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Looking to the future: How the insurance sector can meet new customer demands

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By James Harrison, Head of Insurance at Dun & Bradstreet

 

It’s been over two years since the pandemic began, causing significant turbulence for insurers tasked with keeping the weakened UK economy afloat. So much so in fact that, by September 2021, small businesses in the UK had been awarded $1.4 billion in full and interim business interruption payouts – all of which insurers were forced to foot the bill for.

And the challenges didn’t end there, of course. As the geopolitical landscape worsened as a consequence of the Russian invasion of Ukraine earlier this year, so too did the pressure placed on insurance firms to shoulder the growing financial burdens that came with it.

With the global economy still an extremely challenging environment, now is the time for insurance firms to get ahead of the next wave of hurdles, and develop an insurance offering that’s more flexible, digital and forward thinking – not just for their customers, but for themselves too.

In this piece, I’ll highlight some strategic ways insurance companies can evolve to fulfil the new demands we’re seeing in the sector – both now and in future.

James Harrison

Educate your customers

Traditionally, the only interaction between insurers and customers came about because of an incident such as theft or damage. But this needs to change.

It’s important that insurance firms lessen the negative association they might trigger by frequently communicating with customers about the more positive support they offer. This could include working with their broker partners to take on a more robust educational and advisory role with customers.

By proactively educating and supporting customers, instead of playing a reactionary role in times of need, insurers can develop a relationship that’s mutually beneficial.

As a result of taking on a positive advisory role, customers can learn the true value of insurance before an incident happens. For example, insurers must discuss with customers changes they’re seeing in the markets they operate in, and how they can plan for these advancements – helping them foresee any potential challenges and plan accordingly. If we take the ban on oil imports from Russia, insurers should contact clients working in this sector and emphasise the importance of looking for alternative suppliers now and provide them with information on how to stress test in order to mitigate risks – they will appreciate the strategic guidance and it also lessens the chance of future claims.  And firms that offer continual guidance will ultimately gain customer trust and loyalty that will propel their business forward.

Readily provide solutions

As the world has digitalised beyond anything we could have imagined – even a decade ago – and this has created new opportunities, we have seen the evolution of the gig economy. As of March 2022, there were around 4.23 million self-employed workers in the United Kingdom, compared to 3.2 million in December 2000. Since self-employed workers make up a huge percentage of total workers, insurers now need to cater to the specific needs of this demographic by offering professional indemnity insurance cover to limit liability.

We have seen innovative solutions come to market, such as “Working from Home Insurance” but there is still more to be done for gig workers whose independent contractual hours take place outside of the home, such as Uber drivers. It’s time that business leaders be forward-thinking and more agile in providing innovative solutions to entrepreneurs – particularly as the demand for freelance insurance only increases with time.

Be technology-driven

It’s a digital age and insurers aren’t just living in it – they need to be part of it.

And as every organisation works through this uncertain time, insurance firms will have to undergo an ongoing digital transformation if they’re to maintain growth and keep up with higher customer expectations and demands.

It’s now the responsibility of industry leaders to invest in digital technology to enhance operational efficiency and move forward as one. Specifically, investing and implementing AI technology will help with providing instant quotes without the need for firms to carry out extensive underwriting decisions, and can also assist in the renewal probability assessments, and potential premium and policy changes process – streamlining the overall claims procedure and cutting down delays. This will not only deliver a strong customer experience but will also provide firms with a competitive advantage

However, when firms use AI to wade through data and improve operational efficiency, it’s also essential that insurance firms have up-to-date material to drive impactful decisions. This should be a priority for businesses, as more than half (52%) of business decision-makers say their company won’t survive without the best quality data and 67% believe their data is vital to the future success of their business, displaying the need for software to help with the data curation process and uncover actional insight to thrive in a competitive market. Although implementing AI technology is a must, it should be mirrored with the correct metrics if firms are to make a success of this new way of working.

Looking forward

Customers are expecting more from businesses across all industries and the insurance sector is no different.

In today’s volatile economy, even legacy organisations are vulnerable. So, businesses that want to thrive and continue to gain new clients must transform their business processes, provide optimised offerings, and cater to customer demands while providing a seamless user experience.

Now is the time to drive further innovation in the market to deliver on customers changing demands. We have seen smaller innovative players enter the market, such as Zego, Wrisk, Shift Technology etc., but their initiative now needs to become mainstream to keep the sector evolving and pushing forward.

Finance

The penny has dropped – the finance sector needs Data Governance-as-a-Service

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By Michael Queenan, Co-Founder and CEO at Nephos Technologies

 

In our data-driven world, the amount of data is growing exponentially and it’s predicted that the amount generated each second in the financial industry will grow 700% this year. Leaders of financial services organisations have realised two things since the start of the pandemic – that data on their customers and services is their greatest asset and that they must embrace technology to make intelligent business decisions to grow successfully and outperform competitors.

Since the financial sector holds arguably the most valuable and sensitive information, organisations must do more than just store this data. They need to ensure its security, integrity, and governance so that it’s useful in improving the brand’s customer experience, innovating products and services or predicting future trends to improve risk management.

Yet without a robust data governance model – a strong set of rules and processes for what data means, and how it is categorised, owned, accessed, stored, and used – data is worthless. Only when an effective data governance model has been established, will data meet regulations and be secure. Data leaders must shift gear in their data processes to avoid hefty compliance penalties and unlock potential value from their data assets.

 

The data governance challenges faced by financial sector organisations

The barriers for achieving ‘good governance’ are many and varied. Ignorance of the benefits of data governance is a major hurdle for developing a governance strategy. Many financial firms have invested – at significant cost – in data governance tools, but struggle to deliver the benefits they are looking for. Many don’t have the right skills and resources to maximise or set the right metrics to measure the business value. Some are compromised by unoptimised gaps in their approach.

With many different elements to master, data governance is complex – from identifying the right tools to managing the challenges presented by encryption, all whilst ensuring that data quality is sustained and data is managed responsibly.  The negative impact of misplaced investment in ineffective data governance strategies can be significant, for the short and long-term.

 

Why data governance matters

With the acceleration of digital adoption in the financial services industry, it has become crucial to deliver seamless, intelligent customer experiences. Data governance is the key to managing data flow, ensuring compliance, and scaling up. Proof that data governance matters is evident in the Master Data Management Market growth prediction, from $16.7 billion in 2022 to $34.5 billion by 2027.

Data governance is a comprehensive methodology for ensuring the quality and security of the company’s data. The various benefits of an effective data governance strategy include minimised risk, coherent policies, metrics and processes, and better implementation of compliance and enhanced data value. However, for financial services, there are significant advantages as a result of the following:

  • Data governance saves the company money by increasing efficiency. Precious time can be saved by having good quality data and a single source of truth, with less duplication of data, and less time needed to correct data errors.
  • Good data governance gives the business confidence in having accurate and trustworthy data, the holy grail for delivering outperforming customer experiences.
  • A data-driven culture can also be introduced to your business through good data governance. With the ability to gather critical customer and market insights that can guide the direction of your business, data governance allows financial institutions to drive innovation and gain competitive advantage.

 

Bridging the governance gap with Data Governance-as-a-Service (DGaaS)

Increasingly organisations are turning to the ‘as-a-Service’ model to bridge the gaps in their data governance capabilities, as well as ensure critical alignment between objectives and results. This dedicated approach aims to minimise the risk of investments and delivers the strategy and proven technologies required to ensure data governance success.

DGaaS can be applied across each major component required to deliver good data governance. First, it uses software tools to scan all data within a typically complex financial services data infrastructure in its data discovery and classification phase. Without this detailed insight, organisations can’t always identify their data assets, any data mishandling and the level of risk generated.

The next part of the process is creation and documentation. This means organisations can drive their governance objectives through to execution, while removing the operational and recruitment overheads, which means they can purely focus on value created from data. In doing so, organisations can convert the raw outputs from the toolsets into meaningful business outputs.

With a holistic approach, DGaaS allows financial services organisations to focus on the transformational potential of data while critically staying compliant.

 

Reaping the benefits

Data is a vital asset to enable financial sector organisations to build the right capabilities to deliver their services and remain competitive. With a robust data governance model, financial firms can assess risk, predict trends, and seize market opportunities based on data-driven insights. Only data-driven processes, built on high quality and effectively governed data, will enable them to build outstanding customer experiences. It’s essential that leaders realise data governance is a fundamental discipline, not a luxury, and establish an effective model to formalise processes and responsibilities before their data lets them down.

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Seven tips for financial services brands using mail

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By Cameron Russell, Head of Marketing at Marketreach

 

Customer experience (CX) is a powerful differentiator for modern brands. If customers have a series of positive experiences with a brand, they will buy more, be more loyal and become advocates who influence their surrounding networks. In fact research from Gartner finds it to be the most important competitive battleground for 89% of companies.

Recent research from Trinity McQueen, commissioned by Marketreach, shows that functional teams – whose members come from different organisational levels – often have specific communications with customers. Yet they might not realise the importance of look, feel, content and tone in reinforcing the brand when they send out mailings. It’s essential that organisations recognise the role of all communications in building good customer experience and their brand – and this includes the use of mailers.

The marketing team isn’t the only representative of the brand – teams across all organisational levels need to be considered. Simplifying internal processes ensures marketing and functional teams remain aligned. Establishing a designated ‘owner’ should also be considered.

Cameron Russell

Customer experience is the sum of all the sensations, thoughts, feelings, and reactions that someone has in response to a brand. A good experience comes from speed, trust, consistency and convenience – and knowing when to use technology and when a more human touch is preferable.

People want to feel valued by the brands they engage with. And a powerful channel for this is Customer Mail. Mail provides a differentiated way for businesses to deliver their messages. It is a channel that offers unique benefits thanks to its tangibility, trustworthiness, and the way customers appreciate and interact with it.

Customer Mail is an important part of the overall brand experience for banking and financial services brands. So how can brands leverage this medium to make more of an impact on their customer experience and retention?

 

#1 Use simple language

Never underestimate the power of plain English. Especially when you need your customers to pay attention and retain the information you share.

TSB wanted customers to read their contract terms & conditions (T&Cs) because they protect them. Most T&Cs are dry, hard to understand and consequently go unread.

Knowing this, TSB humanised its T&Cs and adopted a warm tone, clear language and simple icons. The bank helped make customers feel valued by creating something easy to understand, that makes banking better, and changes how clients bank.

When asked, 82% of customers agreed it was easy to understand the changes. So much so that it received its first ever thank you letter for a T&Cs document!

 

#2 Use it at the right time

Customers are now in control of their relationship with brands. Expectations have shifted – and brands are judged on how well they meet these expectations.

Customer Mail works best when it is used in the right moments. So if you are sending information which is important, complex or requires attention and action – Customer Mail is particularly effective.

Its physicality sends an immediate message. And people are twice as likely to understand complex information when it is in physical mail as opposed to digital. Moreover, it requires less follow up and reduces possibility for missed information.

When asked about specific recent communications by mail or digital channels, 57% of respondents to Marketreach’s research said that they are less likely to miss something if it comes to them in a physical format. By increasing consumer understanding and confidence, mail can help to reduce costs and lost revenue by lowering calls to contact centres, missed appointments or even customers lapsing.

 

#3 Surprise and Delight

Three-dimensional, physical objects have innate sensory power. Mail’s tactility can evoke specific feelings and images associated with the brand through creative and considered uses of messaging, paper quality, print, finish, and stunning visuals.

EE needed to improve its welcome journey for customers. Research told them their Net Promoter Score (NPS) dipped after the first impression and continued to decline. One reason was the mailing containing a customer’s brand new, shiny phone showed up in an unmarked, scruffy, slightly damaged bin liner-looking package. Certainly not befitting the UK’s number one network.

EE upgraded the welcome mailing, switching to premium materials and including a link to an augmented reality video featuring Kevin Bacon talking through some of the extraordinary things customers could do with EE.

With over 175,000 AR views, EE outperformed the market during the campaign duration in ‘Better level of service’, ‘Reliability’ and ‘Customer service’.

 

#4 Personalise

Personalisation is table stakes in modern marketing. But doing it right still gives brands a boost in the minds of consumers. Neuroscience research conducted by Neuro-Insight in Marketreach’s  ‘Why Mail Cuts Through’ report shows that personalised mail from companies makes them feel valued more (70%) than email does (30%).

Waitrose recognised that its loyal customer base was eroding. Its solution was to introduce a new programme – Just for You, Best Customer – which rewarded high-value customers. It sent targeted, personalised mailings 5-6 times a year, offering vouchers or incentives based on shopper history. Voucher redemption was over 50% and Waitrose’s net promoter score (NPS) increased by more than 55 points.

Banking and finance brands could employ similar tactics in situations that demand loyalty.

 

#5 Use in combination with digital

Mail and digital used together deliver a powerful partnership because they are distinct channels with unique strengths, when used together they reinforce and enhance each other. Businesses should not see mail and digital as interchangeable channels, but as complementary ones.

Marketreach’s research from Neuro-Insight – which used neuroscience to investigate the effect on marketing channels – showed that physical and digital channels together are more than the sum of their parts. For example, a person who has seen a piece of mail from a company will look at a social media ad from the same brand for 30% longer. And the memory recall of a social media ad is given a 44% boost by a person who has already received mail from that brand.

 

#6 Enable behaviour change

Mail is particularly useful in situations requiring multiple steps – it provides much-needed clarity when a range of options are available. Recipients are encouraged to make behavioural changes.

Thames Water leveraged these qualities effectively. It found that customers were flushing cooking fat and wet wipes down drains, causing blockages and sewage back-ups at their homes.

Thames Water created an integrated campaign, Bin It, Don’t block it, and sent a mailing to over 260,000 households in the highest risk areas. The information pack included a free cooking fat trap, which created a strong visual reminder every time the resident used the sink. It is at such key moments, when ‘the brand is in the hand’, that physical mail can really outperform digital in responsiveness.

The result was a 26% reduction in sewer blockages in targeted areas – with 70% of residents surveyed after saying they had changed their behaviour.

 

#7 Design matters

You don’t get a second chance at a first impression.

Design matters because it reinforces a customer’s experience of the brand in a sensory and significant way. Mail design has been measured and proven for decades, and this learning is especially critical to spur successful CX. Everything about the communication is reinforcing the brand through colour, tone, message, imagery, design and production quality. It should be produced to the same standard as all brand messaging.

 

Sealed and delivered

Experience is the most decisive battleground for brands and consumers. And shaping this isn’t the responsibility of just one marketing team – or just one marketing channel.

Mail isn’t a one-stop-shop or fix-all channel. And no medium is. But mail is a strong channel for informing action and facilitating specific responses from customers. For financial services and banking brands, mail is a trusted media that shows customers you care and that you value them. And as a result it can help to forge loyalty. It is a compelling means for the right message to appear at the right time – when it is done right.

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