There are many challenges facing modern insurance organizations. One key focus area deals with improving policyholder satisfaction levels to reduce customer churn. Unfortunately, policyholder satisfaction is impacted by so many different factors that it’s often difficult for organizations to know where to start.
Recently, Invoice Cloud conducted an online survey to understand how policyholders felt about their recent insurance payment experiences. This survey polled just over 1,000 respondents throughout the United States. We asked questions about how respondents paid their most recent insurance bill, the importance of omni-channel offerings, and whether they were in the market for a new insurance carrier. What we learned was that the online payment experience is a critical factor that significantly impacts policyholder satisfaction levels — and may hold the key to reducing customer churn.
Why this topic matters
According to survey results, 45% of respondents are “likely” or “very likely” to look for a new insurance carrier in the next 12 months. Add that to the fact that retaining customers is much more profitable than acquiring new customers – increasing customer retention by 5% can improve profits anywhere from 24 to 95% — and it becomes clear why improving the policyholder experience to retain existing customers is so important.
Insurance, however, is a low touch industry. This means that every customer interaction point is critical. And since premium payments are often the most frequent point of contact between insurance carriers and their insureds, this survey focused on the importance of payments and, in particular, online payment channels.
Takeaway 1: Convenience is key
Since premium payments are the universal touchpoint for policyholders, we decided to dig into how respondents felt about insurance payment experiences. Specifically, we focused on their most recent payment experience.
When asked how they chose to make their most recent insurance payment, 77% of respondents said they made an online payment, either through a one-time checkout route or automatic payment.
[Source: Invoice Cloud data and imagery]
Next, we asked why this group chose to make a payment online, rather than mailing in a check or calling their insurance provider. Convenience was the number one reason selected. 38% percent of respondents chose the online option because they felt it was convenient, while 39% of respondents were already enrolled in automatic payments.
While online or automatic payment options appealed to many policyholders, we also found that payment platforms that aren’t user-friendly actually deterred online payments. 28% percent of respondents cited they chose not to pay online because their provider’s system was too difficult to use.
So, while many insureds would prefer to make payments online, they may opt for a manual method if the online payment experience offered to them is subpar.
The key takeaway: Optimizing the online payment experience is critical; simply having an online payment option does not mean your organization is automatically providing a positive user experience.
Takeaway #2: Omni-channel offerings are table stakes
We also wanted to get a sense of how satisfied insureds are with the omni-channel payment options (where you can pay a bill on your phone just as easily as you can on your laptop) their insurance provider offers. Overall, policyholders are satisfied with their options, with 46% responding “very satisfied” and 28% responding “satisfied.”
While it’s encouraging to see satisfied insureds, this feedback means a lack of omni-channel options could be a dealbreaker for your policyholders. If your organization is unable or unwilling to provide the flexibility of omni-channel offerings (where many of your competitors likely are), it could result in unwanted customer turnover.
The key takeaway: Omni-channel offerings aren’t an option anymore, they’re expected for insurance payments.
Takeaway #3: Carriers need to eliminate the ‘I forgot’ excuse
When asked whether they had ever made a late payment to an insurance carrier or had their policy cancelled, nearly 30% of respondents said yes. Beyond that, when asked why they missed a payment or had their policy unwillingly cancelled, about 50% said that they forgot their payment was due.
If you work in billing or collections for your organization, you’re all too familiar with the “I forgot” excuse when it comes to late payments. The key to eliminating this issue is making online, self-service options – like scheduling a payment, calendar reminders, and easy to enroll in automatic payments – available at every step of the payment experience.
The key takeaway: Insurance carriers need to make it as easy as possible for policyholders to remember to pay their bills on time – through automatic payments, calendar reminders, text messaging, and more.
What does this mean for your organization?
The most important part of research like this is putting takeaways into action. For your organization, this means taking a look at your existing online payment experience. Is it deterring policyholders from making self-service payments? This could be costing your organization both time and money.
If you’re interested in the complete results of this survey, please take a look at the full research report here.