In the 1970s, CFOs sat with CEOs and devised ways for upset consumers to not be able…
March 1, 2017|
About one-third of insurance customers are engaged. This means the industry has a massive opportunity to gain more business.
Insurance companies and their agents aren’t capitalizing on direct access to customers as well as they could.
Insurance companies have known for decades that a policy owner who is fully engaged is more valuable than one who is actively disengaged. What many still wonder is: What, specifically, fully engages a customer with a company’s brand and products?
Gallup has spent the past 40 years helping companies understand and act on the factors that create higher levels of customer engagement and improve financial performance. Recently, Gallup studied the behaviors and preferences of more than 18,000 U.S. customers to focus on what drives their decisions about buying insurance products. Though some customers purchase insurance using online channels, most still make their original purchase from an insurance agent. Our analysis shows, however, that insurance companies and their agents aren’t capitalizing on direct access to customers as well as they could.
Driving customer engagement
The most influential driver of a policy owner’s engagement with his or her primary insurance carrier is feeling “like a valued customer” — but only 36% of customers strongly agree that their carrier makes them feel valued. On the other hand, 52% of customers strongly agree that their carrier “was knowledgeable in solving [their] problem or issue” — the least influential driver of engagement.
Why are insurance providers satisfying the weaker drivers rather than the stronger ones? It is likely because weaker drivers are easier to manage. Interactions that engage customers inspire emotions — such as feeling valued, welcomed, and cared about — which can be complex and elusive. On the other hand, tangible activities that require going through a set of steps — such as walking customers through product descriptions or asking scripted questions — may be easier than creating a genuine emotional connection with customers. Carriers that focus on activities that engage customers during every encounter are more likely to achieve higher performance versus those who do not.
Based on decades of extensive research and consulting experience, Gallup developed its Customer Engagement Score (CES) metric. Gallup classifies customers as fully engaged, indifferent, or actively disengaged based on their responses to the CES items.
For insurance companies and their agents, emotionally engaging policy owners leads to more business. For example, compared with actively disengaged customers, fully engaged customers:
However, only 34% of the customers Gallup studied are fully engaged with their insurance carrier or agent. Clearly, there’s an opportunity for insurance companies and agents to increase their business with their current customers by developing stronger relationships — and emotional connections — with them.
What insurance carriers and their agents need to do
Here are four recommendations that insurance carriers and agents can follow to engage their policy owners more effectively:
Right now, only about one-third of insurance customers are engaged. That means the insurance industry has an enormous opportunity to increase business with its current customers by developing stronger emotional connections with them. By helping agents understand the value of engagement and teaching them how to engage customers, the industry can begin capitalizing on profits that have been lost to disengagement.
Results are based on a Gallup Panel Web and mail study completed by 18,039 national adults, aged 18 and older, conducted December 4, 2013, to January 14, 2014. The Gallup Panel is a probability-based longitudinal panel of U.S. adults who are selected using random-digit-dial (RDD) phone interviews that cover landline and cellphones. Address-based sampling methods are also used to recruit panel members. The Gallup Panel is not an opt-in panel, and members are not given incentives for participating. The sample for this study was weighted to be demographically representative of the U.S. adult population using 2012 Current Population Survey figures. For results based on this sample, one can say that the maximum margin of sampling error is +/- 1 percentage points, at the 95% confidence level. Margins of error are higher for subsamples. In addition to sampling error, question wording and practical difficulties in conducting surveys can introduce error and bias into the findings of public opinion polls.
To see how Elafris Virtual Insurance Agents can help your company click here to schedule a free online demo.
This article was originally published on gallup