Satisfaction no guarantee of loyalty, warns report

Insurance customers are happy with their claims experience, but only intend to remain with their insurer if they are extremely satisfied, according to Ernst and Young.

The survey, based on a poll of customers from across western Europe, shows that high levels of customer satisfaction with their claims experience drives strong loyalty. In contrast, moderate satisfaction does not encourage brand loyalty.

Among respondents rating their claims experience 8 or 9 out of 10, 49% say they are more likely to remain loyal to the insurer.

This figure rises to 68% among those rating their experience 10 out of 10. At the other end of the scale, the large majority of customers who score their claims experience between 0 and 5 say that they have either switched insurer or are thinking of doing so.

E&Y Europe, Middle East, India and Africa claims advisory leader Imran Ahmed said: “The survey confirms that making a claim is a ‘make or break’ moment when it comes to influencing customer loyalty. Good customer communication is key to success and has a significant impact on retention costs.

“Insurers do not just want to feel a warm glow from knowing that customers are satisfied with their claims service.

“They want to see an increase in brand loyalty and a higher likelihood that customers will renew with them, potentially buying other products. A clearly articulated claims strategy should be at the heart of every insurance company intent on attracting and retaining customers and growing and maintaining a profitable business.”

Fifty seven per cent of insurance customers in Britain rated their claims experience as eight out of ten or higher, according to the survey.

It also showed that the critical factor for customers is to feel that their claim is being handled by someone knowledgeable and competent.

Regular progress updates and showing sensitivity are other factors found to be important in the claims process. Improving communication skills and the processes that support communication is likely to have a significant impact on customer satisfaction, the report recommends. It finds that those organizations that have follow-up communication with a claimant have a measurable impact on customer service.