March 11, 2021
Why Device Insurers Need to Improve the Claims Experience to Engage Customers
Although the device insurance pricing model is well overdue for an overhaul, too many providers view pricing as the key factor that influences customer decision-making. In this article, EIP’s Head of Marketing, Glen Adam, explores the growing need for device insurance providers to shift their focus to improving the claims experience.
The trap of blaming failings on your pricing
“We need to lower our pricing.” This is a phrase that I’ve heard a lot over the twenty-five years I’ve worked in commercial marketing.
I can’t help but sigh when pricing is cited as the sole reason for a product or service failing to deliver expected volumes. If you’ve ever brought a new service or product to market you’ll have conducted the customer research, completed the competitive benchmarking, done the sums and put considerable thought into your launch pricing, right? So, why after a few months is pricing the reason for a product not achieving its targets? Could it be something else?
What really influences customers decision-making
Don’t get me wrong, pricing plays a very important part in customers’ purchase decisions. But customers rarely choose to buy something purely on the price alone. I’d argue that most of the time, it’s the messaging (the ‘hook’) that has the biggest influence on decision-making. So, communicating how your product or service addresses customer needs. If your messaging doesn’t demonstrate how your offering provides the right value and experience, and solutions to key pain points, it won’t resonate with your target audiences.
Why the claims experience is the key factor for device insurance
With device insurance, providers should increasingly focus on delivering the right claims experience – and the insurance experience as a whole. Simple management of policies, easy ways to update details and make claims, and faster claims handling, decisions and payouts. These are what today’s customers are after.
Let’s explore why device insurance providers need to rethink their approach and focus on improving the claims experience and delivering real value.
Device insurance is in need of a pricing overhaul – but it will take time
The device insurance pricing model needs an overhaul. In a recent EIP article (written by EIP’s CEO Ross Sinclair) on mobile device insurance pricing, we discussed why many customers were still not insuring their mobile phones when it’s an indispensable part of their lives and the costs to repair or replace a phone are only going in one direction – up. Ross suggested that the market needed to look at new pricing approaches, and I totally agree. And not just because he’s the CEO! Until the market changes its approach to pricing, insurers who only focus on price will find little room to differentiate.
With the increases in claims severity from the growing mobile device and parts costs, insurer margins are under pressure. There are few levers available to make cost savings, without compromising the customer experience. So, until the pricing model for device insurance radically changes, a greater focus on differentiating the customer experience and communicating the value being offered through mobile device insurance is the best approach. And the claims experience is a big part of this.
Moment of truth for customers is the claims experience
It’s no surprise that the key ‘moment of truth’ for customers, for any insurance service, is when make a claim. We’ve all heard the stories or even experienced them ourselves; the claims office was shut, long times waiting on claims ‘hotlines’ (they’re so ‘hot’ nobody answers), long and time-consuming claims forms, procrastinated decisions. Even when you’ve hung in there and got a successful insurance claim decision, it takes days or even weeks to get your payment. Or in the case of device insurance, to get your replaced or repaired device back.
Improving the claims experience will help your service stand out, gain more uptake and retain more customers.
How EIP Web addresses customer pain points for insurance providers
With EIP Web, our self-service digital portal, all these pain points are addressed. The EIP Web platform enables customers to make a claim online at any time, get an immediate and automated decision – all without needing to speak to an agent. In fact, the whole process from raising a claim, to getting a claims decision can take just 90 seconds by using the intelligent chatbot interface. Now that’s a claims experience to perk the interest of smartphone users!
With mobile phone insurance, being able to raise a claim online and get a decision in seconds is enticing. It means that the customer has the convenience of an entirely digital insurance service. Also, they’ll spend less time without the mobile that they rely upon for running so much of their lives. In other words, delivering the best possible customer experience at the key ‘moment of truth’.
Speed and convenience vital for improving the claims experience
The speed and convenience of making a claim has never been more important. Particularly during a period when technology has been the only way of keeping in contact with friends and family. A recent global Insurance consumer study by Accenture said, “that digital capabilities are now essential for insurers, connecting them to an increasingly digital consumer” and that “COVID-19 accelerated the transition to digital insurance in 2020 across all demographic groups”.
Similarly, key conclusions from an insurance consumer survey by PwC revealed that digital capabilities in insurance had emerged as the differentiator and that insurers needed to leverage technology to automate claims processing and improve the claims experience.
A seamless digital insurance experience is the key differentiator
EIP’s Web solution enables clients to differentiate their insurance schemes by providing their customers with an entirely digital experience. Plus, it gives them a messaging ‘hook’ that resonates with customers in the new normal.
I’ve suggested that in mobile device insurance, the opportunity to differentiate solely on price is diminishing. Price will always be an important factor in customers’ purchasing decision. But in a period where most customers are watching the purse strings, what’s important to customers is value for money. Therefore, insurers who invest in the claims experience (and the overarching customer experience), and can deliver at that key moment of truth, will build stronger customer relationships that will endure well beyond the pandemic’s passing.
If you’d like to know more about new insurance trends, check out our recent blog on parametric insurance. Or head to our homepage for more information about EIP’s InsurTech software and explore our innovative digital insurance solutions.
EIP is a leading global InsurTech company delivering digital insurance solutions to Telecoms, Banking and Lifestyle insurance providers. We’re an InsurTech100 company and some of the world’s biggest brands use our end-to-end software solutions. To learn more about EIP and how our software can transform your claims experience, please get in touch