Derek Eccleston, Director, XI Insights and Consultancy at InMoment
Paul Smith, Global Marketing Director at NPSx by Bain & Company
In the ever-evolving landscape of the UK insurance sector, understanding the pulse of customer perception and loyalty is paramount. This understanding can make or break a company’s reputation and long-term success. NPSx by Bain & Company and InMoment recently released the State of CX: UK Consumer Trends Report, an in-depth analysis of customer perceptions on brand experiences across multiple industries. Drawing insights from the feedback of more than 32,000 consumers, this report is a goldmine of information that sheds light on how brands are faring in the eyes of their customers.
In this blog, we will delve specifically into the UK insurance industry. As we break down the findings from the report, we unveil the strategies used by top CX leaders to achieve a high net promoter score and gain customer loyalty.
What’s the Score for Insurance Brands?
Customer experience is at the heart of every industry, and the insurance sector is no exception. In the study, the average Net Promoter Score (NPS) for insurance organisations was a respectable +14, placing it in the middle among all verticals in the study. While insurance might not be leading the pack, it certainly isn’t lagging behind either.
However, there’s more to the story. One in five insurance customers falls into the detractor category, indicating ample room for improvement within the insurance sector. This presents a significant opportunity for insurance companies to enhance their customer experience strategies.
When we delve into the study’s top performers, NFU Mutual emerges as the leader, followed closely by LV=, Saga, and Bupa. Notably, in the insurance sector, these brands are closely clustered together, with the gap between the top five being remarkably narrow, with only fractions of a point separating them.
What can we Learn From NFU Mutual?
So, what sets NFU Mutual apart and positions them at the forefront of the industry? The answer lies in their clear positioning and focus on their core customers within the farming and rural community, with a strong and well-defined value proposition and exceptional execution of their CX strategies. NFU ranks second for ‘high quality employees’ but interestingly, NFU Mutual does not come top on any individual measure, rather it performs well across all aspects of the customer experience with no apparent weakness. This propels them to the top of the NPS rankings. NFU Mutual has also been recognised by Which? As their 2023 insurance brand of the year.
Insurance’s NPS Drivers
Let’s explore the net promoter score drivers in the insurance industry, which ultimately create customer loyalty:
- Provides Good Value: Customers in the insurance industry value cost-effectiveness. Offering competitive pricing and delivering on promises is crucial to satisfy this driver.
- Makes It Easy to Get Help: Insurance is often associated with complex processes. Companies that simplify interactions, provide accessible customer support, and offer clear guidance tend to perform well in NPS.
- Has Great Product Quality: High-quality insurance products that meet customers’ needs and expectations contribute significantly to loyalty.
Challenges and Opportunities
The insurance industry is also navigating several critical challenges, including climate change, rising cybercrime threats, and geo-political and macro-economic headwinds. However, for the first time, insurance companies have powerful tools at their disposal to address these challenges:
- Big Data: Analysing vast amounts of data helps insurers better understand customer behaviour, predict risks, and offer personalised solutions.
- AI and Machine Learning: These technologies enable more accurate underwriting, claims processing, and fraud detection, ultimately improving the customer experience.
- Blockchain Digital Ledger: Blockchain enhances security, transparency, and trust in insurance transactions, reducing fraud and improving efficiency.
- Digital Infrastructure: Investments in digital infrastructure facilitate seamless customer interactions, from online policy management to digital claims processing.
In conclusion, the insurance industry has made significant strides in creating a more customer-centric experience . By focusing on key drivers like providing value, accessibility, and product quality, insurance companies can enhance customer loyalty. Furthermore, insurance companies that adapt and embrace technological advancements will be better positioned to provide superior customer experiences and thrive in a dynamic industry.