5 Ways Technology is Helping Insurance Companies Reduce Customer Churn
Did you know that in the insurance industry, it costs seven to nine times more to acquire a new customer than to retain an existing policyholder?
Compared with other sectors, the insurance industry has one of the highest customer acquisition costs. For this reason, it makes good business sense to reduce customer churn – that is, retain as many existing customers as possible, rather than spending more money to replace those who walk away.
The unfortunate truth is that even the most loyal customers will leave their insurance company if they feel their needs are not being met. According to recent data, 84% of customers said the experience provided by an insurance company is just as important as its products or services, and 33% said they would go elsewhere after having just one bad experience.
What does all this mean? If insurance entities want to retain more loyal customers and keep acquisition costs low, they need to focus heavily on opportunities to reduce customer churn.
Artificial intelligence (AI) is currently playing a crucial role in complementing insurance automation software to enhance customer retention. Here are five ways that automation technology and AI are helping to reduce customer churn:
- Improving Customer Response Time
Today’s consumers don’t want to wait to get answers to their insurance questions, make policy changes, obtain a quote, report a claim or make a payment. Insurance automation software can significantly speed up the quoting process and make policy changes more efficient for wholesalers and MGAs by automating routine tasks, reducing manual work, and improving accuracy. Moreover, integrations with AI-powered chatbots and virtual agents have the ability to swiftly address customer issues and, when needed, direct them to a specific person or department for help.
- Personalized Services & Products
What services are your customers looking for? What products do they need or could they benefit from? How do they prefer to interact with your business? By capturing and analyzing information from previous exchanges and digital communications, insurance entities can better personalize future interactions with target audience members.
- Automated Renewals & Notifications
Automated systems can routinely send timely renewal reminders and policy updates to customers, reducing the chances of customers forgetting or missing important dates.
- Underwriting Enhancement
Integrating AI with automation technology allows you to easily analyze vast amounts of data to refine risk assessment and pricing strategies. By offering customers more accurate premiums based on their risk profiles, insurers can build trust and loyalty.
- Identifying Customer Issues – Early
Many automated platforms allow insurance entities to pinpoint the precise reasons for customer churn. With a wide range of underlying factors to identify churn propensity, integrated AI and automation tech can use information such as specific behavior and known customer preferences to detect possible issues of concern. Data can be collected during and immediately after interactions with customers to quickly detect churn, allowing insurance entities to intervene and correct the problem sooner rather than later.
By integrating AI with insurance automation software, insurance entities can create a more seamless, efficient, and customer-centric experience. This, in turn, can lead to higher customer satisfaction, improved loyalty, and ultimately better retention rates.
High churn due to poor customer experiences represents $470 billion in lost premiums. Now is the time to explore how automation can reduce customer churn and create loyal customers for life!
About Surefyre, Inc.
Surefyre is a highly configurable insurance automation platform and agency portal focused on digital distribution and automated workflows. Our easy-to-implement process can integrate with almost anything, from outdated legacy systems to top-of-the-line programs. Our code-less integration platform makes your life easier by automating the submission, rating, quoting and binding process for all P&C insurance products.