Smart Communications, a leading tech company focused on improving customer relations, commissioned a new study, “Disjointed Experiences Cost Insurers Members And Money.” The study conducted by Forrester Consulting shows that many of the digital experiences created by health insurers today are detrimental to customer experiences and hurting insurers’ bottom lines.
Forrester’s research shows just how rapidly insurers can grow their customer base by improving customer experience. Insurance companies can gain 220,000 customers annually for every one point increase in Forrester’s Customer Experience Index (CX Index).
“What has been proven time and time again, whether by Forrester or J.D. Power or any number of firms, is that improving digital experiences increases customer loyalty and advocacy and improves the revenue and profitability of leading organizations versus their lagging peers,” said John Zimmerer, VP of Healthcare Marketing at Smart Communications
Although most health insurance members seek offline channels to avoid poor digital experiences, 51% are dissatisfied with their phone interactions. With disjointed digital experiences and weak offline channels, there doesn’t seem to be a great option for members.
“The data shows that the phone channel has a very high level of utilization and the highest level of dissatisfaction, relative to other channels,” said Zimmerer. “Customers seem to expect a greater degree of ease and effectiveness than they are getting though this channel.”
Insurers also admit shortcomings in tracking members’ experiences. Less than 40% of insurers track in-journey and end-of-journey metrics, minimizing their understanding of customer experience. By the end of the customer’s journey, just one-third of insurers reported tracking the number of times members call about an issue, customer effort score and retention.
Furthermore, there is a lack of visibility on member journeys, which impacts insurers’ business metrics. Nearly half of surveyed insurers admitted to not understanding the impact of digital experiences on their organizations’ key business metrics. They also noted an inability to track or react to members’ emotions as they engage with them, which may be preventing insurers from identifying and addressing the problems impacting digital experiences.
“In particular, the data points to the need for establishing a senior leader that ‘owns’ customer experience across functional departments, a customer-obsessed culture that puts the members’ needs first and a metrics-driven strategy for guiding people, process and technology decisions,” said Zimmerer.
Primarily, there are two challenges faced by insurers: Lackluster member experiences and an inability to connect these experiences. Although insurers want to create more connected member experiences, over half said it’s “challenging” or “very challenging” to provide a seamless digital experience throughout a journey (57%), create a complete picture of a member in a single system or data source (53%), or access real-time journey analytics (52%)
In response, the top member-focused priority of insurers is to better connect journey touchpoints to improve the member experience. Meanwhile, the highest business priority is to improve interoperability across back-end systems.
“By far, the biggest challenge is mindset, and breaking the ‘we’ve always done it this way’ thought pattern that has stagnated customer experience in health insurance,” said Zimmerer. “We’ve being seeing a steady migration out of group plans into individual and Medicare Advantage plans where consumers have much greater control over their health plan choice. Now, customer experience matters.”
As a whole, it’s clear that the priorities of US health insurers are misaligned. Members want connected, seamless journeys, while firms continue to prioritize increasing customer lifetime value and revenue per member. Once insurers improve customer experience across the board, an increase in revenue and members is expected to come with it.