In order to achieve long-term success, insurance companies must operate with a customer-centric approach, a belief held by Sonja Bobrowska, UNIQA Customer Experience Research Expert.
Customer-centricity is a strategy that companies employ to drive innovation, with the aim of achieving long-term success. Without focusing on customers, it is unlikely that a company can sustain profitability over the long term. Customer-centricity is thus a much less idealistic endeavor than often assumed.
It is necessary to engage with customers' needs. Only then we can develop products and services that cater to customer demands. In my role as a researcher, I provide the foundation, because without an understanding of customers, working in a customer-centric manner is difficult, if not impossible. Insurance touches all aspects of people's lives – health, mobility, housing, interpersonal relationships, and even entrepreneurship. To address these various fields, it doesn't necessarily require a dedicated team of researchers like in my case, but rather individuals with the willingness to engage with these different aspects of life without bias.
I am originally from Poland and before coming to Austria, I studied in the United Kingdom. Since I didn't grow up in Austria, many customs were new to me, which is a significant advantage for a researcher. Because things that are completely natural for others led me to ask questions, and as a researcher, one needs a perspective that doesn't settle for the obvious.
82% of Austrian insurance customers have an insurance advisor they can turn to. I believe that especially in successful insurance companies, it is the advisors who embody customer-centricity. The relationship between a customer and an advisor is built on mutual trust, which must be established quickly despite infrequent interactions, given the complexity of insurance products. This means customers expect a deep understanding of the subject matter, although they themselves possess limited knowledge. Insurance advisors and customers often refer to the "chemistry" between them, which must be present from the start.
Insurance companies also benefit from a good relationship, as customers in strong relationships tend to purchase more insurance products from their advisors and are less inclined to switch to another insurer. Thus, the customer-advisor relationship significantly contributes to long-term customer retention.
Systematically. In my role, I am confronted with various questions and issues, requiring diverse approaches to answer them. The first question I ask myself is: Who needs this knowledge and for what purpose? This question determines the methodology for our research. In the case of the relationship between customers and advisors, we had limited prior knowledge. When you want to understand what's going on in people's minds, the best approach is to talk to them.
Therefore, we conducted in-depth interviews with both customers and advisors. Transcribed, the interviews filled 362 pages – almost as many as in Tolkien's "The Hobbit." Identifying customer concerns that are central to a good relationship within this extensive material requires significant intellectual effort, as participants' statements must be related to each other. Finally, these customer concerns were tested in a survey of the Austrian population. By combining in-depth conversations with large-scale surveys involving over 1,000 people, we were able to combine depth with breadth and derive measures from there.
Customer concerns are goals. Every individual, including customers and advisors, has goals. People need insurance to protect their lives from risks and recover from disruptions, such as a house fire. The significant advantage of customer concerns is that they remain stable in an ever-changing world. Trends, on the other hand, change. Two to three years ago, everyone was talking about blockchain, and today, everyone is talking about artificial intelligence like ChatGPT. However, behind technological innovations are customer concerns. Security, belonging, and the targeted use of resources will still be relevant in several hundred years. Therefore, my colleagues and I engage with fundamental concepts of human coexistence, such as trust, fear, and understanding. From the perspective of customer concerns, it is much easier to think about technical innovations, as they are not only more goal-oriented but also more stable.
With customer-centricity, we can minimize frustration, fear, anger, and confusion, and ensure that customers can live better lives alongside us.
Change is difficult, especially when new approaches need to be created. Challenges arise, particularly when attempting to make insurance companies fit for digitization. As science fiction author William Gibson once said, "The future is already here – it's just not evenly distributed." And although we constantly encounter digital solutions in our daily lives, this has only recently become the case in the insurance industry. In other industries like finance, this happened somewhat earlier, which makes the current time very exciting for insurance.
Before digitization, advisors were often the sole means of contacting an insurance company. Hence, the high significance of the relationship. One could say they were the only interface in customer contact, allowing a comparison to a digital solution. Today, customers and advisors use digital interfaces like apps to communicate with each other and with their insurance company. The newly created digital solutions must be designed from the users' perspective to enable independent use. It's not sufficient to simply translate existing processes into digital ones, as they are often too complex and incomprehensible for customers.
Developing customer-centric solutions requires people from many different fields – not just developers. The convergence of individuals with diverse backgrounds can lead to communication problems. Speaking from the perspective of customer concerns, it is much easier to develop a common understanding of what needs to be achieved.
As mentioned at the beginning, it is economically necessary to think customer-centrically. But what personally excites me is placing people at the center. With customer-centricity, we can minimize frustration, fear, anger, and confusion, and ensure that customers can live better lives alongside us.
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