How insurers are seeking to deliver a first-class customer experience

Proactive communication between the insurer and the insured is the likely reason for an increase in customer satisfaction with small business insurance companies in 2022 despite policy price increases, according to a J.D. Power study.

"Customer satisfaction among small businesses has increased this year in all areas we measure despite a near-record level of rate increases across the ten years we have conducted this research," said Stephen Crewdson, senior director of global insurance intelligence at J.D. Power.

The study noted that clients who receive advanced communication of a premium increase are equally as satisfied with the insurer's customer service as those who did not receive a price increase at all.      

Read more: State Farm, Chubb, Nationwide rank highest in customer satisfaction: J.D. Power

Delivering a top-notch customer experience has become a non-negotiable for insurers if they want to retain their share of business in a cutthroat marketplace. 

"The insurance industry is highly competitive, with many companies fighting for market share," said David Antoline, president at Active Digital. "Therefore, it's imperative that they deliver best-in-class customer experiences while driving efficiency and providing personal, customized service. 

To identify the type of experience customers want from their insurer, Active Digital conducted a study with Harris Poll, which highlighted the importance of personalized digital communication and the value of fast virtual insurance processes among other findings.

Read more: Why improving customer experience helps consumers, employees

Whoever said "you never get a second chance to make a first impression" could have been talking about how an insurer responds to a First Notice of Loss: do it well and you have gained a loyal customer for life, do it poorly and your reputation is shot.   

But the way an insurer handles such "moments of truth" has just as much potential to satisfy a customer, says Darci Darnell, co-author of a Bain & Co. report on Customer Behavior and Loyalty in Insurance. Indeed, the secret to success is managing every customer episode well during the lifetime of a policy.

"Customers don't report incidents or file claims very often," according to the report, but have many less consequential episodes, such as a request to change a billing address. Loyalty leaders "work hard to constantly improve the customer experience for all episodes." 

Read more: How can insurers improve customer satisfaction