How Can Insurers Keep Up with Customers’ Evolving Service Expectations?

Insurers Can Elevate the Service Experience

For Insurers, customer service interactions are brief—typically under seven minutes. Yet, policyholders often struggle to find carrier contact information, and once connected, they waste time navigating the Interactive Voice Response (IVR) options, waiting on hold, dealing with transfers, repeating details, and more, creating a frustrating experience. There’s an opportunity for carriers to transform these customer interactions, add value, and drive satisfaction, loyalty and retention.

Hi Marley surveyed 1,000 homeowners, renters and automobile insurance policyholders to learn more about their recent service experiences and openness to different communication options for handling their service requests.

• 54% Made a bill payment- “I need to pay my monthly bill.
• 46% Made a policy change- “I need to update coverages, limits, or deductibles.”
• 43% Asked a question about their policy or coverage- “Does my homeowners’ insurance cover water damage?”
• 41% Asked a question about their bill- “Can you help me understand this amount due or price increase?”
• 33% Requested a document- “I need a copy of my homeowners’ insurance declaration to provide to my mortgage lender.”

The survey results highlight customers’ service expectations and preferences, including a dramatic shift in policyholders’ perception of using artificial intelligence (AI) for insurance requests. This report reveals insights that can help carriers rethink how they provide service through communication options and AI-driven support to automate tasks to improve speed, efficiency and customer satisfaction.

Type of Service Request Impacts Level of Customer Satisfaction and Requires Different Handling Approaches

Clear trends emerged amongst the type of service requests and the level of satisfaction with the service experience. While most service interactions are straightforward and transactional, some emotionally charged requests, like wanting clarity around a price increase, require handling with empathy and care.

Billing Inquiries Had Lowest Satisfaction Among Service Requests

Given the sensitivity around premium increases, it’s no surprise that only 26 percent of respondents who asked a question about their bill reported feeling “very satisfied” with the experience. Thirteen percent of respondents who had a billing-related question reported being “not satisfied,” which is more than with any other service request. This low satisfaction likely stems from a rate increase that triggered the initial question, leaving the policyholder frustrated before contacting the carrier.

Furthermore, 17 percent of people could not resolve the question about their bill in one interaction; this happened more often than with any other service request, which could also contribute to a poor experience. If policyholders need to call back to resolve an inquiry, they usually start from scratch with a new representative. And without a record of the original conversation, the customer must repeat their question, and all details related to their request, leading to a frustrating experience.

Self-Service Excels for Simple Tasks, While More Complex Requests May Require Human Support

On the other hand, more than half of the respondents reported being very satisfied with their bill payment experience (51 percent) and document request experience (52 percent). People were also most likely to use the insurance carrier’s web portal for these two service request types, which may mean straightforward instructions and self-service options that allow policyholders to complete requests quickly and easily, creating more satisfactory experiences.

Phone calls are the most common channel to handle more complex requests, such as questions about policy or coverage (56 percent), questions about bills (57 percent), or a policy change (52 percent). While the popularity of phone calls for questions and policy changes could imply that people want to work directly with a human representative for clarity and confirmation, it also offers an opportunity for carriers to make a personal connection and improve customer satisfaction.

Policyholders Have Diverse Customer Service Expectations

Policyholders expect speed and efficiency. Survey respondents said the speed of resolution (59 percent) and the ability to communicate with a human representative (54 percent) are the most important factors when selecting a channel to handle a service request. Policyholders expect speed and efficiency. Survey respondents said the speed of resolution (59 percent) and the ability to communicate with a human representative (54 percent) are the most important factors when selecting a channel to handle a service request.

However, looking at generational differences, the ability to communicate with a human representative is more important to older generations, as 63 percent of Baby Boomers said it’s one of the most important factors when choosing a communication method to complete their service request. All other generations viewed speed of resolution as most important to their channel choice.

The ability to reach my carrier from anywhere is more important to Gen Z when choosing a channel to handle a service request (37 percent) versus 22 percent of Millennials, 16 percent of Gen X, and 18 percent of Baby Boomers.

Differences Amongst Policyholder Priorities Highlight the Importance of Offering Options

Carriers should consider these shifting communication preferences. The differences amongst age groups and population segments demonstrate the importance of offering optionality so that the service experience caters to what the customer wants, driving satisfaction and loyalty.

Texting Can Help Carriers Streamline Communication and Improve Efficiency for Repeatable Requests

Forty percent of respondents said they contact their carrier monthly or every few months; 66 percent contact their carrier for a bill payment, 57 percent for a question about policy or coverage, 52 percent for a policy change, and 50 percent for a question about their bill. With a significant number of policyholders getting in touch with their carriers regularly for repeatable, simple requests, the asynchronous, accessible nature of texting can accelerate these transactions.

Customers Show Strong Interest in Text Messaging, but Few Carriers Provide the Option

People are also open to using text messaging for service. More than half of respondents would feel comfortable using text messaging to handle a document request (51 percent), followed by questions about policy or coverage (43 percent) or their bill (42 percent). Yet, only five percent of respondents used texting to handle their service needs. This gap highlights a significant opportunity for carriers to offer text messaging as a communication option for service requests more often.

Texting Provides the Easiest Service Experience

Texting offers customers the easiest service experience, compared to other channels. While more respondents reported using web chat for service requests, only 46 percent said it was easy to use. In contrast, 57 percent of those who used texting rated the experience as easy when interacting with professional service providers.

In addition to supporting ongoing conversations and giving customers a trusted contact they can reach out to anytime, for any reason, texting also lends itself well to the automation of simple transactions or questions, creating efficiencies for carriers and fast resolution for customers.

Policyholders’ Comfort with AI is Growing

The growing role of AI in insurance can also completely transform service rep conversations with customers, driving efficiency and delightful customer and employee experiences.

The survey results show a dramatic perception shift regarding AI.

Sixty-five percent of all policyholders are comfortable or very comfortable using conversational tools powered by AI for insurance requests. In comparison, only fifteen percent of respondents said they are very uncomfortable.

Five Factors Influence Policyholders’ Comfort Levels with AI

In an open-ended question, the survey asked respondents to briefly explain why they said they felt very comfortable, comfortable, uncomfortable or very uncomfortable using conversational tools powered by AI for their insurance requests. Key trends emerged among the responses, as familiarity with, or trust in, AI, along with perceptions of its ease of use and accuracy, as well as preference for human interaction, influenced comfort levels.

Policyholders’ Comfort Levels Correspond with Perceptions of AI Across Five Factors 

AI Presents an Opportunity for Carriers to Improve the Service Experience

Introduce AI Starting with Simple Tasks

Since the technology is still new and somewhat unfamiliar, most respondents prefer using AI-powered solutions for simple tasks over complex ones. However, as policyholders’ comfort with AI continues to increase, insurance carriers have the opportunity to transform how they deliver service and consider ways to automate certain interactions.
This insight suggests carriers would be most effective by introducing AI and automation for simple, straightforward service needs like document requests, billing date questions, amount due questions, or policy coverage questions. Starting with using AI for low-complexity service needs will drive efficiency while maintaining an excellent customer experience through fast resolution.

Ensure Transparency and Maintain the Human Connection

While even the most comfortable respondents expressed trust in AI, they still appreciate the ability to escalate their request to a human, creating a safety net.

In fact, not being able to contact a live person when needed was the top reason that would cause Baby Boomers (52 percent), Gen X (48 percent), and Millennials (42 percent) to consider switching carriers.

Although AI presents enormous opportunities and potential benefits with increased efficiency, streamlined communication and lower costs, customers still have reservations and apprehensions. Carriers must be transparent about how they’re implementing AI tools to maintain trust and ensure that customers can easily escalate to a human when needed.

Combining the Benefits of AI with Personal Touch Will Elevate Service Experiences

Regardless of the speed and efficiency AI enables, insurance is still a people-focused business; it’s crucial not to lose the human element of interactions. Carriers that combine the benefits of AI and personal touch will be best positioned to meet evolving customer expectations in service.

To learn more about how Hi Marley can help your service team drive efficient, lovable customer experiences, visit www.himarley.com/service.

And to see the complete survey results, download Voice of the Policyholder Survey Report: How Insurers Can Keep Up with Customers’ Evolving Service Expectations.