Amanda Fox, Chief Customer Officer (CCO) at Markerstudy Group
There are some key factors affecting companies in the financial services space right now – particularly the rising cost of living crisis on customers and the new Financial Conduct Authority (FCA) Consumer Duty regulations which requires agents to meet the needs of customers, particularly ‘vulnerable customers’.
Cost-of-living pressures and FCA calculations show more than six million people cut or cancelled insurance cover in the six months to January 2023 to save money.
Putting customer needs front and centre has never been more important and there’s clearly a challenge for all financial service providers, including insurers, to make sure their products are in step with issues customers are currently facing, while maintaining a regulatory focus on customer-centricity across all lines.
Customer-centricity must be built into product offerings and pricing
There is a definite trend for customers to try and save money on insurance products that are a legal requirement, such as motor, and to increase cancellations of products such as home insurance.
The lesson here for insurers and brokers is always to be looking at how we can support those people who are in financial difficulty in terms of product design and the claims process.
Taking the scenario to its conclusion, the result is customers completely cancelling policies that may lead to large costs for uninsured damages such as home and contents. You never know when something might happen in your home, such as fire and/or flooding.
So here we should be asking, should there be some type of minimum coverage offering to accommodate those struggling with monthly costs?
Striking a digital balance for all ages and capabilities
End-to-end touchpoints with policy selection, implementation, ongoing customer service, and claims is definitely becoming more tech-enabled. This again reflects consumer preferences –but one-size or one-channel definitely doesn’t fit all.
When responding to a customer needs, we should take into consideration all aspects, such as how tech-savvy people are and use of language so customers are completely clear on what they are buying.
Financial services products span a wide age range of customers with differing levels of understanding – some products can span 17-80+. So, all options must be considered when we’re looking at how far we take the digital interaction with the customer.
Employees – get them on board the customer-centric journey
For me, the culture of customer centricity must come from the top. It is a key part of the role of the CCO to reinforce that commitment to the customer and ensure good customer outcomes are front of mind for employees and at the heart of all business decisions.
A financial services provider can build customer-centricity across processes, but it’s staff who make that a reality and being the face of our company, we need to ensure they have the right skills and capability to recognise and respond to the needs of all customers, including vulnerable customers.
From a high-level this means grouping employee feedback to look at themes and trends as well as customer testing. Once we’ve identified a common theme, we can then look at addressing it. We’ll also take a deeper dive and look at whether it’s specific to one channel or if it’s generic across products, so that we can work with those third parties.
The ripple effect of the customer-centric business model
While unquestionably a better customer experience and outcomes are the primary driver behind customer-centricity – there are also serious business benefits to be gained, especially at a heightened time of financial services competition:
- Increase customer acquisition
Meeting the key requirements of customers right now means taking into account the economic and personal circumstances impacting them and harnessing that data from customer feedback to refine and tweak offerings. If this can be brought down to an acceptable price point – then those products will stand-out from the rest.
- It’s a win-win situation for brokers and providers
A better end-customer policy experience is beneficial for both brokers and product providers. For brokers, customer attention and interaction tends to sit with them, and they of course are more likely to place products that are well received. For the providers, if you are providing good products, and good service, the brokers will tend to place that business back with you. It’s a win-win business scenario.
- Enhance profitability
It follows that customer centricity will filter down to the bottom line. As Experian highlights: “The insurers who thrive as the crisis bites will be those that adapt to help customers best manage this new reality. That means using new tools to navigate a new landscape – using data insights to make the best decisions at application, and offering products that work for increasingly hard-pressed consumers.”
