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A close look at insurance - How well do they support customers in difficult times? (2/2)
A specialised article by Christoph Ruoff
According to the forsa survey, inflation and rising prices are currently the biggest concerns for consumers. Against this backdrop, the insurance industry should also think about how it deals with the concerns and potential financial problems of its customers.
In the second part of the specialist article, you can read, among other things, how digitalization and the use of AI are making insurers fit for the customer communication of the future. You can find the first part of the article here.
What are the reasons that private customers most frequently cite to your insurance company as the cause of their payment problems? As you would expect, the increased cost of living is far ahead with 48%, followed by ‘short-term financial bottleneck’ with 45%. Remarkably, 17 percent still cite the following reason: Forgetfulness to pay insurance premiums.
In view of these facts, it would be fatal to simply cancel the insurance contract of defaulting customers. After all, even insurers’ sales teams know exactly how time-consuming it is to acquire new customers – especially in these difficult times. It is therefore important to prevent impending payment defaults and terminations through proactive customer care.
But is this being implemented in the insurance industry? Unfortunately not, as the results of the study show: It is true that 41 percent of the companies surveyed offer their private customers optimization options in the areas of scope of benefits, premium amount and payment method for all insurance products taken out. But only if customers actively contact them. 17 percent limit the optimization options to selected insurance products.
atriga Managing Director Christoph Ruoff: “It makes a lot of sense to have a partner for receivables management at your side with whom cluster-controlled customer recovery is a central element of the strategy and who can manage communication at individual case level.”
ibi study: Only 41 percent of the companies surveyed offer their private customers optimization options in the areas of scope of benefits, premium amount and payment method for all insurance products taken out.
Payment methods in the insurance industry are highly standardized
The range of payment methods offered by insurers in the private customer business is highly standardized for historical reasons. According to the results of the ibi study, traditional payment methods such as direct debit and bank transfer dominate: all companies surveyed offer the inexpensive, reliable and proven SEPA direct debit as a payment method, while 93 percent also allow payment by invoice. This standardization is understandable and makes sense as long as the customer is solvent.
However, if there is a payment disruption, insurers should be more flexible and allow the defaulting customer to pay the outstanding amount in their preferred way – whether by credit card, PayPal, Amazon Pay, Apple Pay or even cash/viacash.
It is advisable to outsource the process to an experienced receivables management partner who can offer all common payment methods. This works without additional effort for the insurer, but demonstrably increases the payment rate, which leads to additional income. At the same time, the customer relationship is protected and the DSO values (Days Sales Outstanding) improve – a classic win-win situation.
ibi study: All companies surveyed offer the inexpensive, reliable and secure SEPA direct debit as a payment method, while 93 percent also allow payment by invoice.
The order of the day: AI-supported, individual customer care at the individual case level.
Consistent monitoring and intelligent clustering of private customers with payment problems form the basis for optimal customer advice and support, which NÜRNBERGER CEO Dr. Armin Zitzmann is calling for. However, the urgently needed individual advice for customers with payment problems cannot be provided manually. State-of-the-art digital, AI-supported tools are required here.
After all, digitalization is the basic prerequisite for high customer satisfaction and loyalty. Only efficiency gains through process automation enable a customer-first strategy that addresses the needs of each individual customer. This is achieved through communication management at individual case level and personalized customer communication across all channels.
Controlling communication at individual case level
It therefore makes a lot of sense to have a partner for receivables management at your side who makes cluster-controlled customer recovery a central element of the strategy and who can manage communication at individual case level.
A partner who constantly adapts processes and relies on state-of-the-art technologies:
What are the optimal basic structures for a future-proof and customer-centric strategy? This certainly includes elements such as a multi-credit agency strategy, digital invoice dispatch, dynamically controlled payment method offers via payment link and payment page as well as AI/ML-supported commercial dunning processes in the white label. This will enable the insurer of the future to really focus on the extremely valuable relationship with its defaulting customers and act in a customer and service-oriented manner.
Personalized customer communication: the advantages are obvious
In addition to maximum cost savings, for example through digital invoicing, insurers can even generate additional sales revenue in the commercial dunning process with this forward-looking strategy. The companies also achieve value-driven customer recovery and optimize their DSO values (Days Sales Outstanding).
The conclusion is clear: only personalized customer communication across all communication channels will pave the way for optimal customer service in the insurance industry.
ibi research study
The study ‘Payment disruptions/defaults in the insurance industry: awareness, prevention and strategies in the private customer business’ was conducted by the renowned ibi research institute at the University of Regensburg (www.ibi.de). The study partners are the companies Krause & Schopp (www.krause-schopp.de), experts in payment transactions for the insurance industry, atriga (www.atriga.com/en), a pioneer in customer-friendly and digital receivables management, and the white label BNPL enabler axytos (www.axytos.com/en).
Exclusive workshop – Register now
For you: Exclusive workshop on the study ‘Payment disruptions/defaults in the insurance industry: Awareness, prevention and strategies in the private customer business’ by the ibi research institute at the University of Regensburg
You and your colleagues can now find out how insurers successfully master the challenges of dealing with payment disruptions- and defaults in the private customer business in a joint workshop with the experts from Krause & Schopp and atriga. In just one day, participants will gain an overview of current market trends, identify specific requirements and work together to develop possible solutions.
In addition to the presentation of selected study results, you will experience an exciting keynote speech by Prof. Dr Florian Artinger from Simply Rational, put on the customer glasses in the workshop and work out real solutions with specialists, i.e. take helpful recommendations for action back to your company. In addition, a highly topical excursus will answer the question of whether and where the use of AI/ML and generative AI makes sense and is possible.
The workshop is based on the study ‘Payment disruptions/defaults in the insurance industry: awareness, prevention and strategies in the private customer business’ by the ibi research institute at the University of Regensburg (www.ibi.de).
For further information, interested readers should send an e-mail to:
Sources [in german]
Repräsentative Telefonumfrage von forsa im Auftrag des vzbv
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