Insurance: Customer Experience Study 2021

From digitalization to sustainability – Study reveals the most effective levers for increasing sales, recommendations and loyalty

First, the good news is that the current issue of Horváth’s “Customer Experience” insurance study, which has been being conducted since 2017, demonstrates the same trend as other recent surveys: The strategic focus on customers satisfaction of insurance companies in recent years seems to be paying off, and overall customer satisfaction has never been higher. However, satisfaction is not equally high in all areas – and insurers are still failing to utilize potential to inspire customers and set themselves apart from the competition.

As the Horváth “Customer Experience 2021” study shows, two thirds of the more than 2,000 customers surveyed receive a suitable and individual claims settlement – and as many as 80 percent of all customers surveyed receive a suitable and individually tailored product recommendation. This is where the modular product strategy pays off. Nevertheless, there is still a lot of potential to be tapped into in the advice process. Only a quarter of those surveyed receive needs-based advice that deals with individual plans and wishes for the future. Satisfaction levels in this group show that needs-based advice to customers is not perceived as an inconvenient obligation, but as an appreciative discussion of their own personal circumstances: 90 percent of those who received needs-based advice found this to be a positive experience. The proportion of promoters – i.e. convinced customers who would recommend the provider to others – actually doubles if needs-based advice is provided.

A high number of promoters is a decisive competitive advantage for three reasons:

  1. Promoters are more loyal and cancel less often
  2. Promoters have a higher average contribution payment and sign up to more products
  3. Enthusiastic customers differentiate the company from the competition, which is particularly important in view of the fact that satisfaction in the entire market has increased in recent years and that the companies are perceived to have not much between them.


However, real customer enthusiasm is required to make use of these advantages – simply avoiding dissatisfaction is not enough.

Two thirds of customers are not asked about their future plans

Traditional insurance companies are in a good starting position to inspire customers, but not yet at a satisfactory level. Only around a third of those surveyed were asked about their future plans in the personal advice process – which is essential for comprehensive advice for example in pension advice. Sales teams can in particular increase the potential for enthusiasm by means of individual solutions for the customer; these are much more likely to be developed during personal advice, indicating a clear advantage over purely digital sales channels that are more likely to be associated with standard solutions. Sales teams must therefore concentrate on their core competencies and develop individual protection solutions together with customers, in a personal consultation. In addition, standard solutions can be offered digitally in order to relieve the burden on sales.

Customers expect digital communication – and are often not picked up

However, when it comes to communication channels, customers’ preferences for personal contact with their insurer are changing. For the first time in our surveys, a third of customers can already imagine a digital contact channel for advice – in 2017, it was only a seventh. Although personal contact remains the linchpin of the customer relationship, it is now interpreted more broadly and is also shifting to include digital media such as video consultation, which a fifth of customers can now imagine. Insurers must respond to this and enable agencies to also provide needs-based advice on digital channels. There is also a lever for increasing customer satisfaction here. Similarly, to the needs-based group, customers who have had personal contact – whether face-to-face or via digital channels such as video telephony – demonstrate noticeably higher willingness to recommend a given provider. The proportion of promoters increased by 30 percent.

Although insurers have made significant investments in the digitalization of Sales in recent years, the results of these efforts have not yet reached all customer groups. For example, 43 percent of the customers surveyed in our study state that they are not aware of their insurer’s digital access channel, such as a customer portal, app or similar. There is also great potential here from the insurer’s perspective to make customer contact faster and more efficient, for example via self-services or the collection of structured information as a prerequisite for increasing straight-through-processing, i.e. completely automated case handling.

The fundamental willingness to use digital channels is high: According to study information, 55 percent of customers who are not aware of a digital channel are willing to use a customer portal or an app provided by the insurer in the event of a claim. There is also potential in the area of consultation: 64 percent of those surveyed would also use an app for signing up to a policy. Here, insurance providers must focus their efforts on increasing awareness on the one hand, and reducing the barriers to entry to digital customer interaction on the other. This includes, for example, not using TAN lists for log-in, keeping sign-up routes short, performant and intuitive, etc. The further development of digital channels is a decisive step towards addressing younger customers in particular: As the study shows, more than twice as many customers between the ages of 18 and 29 used their insurer’s website for their last contact than those aged 30 to 69. However, this aspect is even more important looking to the future: 43 percent of customers between the ages of 18 and 29 can imagine a digital contact channel for initial consultation; for those aged 30 to 69, this is only 36 percent. In particular, traditional consultation at the customer’s home – the domain of tied agents – is becoming much less important: Only one in eight respondents between the ages of 18 and 29 can imagine this for their individual consultation. To compare, for those aged 30 to 69 it is still one in five. Supplementing contact channels with digital alternatives is essential for the targeted acquisition of young customers in order to achieve growth and rejuvenate customer bases.

Potential of digital consultation for process streamlining not systematically used

Insurers also have a second chance here: Shifting personal contact to digital channels makes it easier to provide advice and ongoing support to customers regardless of location. This enables agencies to work more efficiently and look after larger customer bases, and at the same time means advice and care can be guaranteed in a leaner agency network if demographic change means that many agency owners will retire in the coming years.

Additional benefits only useful for product-related areas of life

In recent years insurers have made extensive efforts to offer additional benefits to customers, with the goals of strengthening customer loyalty and developing new profit pools, for example by establishing or participating in eco-systems. However, the success of this has not yet come to fruition: Only 15 percent of those surveyed already use additional benefits from their insurer, although around half can imagine using them in principle.

In order to offer additional benefits, it is crucial for insurers to define a cohesive set of customer needs that is derived as closely as possible from the business model so that customers consider the offer to be credible and appropriate in terms of content. Another promising approach is for the offer to be able to bundle a fragmented landscape of different offerings provided by different players in the market in order to provide one core offering with relevant additional benefits from a single source. This situation can be seen, for example, in the health and home environments. These environments have a clear link to the insurer’s core business and make it possible to bundle many different but fragmented providers into a relevant offer. The customers surveyed also see this as follows: Half of them would consider it positive if their insurer offered an eco-system from the health or home sectors.

Sustainability is rated highly and is not very well rewarded, but has a strong influence on willingness to switch

The insurance industry has also long since arrived at the topic of sustainable corporate positioning. But how important is sustainability to customers with respect to their insurers – and what consequences do they derive from it? The “Customer Experience 2021” study also provides answers to this. 61 percent of those surveyed rated the topic as important or very important. This high rating goes beyond sustainable investment and also relates to claims settlement and the insurer’s overall carbon footprint. Customers therefore have an eye to the entire value chain.

However, despite this high importance, only 42 percent of customers surveyed would be willing to pay a higher insurance contribution if the insurer made a greater contribution to sustainability. However, 61 percent would consider changing their insurance policies to be covered by a more sustainable insurer. This mixed picture shows that the topic is highly relevant for the public positioning of insurance companies and can also be an additional argument in sales when targeting customers who are willing to switch. Knowledge of the values and preferences of customers takes on a new dimension and importance here, because the willingness to switch naturally also affects a company’s owns customers.

The study results presented therefore result in five fields of action for insurers:

  1. Focus on needs-based advice: Comprehensive advice not only ensures cross-selling and up-selling potential, but also inspires customers and doubles their willingness to recommend the provider to others. In addition, there is an opportunity here for differentiation from the competition.
  2. Further development of personal consultation channels: Personal contact remains important in consultation. However, the preferred channels are clearly moving towards digital but still personal communication. Agencies must be supported on the path to becoming hybrid agencies so as not to lose contact with customers.
  3. Strengthening digital access routes: Digital access channels are increasingly relevant, especially with regard to future customers. This offers the opportunity to leverage digitalization potential in operations and claims/benefits by means of structured data enabling better straight-through-processing.
  4. Offering additional benefits: Customers are generally open to additional non-insurance benefits, but do not yet currently use them. Key success factors in the development of additional benefits are credibility and proximity to the core business in terms of content.
  5. Sustainability: Customers stated that this is a highly relevant topic, though they do not derive any additional willingness to pay on this basis. However, the topic is gaining in importance for the public positioning of the insurer as a company, but also as an additional argument in sales.

Heinen, F. / Müller, M.