Whether an insurance carrier, a clothing brand, or a software company, designing seamless customer experiences—on and offline—is critical to the success of any modern-day business. Best-in-class customer experiences are no longer a differentiator, they are now table stakes. Still, despite decades-long, multi-billion dollar investments into digital transformation, the insurance industry lags behind other industries when designing great customer experiences—with a handful of core customer experience problems potentially costing the industry millions of dollars (or more) in revenue every year.
As customer experience designers with more than a decade of experience helping the insurance industry better meet the needs of customers, there are a handful of customer experience problems that come up repeatedly in our work with clients. Thankfully, these problems are not insurmountable. Thoughtful, human-centered, quality design can go a long way in addressing them.
Below are some of the most common customer experience problems we see getting in the way of the insurance industry’s ability to provide first-rate products and services to customers.
1. Bad first impressions
The first interaction a user has with a brand sets the tone for their entire experience. According to a recent study, 88% of online consumers are less likely to return to a site after a bad experience. So whether it’s caused by a dated-looking website or a form submission that doesn’t work, a poor first impression may be your last, leading to lost opportunities and revenue. The unfortunate reality is that in the world of insurance, neither scenario is uncommon.
Investing in quality design can not only help your company and your products and services make smart, stand-out first impressions, but can be particularly impactful in insurance, where offerings are notoriously tough to differentiate, often involve mediated sales, and have very few consumer touchpoints.
2. Frustrating or nonexistent shopping or checkout experiences
For most consumers, buying insurance is a hassle. They’re buying it because they have to, often in a rush, and with imperfect information. While buying and shopping for insurance may never be enjoyable in the way that shopping for a new pair of shoes or booking an upcoming vacation might be, there are things insurance companies can do to make it easier and more effective. In fact, one recent study found that simply using a digital shopping tool to shop for insurance resulted in a significant increase in customer satisfaction. Meanwhile, according to the same study, more than 50% of insurance shoppers did not use digital shopping tools during their quote process at all.
Whether consumers are buying insurance without digital shopping tools because they don’t exist, are expecting the tools available to be inadequate so bypassing them entirely, or because they are getting frustrated with ineffective tools and abandoning them, buying insurance should be intuitive and easy. Thoughtful design can transform these frustrating or nonexistent experiences and increase conversion by informing and shepherding users through the buying process and helping them feel confident that they’re making the right decision.
3. Complex self-servicing experiences
Good business requires more than customer acquisition, but also retaining the customers you have. Whether filing a claim, making a payment, or updating an existing policy, bad or complicated self-servicing experiences can mean the difference between a loyal customer and a disengaged or even a disillusioned customer. In fact, according to LexisNexis’ recent U.S. Auto Insurance Trends report, less loyal customers are 4x more likely to report a slow claims process, 5x more likely to report confusing website experiences, and 5x more likely to report too many steps in the digital process.
Being there when it counts demonstrates a commitment to customers and increases stickiness. Ongoing, thoughtful interactions keep customers connected and content. Neglecting these after-sale touchpoints, which, like claims, often occur at vulnerable moments, risks frustration and endangers loyalty. Investing in good design can show customers that you care, reassuring them that they’re more than line items on your ledgers.
4. Neglected agent or employee experiences
Even at insurance companies that are investing in and prioritizing customer experience, agent and employee experiences are frequently overlooked. Not only can improving these experiences lead to happier, more efficient employees and agents, but it can lead to more premiums. A 2022 study found that improving the ease of doing business for agents increased premiums by 25%.
Employees and agents are a critical part of any successful CX strategy— their experience counts! In a mediated sale, employees and agents serve as core CX touchpoints. But without intuitive tools, the work of these important users can be hard to scale. Design can enable them to do their jobs more effectively, and in turn, increase not only the experience of employees and agents but by extension, your customers.
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Crafting seamless and intuitive customer experiences goes beyond merely meeting expectations—it’s about surpassing them. It means turning frustrating transactions into effortless interactions and converting disengaged customers into loyal advocates. But investing in customer experience isn’t just good for customers, it’s also good for business. When considering investing in customer experience initiatives, insurance leaders must ask themselves not only what they stand to gain by doing so, but what they risk leaving on the table by pushing off or neglecting these investments.
