd253205).

A live chat experience that integrates chatbot technology, for instance, has the capability to handle multiple queries at a very low error rate, without the [need for a human agent to step](https://www.financedigest.com/british-pensions-step-up-multi-billion-pound-asset-fire-sale-as-need-for-cash-soars.html "British pensions step up multi-billion-pound asset fire sale as need for cash soars") in. It can eliminate customers being put on hold, reduce frustration in the customer journey, and [positively impact productivity](https://www.financedigest.com/broadcast-switchers-market-increasing-adoption-of-ip-live-production-technology-to-positively-impact-growth.html "Broadcast Switchers Market: Increasing Adoption of IP Live Production Technology to Positively Impact Growth") by enabling human agents to handle matters that require skill and empathy. Technology, combined with human connection, has the ability to identify and understand the needs and behaviors of customers, allowing [businesses to provide a more valued](https://www.financedigest.com/three-ways-data-unlocks-business-value-for-financial-organisations.html "Three Ways Data Unlocks Business Value for Financial Organisations ") and compassionate experience – which is critical in a time of great vulnerability.

**Personalization is a [Key Business](https://www.financedigest.com/foot-orthotic-insoles-market-to-generate-us-5-billion-by-2026-growth-key-business-strategies.html "Foot Orthotic Insoles Market to Generate US$ 5 Billion by 2026 | Growth & Key Business Strategies") Differentiator**

Now is a great opportunity for [insurers to analyse big data](https://www.financedigest.com/how-data-is-revolutionising-car-insurance.html "How data is revolutionising car insurance") in real time and adapt operations and pricing policies accordingly – this will enable them to provide more personalized customer experiences. According to the Youbiquity Finance report, [80 percent of customers are already craving personalized offers, and 77 percent are eager to provide their behavioral data in exchange for quicker settlements and lower premiums.](https://dataart-dataart.medium.com/why-most-insuretech-connect-talks-will-be-about-personalization-e1d8acf28434)

Utilizing [data analytics](https://www.financedigest.com/the-importance-of-data-analytics-for-success.html "The Importance of Data Analytics For Success ") and having more insight into customer behaviour will allow companies to understand their customers’ online presence, how and where customers engage with them, and how they can adapt to diverse preferences. Data insights are also crucial in [pricing risk](https://www.financedigest.com/putin-sanctions-risk-causing-energy-price-catastrophe-for-west.html "Putin: sanctions risk causing energy price catastrophe for West") more accurately – rather than basing it solely on postcode or age. As an example, telematics offers the ability to pay for [insurance as a car](https://www.financedigest.com/5-tips-for-selecting-the-best-car-insurance-coverage.html "5 Tips for Selecting the Best Car Insurance Coverage") is used, rather than through an annual policy.

**Future-proofing the [Insurance Industry](https://www.financedigest.com/nine-predictions-for-the-insurance-industry-in-2022.html "Nine predictions for the insurance industry in 2022")**

To thrive in a post-pandemic environment, [insurers must optimize the customer experience](https://www.financedigest.com/insurers-ready-to-fight-back-against-poor-customer-experience.html "Insurers ready to fight back against poor customer experience") by leveraging automation and data analytics, to better understand customers’ needs and preferences, and create personalized experiences. Case in point, a McKinsey report highlights that insurers that prioritize customer [experience can generate 2-4x more growth in new business and 30 percent more profits](https://www.financedigest.com/improving-customer-experience-and-profits-with-embedded-payments.html "Improving customer experience and profits with embedded payments") than firms with an inconsistent customer focus over a five-year period. Most importantly, [businesses should see their customer service](https://www.financedigest.com/any-business-can-now-offer-their-customers-financial-services-how-embedded-finance-is-reinventing-the-wheel-when-it-comes-to-banking.html "Any business can now offer their customers financial services: How embedded finance is reinventing the wheel when it comes to banking") agents work together with technology to provide a more personal and empathetic customer experience.


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