[PPT] - CUSTOMER EXPERIENCE IN INSURANCE Why it matters. How to create it. PowerPoint Presentation

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CUSTOMER EXPERIENCE IN INSURANCE Why it matters. How to create it.

INTERNATIONAL INSURANCE SOCIETY GLOBAL FORUM JUNE 2019

Bernhard Kotanko, Senior Partner based in Hong Kong (bernhard_kotanko@mckinsey.com)

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Customer Experience

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1. Why Customer Experience matters
2. How to create great Customer Experience

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Customer experience leaders clearly outperform across KPIs

Premium growth 2013-15, CAGR 21 24 Customer experience leaders Customer experience laggards 7 4 Customer experience leaders Customer experience laggards

SOURCE: McKinsey insurance database, DISQ customer satisfaction score, team analysis

Employee satisfaction NPS

Insurance companies

▪ Increase in customer loyalty ▪ Higher success rate for cross-selling

activity

▪ Benefit from positive referrals ▪ Better and more proactive customer

feedback

▪ Increased loyalty to insurance company

Employee satisfaction

Gross cost ratio 2013-15, CAGR

▪ Increase in once-and-done processes/

solutions

▪ Reduction in call center volume due to

better client steering/information

▪ Higher rate of straight-through

processing/digitization

Costs Growth

SAMPLE MARKETS Note: "Leaders" and "laggards" defined as top/bottom 3 in sample, P&C motor, excluding direct players

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High customer satisfaction driving economic impact for insurers

100 156 191 Detractors Neutrals Promotors +91% T/d NPS

SOURCE: McKinsey Customer Experience Survey in Insurance (Germany, France, Italy, Spain, UK)

100 93 70 Neutrals Detractors Promotors

30%

T/d NPS Detractors based at 100 Likelihood of cross-selling Detractors based at 100 Likelihood of churn

INDICATIVE

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Insurance often not great in creating Customer Experience E.g. Life insurance Europe NPS

SOURCE: McKinsey Customer Experience Survey in Insurance (Germany, France, Italy, Spain, UK)

1 1 1 1 2 11 13 24 25 11 10 9 1 6 2 3 7 5 4 8 10 Neutrals (49%) Promotors (21%) 74

9

Life Drill down of Life T/d NPS % Detractors (30%)

INDICATIVE

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Great Customer Experience requires specific ingredients

Key ingredients Example Convenient means of interaction for/with the customer Flawless delivery of product/service to the customer Emphatic communication and connection towards the customer Proactive transparency towards the customer Unexpected "wow-moments" where it counts for the customer Insurance Non-insurance

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Proactive transparency E.g., notification of loss is simplified through Farmers icon-based app

SOURCE: company website (http://bit.ly/2dZnYLY and http://bit.ly/2dFeimq) 7 McKinsey & Company

Claims app simplifies notification of loss for the customer, collects all required information and establishes connection to the customer for effective digital case steering Core functionalities comprising:

Intuitive icon-based
nline FNOL
Log-in via policy

number required

Push notifications

and tracking of claim’s status Live-support via claims handler:

In case of questions

customer can get assistance via „SOS-Button“

Live video-call with

claims handler to resolve questions

Claims handler can

take control of customer‘s screen Intuitive claim notification

ffered across all

channels – also for agent

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Key advantages

▪ Complete onboarding process and payment in less than 5 minutes ▪ Personalization based on chat-bot, creating a sense of connection with the company ▪ Easy policy individualization at the end of the process, all in simple language ▪ Fast payment process seamlessly leading over to policy administration through the app

Sign-up directly through the Lemonade App available in the iOS store Usage of chat-bot for a conver- sational user experience and a feeling of personalization Immediate price calculation and payment – additional features and add-ons are easily added

Convenient means of interaction E.g., easy onboarding customer journey at Lemonade

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Key advantages

▪ Reduce complex constructs to key elements concentrating on what is really important ▪ Reach a broader target group ▪ Ensure that the message is understood and remembered by the audience

Put yourself in the audiences' shoes and start with their need Address what the customer is interested in, not what every technicallity Decompose the topic to follow a clear, intuitive structure Be fun and memorable

Emphatic communication and connection E.g., life Insurance explained by DBS

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Unexpected "wow-moments“ E.g., Ping An using gamification and rewards to foster safer driving

SOURCE: company website

Today Fuel consum- ption rating Average speed Cumulat ive time Driving mileage

Huacheng Road

Jiefangzhuang North Street

Achievement

You’ve accumulated 4,000 points, Equal to RMB 8 premium 500 points=RMB 1 Settled each Sunday

Claimed Claimed Recorded 3 days’ mileage last week May earn 1,000 points

Record 0 day this time (0 point) Next goal: 3 days (1,000 points)

Score of last week: 100 May earn 3,000 points

Score of this week (0 point) Next goal: scored 60 (500 points)

Share

Behavioral approach geared towards incentivizing safer driving:

Leveraging smartphone sensors for

collection of driving behavior data

Analysis of driving behavior and

calculation of driving behavior score

Transparent weekly tracking of

driving behavior score

Cash-back offering for accumulated

“good driving” points Behavioral approach towards safer driving lowers total damage value by reducing both frequency and severity of accidents

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How to create great Customer Experience in insurance

Build aspiration & purpose Transform the business Ensure sustainable operations

B C A

Set aspiration and purpose Re-design/innovate product/service experience Ensure sustainable ops (culture, capabilities, governance, operating model, performance management) Best-in-class customer experience

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CX Ambition E.g., role modeling “Customer Obsession“ at Amazon

“Leaders start with the customer and work

backwards. They work vigorously to earn

and keep customer trust. Although leaders pay attention to competitors, they obsess

ver customers”

A

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CX Ambition Key learnings from >100 cross-industry CX transformation projects

SOURCE: McKinsey Customer Experience Practice

Leaders need to be obsessed with the customer There must be a clear benefit for each employee Experience is a transformation effort Performance needs to be discussed on individual level Create ownership

n all levels

It needs constant reminders Skill level specific training is essential Rather 80/20 instead of the full list

A

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Transforming customer journeys “Design Thinking” approach for end-to-end transformation

IMMERSION Understand weakness

f status quo journey

IDEATION Develop an aspirational target journey ITERATION Continuously refine the target journey

▪ Development of in-depth

understanding of status quo customer journeys and relevant pain points

▪ Integration of customer journey

mappings and “CX Insights” to understand satisfaction drivers

▪ Design of detailed aspirational target

customer journey blueprint

▪ Synthesis of improvement levers into

(digital) asset landscape

▪ Design of customer journey mock-

ups/workarounds

▪ Continuous collection of customer

feedback on customer journey blueprint

▪ Iterative improvement and

advancement of customer journey and mock-ups up to final design

B

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Sustainable operations Multiplication of new customer journey x technology x usage

× = Realizing impact B

Fast and efficient development of new ways of engaging with customers end-to-end Development of new journey Assuring usage of tools and living new journey by employees and customers Usage of tools and living journey

C ×

Multiplicative logic Impact can only be realized by taking care of proper tool development and at the same time scaling usage by end users

A

Creation of technological foundations Building of IT architecture

C

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Sustainable operations Effective Customer Experience measurement needed far beyond NPS

Topline metric Does the topline metric align your organization around a single shared goal? Culture and capabilities Does your organization have the key enablers to

perationalize your

measurement system? Customer feedback system Does your system enable your organization to capture, analyze, and act on customer feedback? Integrated measurement model Does your organization understand and prioritize journeys, key touchpoints, and satisfaction drivers?

C D B C A

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Recap: How to create great Customer Experience in insurance