Understanding customer preferences, needs and behaviours has long been a strategic priority for insurance companies. In recent years, customer preferences have changed quite dramatically, especially in the personal lines space, thanks to the rise of the internet, social media, and instant self-service tools that are nurturing consumerism via online channels.
Consumers today expect the same level of service from their insurance company as they would get from a technology giant like Amazon. This was a growing trend long before the coronavirus pandemic struck early in 2020, and it will likely remain a trend once the pandemic has been and gone. What this past year has taught us is that digital tools are enablers for business, even when normality (as we previously knew it) is locked down.
SGI Canada’s chief customer officer Paul Mlodzik recently shared some proprietary data around customer preferences amid COVID-19 during a breakout session at the IBAO annual convention. The purpose of SGI’s research was to find out how customers have responded to the pandemic, what their top concerns are, and how insurers and brokers can best address those concerns.
One question SGI asked consumers was: Have your insurance needs or preferences changed as a result of the pandemic? The overwhelming answer was ‘no’. Mlodzik said that response wasn’t overly surprising because of the fact that consumers will always need insurance for their homes, cars or businesses, whether or not there’s a pandemic.
Those respondents whose needs did change tended to have very particular needs, according to Mlodzik. A lot of them were small business owners – arguably, those hardest hit by the economic impacts of the pandemic – whose needs changed because their businesses were interrupted, or they had to lay-off staff, or make changes to their equipment or their premises.
“The interesting thing about this is that the key to meeting customer needs during the crisis for the insurance industry is just being available to them,” said Mlodzik. “They don’t want interruption in service, regardless of the fact that there’s a pandemic going on. In fact, they might need additional reassurance during a period of time like this. They might need to be reaching out and asking you questions about their coverage. Maybe they want to take a car off the road; maybe they’re not sure what they’re covered for. And this is a time to ensure that you maintain those relationships as much as possible.
“Interestingly, in a low involvement category like insurance, it’s not like cars or entertainment – they don’t expect you to go above and beyond. For them, going above and beyond is making sure that you’re available. It’s just being there for them, and that really sets you apart from some of the other businesses they’re dealing with.”
The COVID-19 pandemic has caused the curtailing of face to face services. This is something that, in the past, brokers have really thrived on. SGI Canada asked consumers how important they thought it was that insurance services are offered in person. The insurer asked: When COVID-19 is over, or it starts to resolve itself, what transactions do you really need to do face to face?
“When it comes to claims, people really believe they want to have interaction. This is the moment of truth for them. Whether they need to have a claims adjuster visit them or whether they want to visit their broker to talk through something, this is really the important part of the face to face culture,” Mlodzik explained. “Interestingly, when you look at either purchasing or servicing their insurance policies, it’s much more split. This has been true about the insurance customer for at least the last seven to 10 years - they want choices, and they want to be able to pick and choose how they interact with you. You hear a lot about omnichannel in this respect.
“Different people will have different preferences at different times depending on the intensity of their transaction. If they want to make a payment or do something relatively minor like add a minor coverage, they will often be OK doing it over the phone or doing it online, but when they want to do something for the first time or have to make a major decision, they want access to the person. Oftentimes, that is in-person or they consider talking to their broker directly as being personal service as well.”
For obvious reasons, there has been a mass migration to online and telephone interactions during the pandemic. SGI Canada has seen anywhere from a 250-350% increase in people using its online or call centre options to reach out. This does mark a change in habit, and it’s something that will likely continue going forward.