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Life Insurance: 5 Key Adoption Drivers Based on Customer Experience
Executive Summary – Key Takeaways
Life Insurance Industry Overview
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During 2012 – 2018, new business premiums of life insurance providers have increased at a CAGR of 14.44%.
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Overall insurance penetration (premiums as a percent of GDP) in India reached 69% in 2017 from 2.71 % in 2001.
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The market share of 23 private insurers increased from 24.66% in 2013-14 to 30.64% in 2017-18.
Life Insurance Industry Growth Drivers
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Better management of policy claims and better regulatory policies have contributed to the growth of the market.
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An increase in disposable income and the growing working-class population in India have further driven the growth of the life insurance market.
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Life insurance companies are introducing a variety of comprehensive and custom-made insurance products for the rural sector. There has been an increase in rural income, which is pushing forward the growth of the life insurance business.
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Innovation in life insurance offerings and improvement in distribution channels has aided the growth of the life insurance market.
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Improvement in infrastructure in urban as well as rural areas is expected to drive the higher growth of the life insurance market.
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There has been a growing interest in life insurance products among people.
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The digital revolution in India has disrupted every business, and the insurance industry is no exception. India has witnessed Increased Internet penetration (with the number of users in India expected to rise from 260 million in 2015 to 666 million by 2023. This will continue to influence the insurance business.
5 Key Adoption Drivers Based on Customer Experience
Customer experience is all about creating and delivering personalized customer care. Excellent experience will attract customers – not just to be loyal to your brand, but also to spread the excellent experience with their family and friends. Further, it will become the most precious form of advertising.
When an organization delivers a great customer experience, it automatically improves customer retention. Research also has proved that when a company offers a good customer experience, they are more likely to come back and become repeat customers, thereby improving customer retention.
One of the most critical financial decisions taken by an average Indian is to buy life insurance. A lot of people feel the need to cover their family when a person is the sole breadwinner. Everyone is aware that it could be devastating for a loved one in case of an untimely death of the earning members of the family. Therefore, buying life insurance is treated as an important means of providing security to one’s family.
But are life insurance customers happy after buying the product?
Here is what customers of life insurance in India have to say. Through a detailed analysis of 63,689 online consumer conversations, Clootrack has listed down the top 5 features that are essential for customers of Life Insurance providers:
1. Policy Clarity
Dealing with life insurance can be disappointing when consumers get to know that they are not covered for a specific health issue. Further, It can be shocking to know that they have to end up paying more than what they expected to pay. These are very common and unpleasant experiences that consumers of life insurance are facing.
‘Policy Clarity’ has emerged as the top driver during a customer study conducted by Clootrack. Customer Experience gathered using online consumer conversations around multiple life insurance brands have one common thing to say – that there is no clarity in the policy documents. Have a look at the customer feedback from one of the customers of a life insurance brand:
The lack of clear policy guidelines and the fear among consumers that they will not be covered enough during health emergencies can significantly impact consumer behavior. The negative emotions can further influence their family and friends. This brings a huge negative impact on your target consumers.
Based on a survey, policyholders are not satisfied with the clarity provided by the agents. This is what the survey summarized regarding the policies bought based on the agent’s advice. Less than 40% of those who heeded an agent’s advice to purchase the policy are satisfied with their policies’ features.
Through the consumer insights collected by Clootrack, it is very evident that consumers of life insurance intertwine policy clarity of health insurance and their emotions together. Therefore, it becomes important for a life insurer to provide easy and clear policy guidelines. Customers should easily know what is covered (and not covered) in their policy.
For example, a happy customer says:
“I have been using my life insurance, their service is good, the agent had explained to me about the policy coverage, and about plan benefits clearly, and the premium amount they have charged me on a yearly basis, and I pay the premium amount through online. Their overall service is good.”
This indeed sounds like a customer who will go about telling how impressed he is with the insurance provider. This explains very well why Health Insurance Service providers have To Make Things Clear!
2. Documentation Process
There is a good reason why customers decided to buy a life insurance policy. Life Insurance is taken so that there is extra protection if things go wrong. However, when customers buy a policy or when they need to make a claim- they can encounter problems due to the documentation.
Customers find it very scary when they realize that their insurance document does not cover certain things or when specific things mentioned in the document are wrong.
From extensive category analysis performed, we at Clootrack shortlisted the top 5 factors that customers consider when they choose an insurance provider. And the documentation process has emerged as the number 2 factor.
When the customer sentiments were gathered from online forums and social media, some of the conversations clearly highlighted that customers are looking for a robust documentation process from their life insurance providers.
Customers say:
“Hard copy of the policy received after a few days, and the maturity amount was missing.”
“I have asked for some changes in nominee date of birth, which are wrong in policy documents.”
“I received the hard copy of the document with the wrong policy amount and the wrong mobile number in the document.”
It can be quite alarming when a customer finds that important information relating to the policy has not been documented accurately or has been omitted. Customer feedback clearly shows that customers are hoping to receive their policy documents with high accuracy and within 24 hours. These are problems expressed by customers.
But are the brands listening?
Do life insurance providers know the exact reasons why customers are feeling unhappy about their products?
IF not, then brands are at risk of losing market share to their competitors.
Consumer analysis can provide necessary actionable insights for life insurance providers in India to improve customer satisfaction and customer retention.
Customer perception analysis conducted by Clootrack offers deep insights into customer sentiments. Based on the analysis, consumers are looking forward to receiving important documents that are accurate and complete. They wish to experience a smooth and quick documentation process that can be done, preferably online.
A happy customer sounds like this:
“The policy coverage is easy, added to that the executive explained the details of the policy and had provided with the hard copy too.”
“The documentation process for the life insurance is very good, and the customer service is good.”
“The entire documentation process was completely hassle-free and friendly. The yearly renewal is also a simple task with due reminders coming on time and online payments being made with the flexibility of multiple payment options.”
Customer data offers innumerable opportunities to serve them better and to take them into confidence. Life insurance providers who take better cues from customer analysis can offer the best to their customers, thereby getting ahead of their competitors.
3. Premature Closure
Premature closure refers to the instance where a person surrenders a life insurance policy before the completion of its full term. The person can get back a portion of the money that was paid as a premium but only after deducting certain charges.
There may come a time when a person no longer wants to continue the life insurance policy. The insurance company should make arrangements to disburse the portion of the cash value of the policy.
Surrendering a policy means that the person is looking for quick disbursal as it is important to source cash for a person in dire need.
As per the customer conversations analyzed by Clootrack, Premature Closure has emerged as the Top 3 factors considered by consumers when choosing a life insurance company.
“Will I get all my money back?”
“Will I receive any benefits”
“Do I have to pay the penalty?”
These are the common questions that people have in their minds about premature closures. Consumers have expressed that they face problems when they decide on premature closure. They fear that they do not get a refund on time. Many of the customers also expressed that the insurance company staff are either rude or do not attend to their queries.
Some consumers said:
“First, they didn’t give my claim benefit. They didn’t even respond to my claim request, And when I canceled the policy now, they are not giving my refund money.”
“For more than a month, I am asking for the refund & provide proof of delivery, but agent talks rudely and closes complaint.”
These unpleasant customer experiences are logged on social media or on consumer forums. Insurance companies might not be really looking into consumer complaints that are outside of their customer care systems.
This is where consumer data comes out as a useful tool to improve customer experience. Consumer insights derived from consumer data can enlighten companies on areas that they never thought would pose a problem. When the consumer data is gathered, analyzed, sliced, and diced, a clear picture of the consumer experience emerges.
“Today’s customer expects a truly extraordinary customer experience. That means your company, your brand, and your experiences are not just in competition with people in your category, but in competition with everyone,” says Robi Ganguly is the CEO at Apptentive.
What is a customer expecting? Hear from the horse’s mouth:
“The advance premium paid was refunded directly through the same account used for making payment.”
“The company provides the best services in the industry. The maturity amount was sent through NEFT on maturity day. Hassle-free service.”
Life insurance companies that are looking at improving their customer experience should look deeper into customer conversations and the sentiments expressed. The journey of offering an excellent customer experience starts from there!
4. Premium Payment Options
There’s no denying that consumers are happiest when they get a full range of options for paying their life insurance premiums. Technology has opened doors for a number of payment options that are faster, cheaper, and come with higher security features.
While many life insurance providers have already embedded a variety of premium payment options, consumers still rank this feature as their Top 4 requirements.
During the category analysis conducted by Clootrack based on consumer conversations, it is very evident that consumers are very particular about the payment options offered by life insurance companies.
Many consumers are disappointed by the online portals most of the time. It throws up an error during the transaction. See how unhappy consumers expressed their feelings:
“While making the online payment also the side of yours doesn’t allow it while making the payment, it always shows expire page.”
“Worst app, you can’t make the premium payment, difficult to login.”
The consumer who is eagerly willing to make a payment will be put off if an easy payment option is not offered.
Customers feel that the insurance providers should offer a seamless payment option that includes credit cards, mobile apps, online portals, electronic clearing systems, standing instructions, agents, ATMs, and postdated cheques. A customer who felt ecstatic says:
“The entire process was completely hassle-free and friendly. The yearly renewal is also a simple task with due reminders coming on time and online payments being made with the flexibility of multiple payment options.”
So, what is stopping life insurance companies from offering such outstanding services to their customers?
Could it be that brands are not aware of what customer is expecting?
It could be that brands feel that they have offered many payment options but do not really know if they are working well!
Just like Albert Einstein said, “If there is an hour to solve a problem, spend 55 minutes gathering information about the problem and 5 minutes thinking about solutions.”
Customer care tickets, social media conversations, and online customer forums offer a huge opportunity for life insurance companies. Customer data can be gathered and analyzed using artificial intelligence to explore numerous opportunities.
Understanding the needs of the customer is the most critical component of a great customer experience. The root cause for most of the failed product launches points toward an inadequate understanding of customer needs.
If life insurance companies spend a good amount of time collecting and analyzing customer needs, the rest of the process of implementing solutions will automatically follow.
5. Maturity Benefit
Maturity benefit is the amount that a policyholder or the nominee receives from the life insurance company upon the maturity of a policy. When a policy matures, the policyholder will have to send the documents claiming the maturity benefit.
This is one of the simplest claim procedures and happens to come with minimal paperwork. The insurance company will verify the documents and release the maturity claim to the policyholder. The maturity amount needs to be credited directly to the bank account of the policyholder after the policy maturity date.
Sounds very simple right? But consumers feel this is not as simple as it looks.
When Clootrack analyzed more than 63,000 customer conversations of life insurance companies, what came as a big revelation was that customers gave higher priority to maturity benefits.
“Till date, I have not received the maturity amount.”
“Unnecessary extra charges and false promises, false mails regarding your maturity amount.”
Many customers felt cheated and betrayed when the time came to claim the maturity benefit. Customers strongly felt that it should be easy to claim their hard-earned money when they actually need it. But when the entire experience of claiming the maturity benefits becomes a nightmare, customers lose trust in the life insurance companies.
Customers have to wait for a long time to get the maturity benefits. Times when customer care should be available to clarify their queries – customers have never found them reliable and helpful.
There are some insurers who have managed to gain the confidence of the customer. Positive sentiment from one of the customer says:
“When policy got matured, the settlement was quick and including all bonus amount credited to me.”
A customer will be delighted when he enjoys an automatic credit immediately after the tenure of the policy. When a policy offers good returns, bonuses, and tax benefits, it will go a long way in satisfying the customer's expectations.
Based on a consumer survey, 60% of the consumers who had filed claims were dissatisfied with their experience. About 65% of the consumers were unhappy and quoted that partial claim settlement was the main reason for dissatisfaction Further, approximately 42% of consumers were unhappy due to delays in the processing of claims.
Dissatisfaction was higher in lower age groups compared to higher age groups. The higher awareness among the young age group could be the reason for higher dissatisfaction.
According to Esteban Kolsky, 72% of customers will share a positive experience with 6 or more people. On the other hand, if a customer is not happy, 13% of them will share their experience with 15 or even more.
But why are life insurance companies not delivering what customers expect?
It could be because companies are fixing customer issues based on just a few random complaints that reach their customer support. A data-driven analysis will be the answer to finding consumer pain points.
Life insurance Brands should look deeper into not just a few customer care queries, but also consider social media conversations, online comments, and customer feedback.
There are numerous methods to measure customer satisfaction. Qualitative research methods employ a collection of data at the source of the problem, thereby collecting the data from the users who are experiencing the issues. This paves the way for innovation and improvement of the products based on real-time data.
Conclusion
We live in a very unpredictable world. Life insurance companies have come into existence to provide some relief during uncertainties and emergencies. Customers of life insurance invest a lot of trust and money into buying policies.
On the list of customer expectations, clarity in policy documents and a quick and easy documentation process stand on top. Customers do expect easy transactions during premature closures. Easy and flexible online payments are most desirable for life insurance customers. And finally, clarity in maturity benefits and easy settlement of maturity benefits is every customers’ biggest expectation.
Today’s life insurance companies are fighting competition from all fronts. While the existing players are already established, new entrants are posing high competition as well.
Customer expectations have risen considerably in the industry. A customer-centric approach is evolving and moving away from the traditional business model, which had limited customer touchpoints. Companies should spend enough time understanding the changing needs of their customers.
Gathering customer data has evolved, and today, we have numerous technology-driven methods of collecting customer information, which is critical for offering an excellent customer experience.
Customer-Based Brand Equity
Customer-based brand equity (CBBE) is built on the concept that to build a strong brand – it is important to understand how the customers think and feel about your product. For a customer to love your product, you must build pleasant experiences around your brand. If they experience positive thoughts, opinions, feelings, and perceptions about your product, then it signals positive brand equity.
Customer-based brand equity shows the power of a customer’s attitude towards a brand, and how it can lead to the success or failure of a brand. It emphasizes laying a strong foundation that can create a positive attitude towards a brand.
Below is the brand equity of 8 different life insurance providers. It shows how customers feel about a particular brand for each of the category drivers.
Download the detailed report for free to get to know the brand names in the chart. The detailed report also covers a list of features that delight users, emerging trends in the life insurance business, and several other interesting insights.
Top Conversations Happening Around Life Insurance
Customer sentiments can be positive or negative around a particular topic. Insurers can deep dive into conversations to capture positive emotions to strengthen their offerings further. But at the same time, negative sentiments offer numerous opportunities for improvement.
Clootrack conducted data-driven customer analysis to derive consumer insights. Here are some of the conversations that should draw the attention of an Insurance provider.
“I enjoyed my full tenure of service, and the best part I got the maturity amount automatically.”
“And I had selected the money-back policy because I get a return in 5 years when I closed the policy, I will receive the maturity amount as well.”
“Awesome services, great products. It has been almost 10 years and never finds any problem”
“We can’t make an online payment for policies – highly disappointed.”
“I received the hard copy of the document on 17th October 2018 with the wrong policy amount and wrong mobile number in the document.”
Customer Beliefs
Customer belief is the knowledge that a customer possesses about a particular product coming due to the usage of that product. Consumer belief is mostly created based on how a person felt upon using the product.
Here are some common customer beliefs of Life insurance customers:
Claims are not straight forward. Companies look for reasons to reject the claim
Documentation is cumbersome & time-consuming
Insurance agents /sales personnel oversell wrong policies
Consumers of life insurance have certain beliefs due to the way in which life insurance providers have interacted with the customers in the past. This belief stays strong with the customers and can spread like wildfire if not contained.
When it comes to convincing consumers, the secret is to understand consumer beliefs. This will eventually lead a brand to know what a buyer wants from your products!!
Detailed Report
Understanding consumers is not just about knowing how they feel and what they think about your products. The only real way to know your customers is through deep consumer research using consumer conversations.
As companies try to become customer-centric, they are embracing customer intelligence to collect customer data and offer the best customer experience. Product developers and researchers aim to understand the wants, needs, and expectations of customers.
In this report, we present interesting customer conversations, delight factors, brand equity information, emerging trends, and much more about Life Insurance providers. To know more, you can download the PDF version of the report for free.
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