An empirical study took an in-depth look at the customer journey for insurers. The result is unflattering and shows that digitization does not automatically mean more customer centrality.
With their websites, insurance companies want to provide customers with comprehensive information and ideally lead them straight to a contract—at least in the property insurance segment. A corresponding amount of work and money has gone into building up digital offerings in recent years. How do these solutions prove themselves in practice? The company EPAM wanted to find out and set up a test: 145 people were observed on their digital customer journey on the way to buying insurance online on the websites of 12 insurance companies.
The sushi store performs better
The result of this test might come as a surprise to the insurance companies after all. Because in essence, the result is that the sushi store with its food order is easier to comprehend than the websites of the insurers. While the delivery service scored an average of 90 out of 100 possible points in the test, this was just 43 points for the insurance companies. Now, the argument would be obvious that the product "sushi" hardly needs as much explanation as an insurance policy, if it weren't for the result from the world of banking. The average score there was 76 points, which is significantly higher than the insurance industry's score.
Dangerous overconfidence
In this context, another figure from the report "Insurance: The Digital Paradox"(Download PDF)/selling-insurance-post-covid
)is problematic. While the users apparently have problems with the service provided, the insurance managers surveyed in parallel awarded a score of 78 points, putting them in the same league as the banks. According to the report, the insurers consider themselves to be strongly customer-oriented and give themselves 5.8 out of a possible 6 points in the standardized "UX Maturity Level" score. In fact, however, the offers examined only scored 3.8 points.
With such a discrepancy between self and external perceptions, it is likely to be difficult to identify potentials improvement and implement them. Therefore, one of the report's recommendations is that the management of insurance companies should concretely put themselves in the role of customers to reach an unbiased conclusion about their own instruments.
The report does not criticize the companies' efforts toward digitalization. The digital processes for concluding contracts are there and they work, but they are not understood by the users. It is notable that younger target groups (Millennials, GenZ) also encounter difficulties and would like more support.
This is certainly one of the most important lessons learned from the study, which the authors have also included in the suggestions for improvement. Because despite digitalization, 67 percent of all users surveyed would like to speak with a human advisor before signing a contract. However, only 16 percent of the websites surveyed offered integration of an advisor in the customer channel. Personal consulting and digital channels should not be set up in isolation from one another and seen as competition. Integration would be more productive.
So taking out insurance online remains complicated. Regulation requires a considerable amount of legal and other information, which, however, provoke inquiries. Nevertheless, the report also points out that taking out insurance is not just a rational matter, but must also appeal to a customer's emotional side. However, this should not be overdone. Constantly emphasizing how easy it all is also includes the risk that users will doubt their own abilities if they cannot understand the product or complete the purchase. The next step would then be to try another provider, or to purchse nothing at all.
So there is still some work ahead for insurers. After all, insurance products are not sushi.
Would you like to talk about the digitalization of insurance? Our expert, Karsten Schmitt, Head of Business Development at adesso insurance solutions, looks forward to hearing from you.
