A number of KPIs were measured for each service: Overall Satisfaction, Trust, Net Promoter Score, Value for Money and Customer Effort Score. On average, insurers scored 8 out of 10 for overall satisfaction, although it was the banking and finance sector that narrowly came out on top. At the other end of the scale were energy companies and internet service providers.
Despite insurance comfortably outperforming a number of other sectors across all KPIs, it came out rock bottom in terms of future loyalty. Put simply, insurance customers are the most likely to switch providers.
This is highlighted by average tenure, with insurance services filling the bottom three spots; on average, customers have been with their home insurance provider for 6 years, whilst it’s just 4 years and 10 months for pet and vehicle insurance. This compares to over 7 years for ISPs and more than 8 years for energy providers, despite higher dissatisfaction rates.
One of the primary reasons for the lack of retention in the insurance sector is that a majority of general insurance providers have too few ‘touchpoints’ with clients to develop brand loyalty. Most consumers do not need to contact their insurers unless they are making a claim. Often they do not need to within the duration of their contract; therefore, providers get few opportunities to engage with their customers reactively. Subsequently, when consumers come to renewal time, they base their decision primarily on cost rather than being able to compare levels of customer service.
Craig Strudley, Research Director at Future Thinking, comments on the report findings:
“Our findings show that it is difficult for insurers to forge strong relationships with their customers because they have too few touchpoints to build a rapport and loyalty. As a result, customer retention is comparably lower than all of the other services at renewal time; price rather than experience is the key consideration.
Paradoxically, successful claims can help; even though insurers would rather avoid having to pay out, this crucial touchpoint does provide the opportunity for the insurer to interact with their customer. Our study shows that a positive, and in particular, an effortless experience will result in the increased likelihood of retention.”
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