New research reveals insurance industry is lagging behind other highly regulated industries when it comes to effective customer communication

Less than half of consumers rate the communications they receive from insurers as at least very good, according to the latest research from Smart Communications, with the industry lagging behind rivals in health care and the wider financial services industry.

The survey found that only one fifth (20%) of consumers rated insurance communications as excellent, compared to 25% for financial services and 21% for healthcare, while just 28% rated it as very good (see below). 

 Financial ServicesInsuranceHealthcare
Excellent 25% 20% 21%
Very Good 29% 28% 29%

Smart Communications chief executive James Brown said this was a worrying finding for insurance companies.

“Our study found some troubling discrepancies between consumer demands and the communications many enterprises are currently delivering,” he said. “The good news, however, is that both groups strongly agreed that making customers feel valued has the greatest impact on the overall customer experience.

“As businesses make additional strides in their digital transformation efforts and invest in more modern customer communications management platforms, we believe these gaps will close.”

Despite Brown’s confidence in being able to close this gap, however, insurers are still not there yet. The research found that 58% of insurance business leaders say their company’s communications are improving, while only 26% of consumers agree.

The Smart Communications research report said on the matter: “No doubt this disparity is due to the two groups using different criteria to evaluate quality. The gap, and the risk that results, indicates that companies need to do a better job soliciting the opinions of their customers and updating their communications strategies accordingly.”

And insurers need to move fast, because the survey also found that almost two-thirds (62%) of consumers are likely to switch providers if their communications expectations are not met.

Meaningful Conversations

On a more positive note, however, 59% indicated they would share more personal data if the company had demonstrated using that data to make communications more meaningful, something that Brown said will become easier as insurers continue down the path of digital transformation.

“Businesses in highly regulated industries can feel more challenged than others when it comes to addressing consumers’ needs for more meaningful conversations,” he said.  “While we know that companies in these sectors are making tremendous strides, our results indicate that there is still much room for improvement before consumers feel their experiences are exceptional.

“As these companies move farther down their paths to digital transformation, consumers will start to feel even more valued through the delivery of communications that are highly relevant and personalised.”

One way that insurers can help close the gap to consumer expectations is by listening to what they are asking for.

Currently, less than one-third (31%) of insurers always contact their customers by their preferred contact channel, and Brown said that by making the simple change to increase this number, insurers could make a massive difference to their engagement with consumers.

“Honouring channel preferences is one of the most important things businesses can do to demonstrate they value their customers, and when they get this right not only will customer satisfaction and loyalty increase but they will be able to develop even deeper insights into their customer base,” he said. “We found that 59% of consumers are willing to share more personal information with companies if their data is used to make communications more meaningful.

“It’s a win-win.”