Survey Says: Insurer Insights on CX and CCM Adoption

Introduction
Delivering an exceptional customer experience (CX) has become the cornerstone of success for companies across industries. For regulated industries like insurance where service and customer communications are at the heart of their business, customer communication management systems (CCMs) are key to elevating CX to deliver higher satisfaction rates, increase customer loyalty, and solve problems efficiently and effectively.

In this two-part blog series, we will explore the transformation of CX from a generic concern to a data-driven centerpiece of an insurance company's CCM efforts. In today's blog, we examine how CX has become a key differentiator in markets where products and services are hard to distinguish, with a CCM system.

The Rise of CX as a Competitive Differentiator
Across industries, companies are rethinking their approach to customer service, transforming what once might have been a cost center into a strategic asset. Customer service has become the CX. This has prompted companies to look beyond a single department or customer touchpoint when evaluating how they interact and support customer needs, focusing on the totality of the customer journey, and how to earn and ensure brand loyalty.

Analyst data supports this transformation, demonstrating how CX has become a key differentiator in markets where products and services are hard to distinguish. Consider these statistics:

• According to Gartner, 66% of companies surveyed in 2021 said they compete on customer experience, up from 36% in 2010.
• A recent Highland survey of 700 senior business leaders in the US and UK mirrors these results, with 87% of leaders tagging CX as their company's top growth engine. At the same time, one in three said they feel very prepared to address this crucial area by investing in new technology.
• According to recent data from Forrester, a whopping 82% of CX leaders predict budgets to rise in the next 12 months.

The actual cost of subpar customer service is often underestimated. Accenture suggested in its 11th annual Global Consumer Pulse Research report that the cost due to customers switching to other providers could reach as high as $1.6 trillion.

While the CX tools and technologies landscape is vast and complex, insurance carriers faced with CX challenges can start by evaluating the workhorse that handles the breadth and depth of communications with their policyholders: their CCM system.

The CCM/CX Connection
Clear and consistent communication with customers is one of the most important functions of a company, regardless of industry. But when it comes to insurance carriers, those communications are at the heart of the customer experience.

In the insurance industry, a policy document or an update regarding your claim, often containing confidential information, is the only "product" that ever effectively gets delivered to a customer. Insurance providers are therefore selling trust that they'll have their customers' back if something goes wrong. Confusing, inaccurate, or disjointed communication is one of the quickest ways to lose that trust.

Lost trust can mean lost customers, which ultimately translates into lost revenue and added costs. Consider these statistics:

• According to standard marketing metrics, the probability of selling to an existing customer is up to 14 times higher than the probability of selling to a new customer.
• Bain & Company research indicates that acquiring a new customer is at least five times more expensive than retaining an existing one.
• Another Bain & Company and Harvard Business School report says that increasing customer retention rates by 5% increases profits by 25% to 95%.

Given these numbers, it is surprising that more efforts are not invested in enhancing customer satisfaction and loyalty.

That's where CCM systems, with their ability to ensure consistent, timely, and compliant communications, can play a pivotal role in the customer experience, netting improved customer retention, credibility, and profitability.

Chart 1: Insurer Survey Response Data on the Preferred Benefits of a CCM System

The Insurtech CCM Transformation Trend

Survey data from Aite Novarica shows that technology advances, cloud computing, and the drive for greater efficiency are leading companies to explore and adopt modern CCM systems. Specifically:

• Over 40% said they were likely to replace their CCM in the next 12 months.
• This number increased to 49% for insurers with a written premium below US$1 billion.
• Only 37% of the insurers' total communication volume is handled by a specialized CCM platform designed to streamline the process, highlighting the room for improvement.
• Recent industry data suggests that insurers are already heading down that path, in lockstep with their CX initiatives.

The Final Word

With the right CCM system, insurers can streamline and simplify customer communications, empowering them to create, manage, and deliver effective communications to build strong CX and customer relationships. The right CCM system can be the catalyst that elevates these relationships to new heights.

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