Four Steps to Perfect Insurtech Customer Experience Metrics

We’re going through a period of real change in the UK insurance industry. Over the last few years, the rise of comparison websites and willingness to switch providers has seen the balance of power in the relationship tip towards consumers more than ever before.

This has now been underlined by new FCA legislation, which states people cannot be charged more for a home or motor insurance renewal than a new customer would. This acts on strong consumer sentiment, with research showing that insurance policyholders in the UK feel they have not been rewarded for their loyalty to insurers.

It’s not just cost UK consumers are unhappy with, however – it runs deeper than that. The research shows almost three-quarters of them believe customer experience has stood still for the last five years. This means tracking customer experience KPIs has arguably never been more important for insurers – paying lip service is no longer good enough, as unsatisfactory customer experience (CX) is now being called out. But without the right checks and measures in place, they will struggle to measure customer sentiment and set goals and targets to improve CX.

The metrics minefield

However, many insurers find it difficult to reach an agreement on what metrics to use, as there is a huge range available. The field is so wide that Gartner says most organisations with a revenue of more than US$1bn use more than 50 CX metrics – and some use four times that amount.

So how can insurers see the wood for the trees, and find the most relevant metrics within this long list? Here are four key steps for them to follow:

1) Run an audit

First of all, they need to understand exactly what CX metrics are currently being used across the organisation. They need to find out what is being measured, how the metric is calculated, and who is responsible for improving it.

This process will likely start with the more traditionally KPI-driven departments, including marketing, sales, customer service, supply chain and general operations. However underwriting, billing, and digital claims will likely also track their own CX metrics too, and these should also be taken into consideration during the auditing phase.

It’s likely a large number of metrics will be gathered by the audit. To avoid becoming overwhelmed, these can be grouped into four key categories: customer satisfaction, customer loyalty/retention/churn, advocacy/reputation/brand, and quality.

2) Create a hierarchical dashboard

It’s likely individual departments will be laser-focused on their own CX metrics, but for insurers to improve their overall customer experience, employees must have sight of performance across all departments and lines of business. Having this overview will give employees a true understanding of customer experience performance across the wider business, and how it could impact their interactions with customers.

To give them this bird’s eye view, insurers need to pull together all the metrics found during the auditing stage and create a dashboard. This will provide a number of different viewpoints and measures of current performance, all in one place.

There’s no fixed format to follow here, but it can work well to have a handful of high-level metrics towards the top that is of most interest to the operating committee, such as overall customer satisfaction scores. Typically, these kinds of metrics are the more operational measures used by different departments.

3) KPI prioritisation

Now insurers need to put themselves in customers’ shoes, sorting KPIs from most critical to least critical from a customer point of view. This may sound obvious, but to date, many organisations have an inside-out approach to metrics, which makes assessing customer experience much more difficult.

All too often, insurers purely focus on meeting business goals such as lowering costs or boosting revenue, rather than directly helping customers. However, by taking an outside-in approach, the customer comes first, making it more likely that the organisation will focus on directly helping them with products and services.

4) Step away from executive-level metrics

Board-level executives are naturally focussed on the ‘big numbers’ - asking for an improvement in Customer Satisfaction (CSAT), Net Promoter Score (NPS) or Customers Effort Score (CES). In practice, however, it can take a few years for insurers to move themselves up to the top of the industry tables on these fronts, so they are much better off focussing on short-term gains and working on a number of lower-level CX metrics.

By focussing on a more specific set of metrics, the risk of failure to improve is lowered, and often these seemingly smaller improvements add up to boost the top-level CX metrics at the same time.

Driving real improvements

If they can follow these four steps, CX metrics will no longer be a headache or burden to insurers – instead they can give everyone across the business a true picture of what is happening, and be the driver for positive change. Where insurance was once a fairly static, reliable industry are gone – whether, through customer empowerment or Government legislation, insurers who do not give customers a fair deal and a great experience are seeing the number of policyholders shrink. By monitoring and working to improve the right metrics, however, they will be in a position to turn the tide and be confident things are moving in the right direction.

About the author: Andi Dominguez is the Global Insurance Principal at Quadient. She has almost two decades of industry experience.