3 ways insurance companies fail at CX optimization

Customers hate encountering friction when researching and managing their insurance plans online. They also are savvy insurance shoppers, especially now that insurtech companies have made price comparison much easier.

Faced with fierce competition, leading insurance providers are differentiating themselves by ensuring they deliver the best digital experience they can. Competing on price isn’t just not profitable. It’s just not working.

No wonder CX optimization is an extremely important priority for insurers, according to a 2021 Kameleoon-commissioned study by Forrester. Leaders have discovered that insurance firms practicing A/B testing and optimization are 1.5 times more likely to report fast growth than those that don't, according to Forrester research.

But while nine out of 10 firms say they want to improve the use of data and analytics for CX optimization, only two out of 10 do so. What stops them?

On behalf of Kameleoon, Forrester surveyed executives at insurance companies across North America to learn why. Here are 3 takeaways from the commissioned survey and report, Insurance Firms Are Playing Catch-Up With Customer Experience Optimization, to help your firm take the next steps.

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1 Insurance companies collect and possess mountains of customer data but fail to translate it into anything meaningful

According to the Forrester report, "half of organizations that collect CX data (54%) act on it to improve digital experiences."

In other words, half of insurers are collecting customer data only to do nothing with it.

Why? They don’t start with a purpose or a CX goal when approaching CX data. Instead, like many companies, they believe they need to start with the data. But combing through the data without knowing what you should be looking for is a gruesome, low-yield exercise.

It’s easy to understand why so many insurers report feeling overwhelmed by the volume, variety and velocity of CX data generated.

A/B testing, optimization, and personalization practices give purpose to the data, making it easier for insurers to screen, filter, and sort out what they need and don’t.

At the same time, having an optimization purpose e.g. have more anonymous visitors complete a lead-gen form, helps insurers know what level of regulatory compliance they may need to consider when handling the data.

For a playbook on how to use data for optimization in a regulated industry, read the Kameleoon guide on this topic, entitled How to Use Customer Data for CX Optimization.

2 Insurers fail to commit to CX optimization from the top down

Insurance firms with a “maturing” data and analytics approach are 1.9x more likely to struggle with data volume and variety than “very mature” firms.

What's stopping insurers from integrating customer data and testing throughout their organization?

Only 40% of respondents said their firm has "bought in" to CX optimization, despite saying it’s a top priority.

Another 40% said their company "lacks internal skills and partners to maximize the value of digital CX insights."

The key to unleashing great CX and joining the firms that report fast growth is, "empowering employees with the right skills, processes, and technologies to optimize all digital experiences,” writes Forrester.

3 Only leading insurance firms regularly practice A/B testing

Only 33% of insurance firms surveyed reported regularly using the practice of A/B testing.

Despite the demand by consumers to be served relevant products, content and services, 7 out of 10 firms do not have a technique to recommend a product or content to a visitor based on their interests or onsite behavior.

Without the ability to discover, create, and validate digital experiences that delight customers—in other words, A/B testing—most insurers are ignoring or simply guessing as to how to better serve their customers. Firms that regularly practice A/B testing, however, were 1.5x more likely to report faster growth.

(For a quick primer on A/B tests that insurance companies can run, visit this article by Kameleoon or see how we enable financial services providers to start experimenting.)

As part of the financial services arena, the insurance industry faces the same technological opportunities as retail banking and investing. By applying purpose to the the data they collect through CX optimization, more insurance firms can distinguish themselves as innovative leaders.

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