Extreme weather events – "insurance is having a bit of a moment"

Consumers very interested in acquiring comprehensive coverage

Extreme weather events – "insurance is having a bit of a moment"


By David Saric

Public interest in insurance products is increasing due to extreme weather events that have been making headlines globally, as well as news that certain insurers are pulling out of high-risk areas and others are raising rates.

“Insurance is having a bit of a moment,” said Chris Filly, vice president of marketing at FICX.

“For the average consumer that doesn't spend all day thinking about insurance, this is becoming top of mind, and there is some concern around the level of coverage that they had, and the reliability of the insurance providers.”

In an interview with Insurance Business, Filly expanded on FICX’s report that collated consumer insight on how weather events are affecting home, auto and property insurance customers. He spoke about why customer service is so important for insureds during these difficult times, how omnichannel solutions can attract more business and why the industry needs to change its messaging approach.

“Customer service has actually rated fairly well for insurers overall”

According to the FICX’s findings, 56% of respondents said that extreme weather has made them more concerned about the quality of service provided by their insurer.

Additionally, 58% of respondents thought it was very important that they do business with an insurance company that offers excellent customer service.

“For consumers, the great differentiator between these companies is service,” Filly said.

“There’s a number of conscious and subconscious connections in the consumers mind between the difficulty of working with an insurer, the level of service that they receive and the kind of support that they'll receive when they really need it.”

This emphasis on reliability and accessibility led 35% of participants to reveal that despite inflation and the mixed economy, they would be more likely to choose a more expensive insurance company in 2023 if it offered better customer service.

Filly noted that “customer service has actually rated fairly well for insurers overall,” which means that industry-wide efforts to create and sustainable relationships with policyholders is faring well.

Fifty nine percent were satisfied with wait times when calling in to speak with an agent or representative, while 52% rated the quality of service as being very good.

The need for increased connectivity

Carriers that are looking to ease mounting anxiety related to extreme weather losses need to implement an effective omnichannel experience and strategy.

Seventy-three percent of respondents noted that great digital customer service tools are integral to providing great customer service in insurance in 2023.

However, as Filly said, if insurers are looking to create extend their capabilities through digital means, they have to “enhance the human connection and that human service.”

“It's less about automating end to end and more about providing tools that can automate some of the mundane aspects.”

And one aspect of this digital revolution is the ability to contact an insurer 24/7, especially if a loss or claim filing occurs outside of regular business hours.

“As consumers, we now understand that for a company to provide service at scale requires efficient infrastructure and technology,” Filly said.

“Technology is critical for keeping things from falling through the cracks, making sure that every customer receives attention, while the best level of service and support is provided.”

With under half of respondents rating their insurance providers’ tools as being excellent or good, there is still ways in which carriers can improve and refine the customer experience.

Insurance messaging is “not really breaking through to what people care about”

Insurers put a lot of time and energy into creating advertising and marketing material that sparks consumer interest and deviates from the association that insurance is boring or a necessary evil.

However, per FICX’s report, there is a growing disconnect between how these companies promote its products and services and how the general public receives that messaging.

“It’s not really breaking through to what people care about,” Filly said. “Insurance is being viewed as somewhat commoditized.”

In contrast, consumers would rather expect to have meaningful conversations with these carriers, especially during times of great uncertainty.

“They're being more considerate in terms of what types of coverage and who they work with,” Filly added.

“For insurers to really differentiate themselves, not by mascot, they’ll have to answer these tough questions and help Americans get that peace of mind, mitigate their risks, and educate them on how they can be safe.”

While some consumers may not know the specifics about their coverage, it is important that insurers have transparent conversations and clearly indicate both inclusions and exclusions, finding solutions to suit their individual concerns.

“Today's consumer is looking for that transparency and is tired of those kinds of surprises,” Filly said.

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