It's one thing to wish for customer satisfaction. Quite another to earn it. No wonder satisfaction has become the subject of countless marketing strategies and think pieces, especially as the marketing focus across industries has shifted from product to experience.
In home insurance, however, the perennial challenge just got a little clearer thanks to a recent study from J.D. Power on home insurance satisfaction. Let's look at the highlights.
There's good news and bad news
Let's start with the good news. In the U.S., homeowners and renters are more satisfied with their insurance now than ever, scoring an all-time high of 808 (homeowners) and 834 (renters) on a scale of 1,000.
The problem is, part of that satisfaction stems from "a multi-year run of declining catastrophic losses and relatively stable pricing," which are due for an upset since Harvey and Irma came to visit. Total damages are expected to exceed $150 billion, with insured property losses from the two events ranging from $35 to $45 billion combined — to say nothing of profit strain. "Harvey and Irma cost companies around $20 billion in lost business," according to Moody's Analytics.
Suffice it to say, we're no longer on a streak of declining catastrophic losses.
On that backdrop, J.D. Power noted that "the areas where they consistently see the lowest satisfaction scores are price and direct customer service."
In the aftermath of the two hurricanes, both areas are particularly vulnerable. Many carriers will need to raise rates. And with a high volume of claims to manage, it will be harder than ever for service teams, which are finite, to deliver high-quality, personal, direct customer service.
And the trouble isn't limited to customers who've experienced hurricane losses themselves. Stories of dissatisfaction spread, which can cause dissatisfaction to spread as well. "The risk to customer satisfaction in the wake of catastrophic events transcends those directly affected," said J.D. Power's Robert Lajdziak. If your image suffers, so will satisfaction across your pool.
Two crucial strategies
Educate your customers. You can diffuse a lot of dissatisfaction simply by making the facts clear and understandable to insureds. J.D. Power noted that satisfaction is 92 points higher for those "who understand their policy and the details of what it covers," as compared to customers "who say they do not fully understand their coverage." Yet only 48 percent of customers said they do understand. There's a huge opportunity for improvement here.
Engage in multi-channel, direct and live communication year-round. For the long term, start making periodic contact with your customers all year long via direct and live channels. Doing so has been shown to achieve "the highest levels of customer satisfaction," J.D. Power found.
One last note
There's an elephant in this room, and its name is insurtech. Startups are working hard to "carve out a slice of the home insurance marketplace," J.D. Power said, and investors have their back. Insurtech has raised over $7.1 billion in the last five years.
Momentum is growing for their offerings, which include lower premiums, self-service interactions and technological advancement. Almost 30 percent of millennials who know about the startups say they will definitely or probably purchase from them in the future.
The moral of this story? Now is the time to generate your own momentum. Silvervine Software is the low risk, high reward policy administration system that can position you for the future. Request a demo to learn more.
The FedNat Insured Web is a great tool for our insureds!
They like having a centralized location to view policy info, make payments, upload policy documents, and elect to become paperless to receive a discount.
The insureds also can file a First Notice of Loss for a claim and access exiting claim info. Silvervine recently enhanced the site which allows insureds to upload policy documents directly to their policy. The uploaded docs go directly into our workflows and save a lot of manual effort on our part.
From my visits with agents, the agents appreciate the app for the amount of time saved on having to download and attach photos directly to the policy.
The app can also reduce the amount of staff required for a busy office to fulfill underwriting requests for photos.
When training agents they are amazed at how quickly the photos attach directly to the policy. After taking photos using the app and before they make it back to their desk, the photo is already attached to the policy. They also like the ability to attach additional photos for pre-existing damage.
Customer Service is seeing an improvement with retention as the text message definitely triggers phone calls from insureds to make payments.
The insureds love the fact that we notify them on their phones because they state that sometimes they don’t receive their mail for various reasons.
The insureds are paying more attention to the texts then to their actual mail. We try to set all of our customers up on that option if we notice that they are not currently enrolled, as it builds great customer relations as well as retention.
As a company we have adopted the use of Policy Scan for all our policies, and our agents have adopted the use of the app as well.
Not only is it easy to use, there is also no more worrying about losing photos, having to store photos or photos being attached to the wrong policy.
With Policy Scan we have increased efficiency in our workflow and reduced our exposure on the risk.
Silvervine’s core administration solutions easily handles multiple carriers within multiple states, including accounting, payment processing, immediate policy issuance and endorsements.
What started out writing one product, one line in one state has now grown into mulitple products, multiple lines and writing in multiple states. We have over $95 million in annualized premium in-force and we expect to grow by 20% during the next year all serviced by Silvervine.
Silvervine was our insurance software system of choice when we started the company in 2006. Silvervine enabled us to begin business within a few months of licensing the company. Today, we are one of the top 20 homeowner’s writers in Texas and SIlvervine’s solutions have been an integral part of our success.