Consumers want convenient options. Buying insurance is usually seen as a hassle, but embedded insurance options can provide the convenience and simplicity that consumers crave. New partnerships, ecosystems and distribution models have the potential to boost customer satisfaction – as long as steps are taken to manage the customer experience.
Consumer Expectations Are Rising
Technology has changed pretty much everything, including consumer expectations. People now expect processes to be fast, simple and easy.
Why take time writing a check when you can just slide your debit card or tap your iPhone? Why go to the grocery store and wait in the long checkout line when you can have your food delivered? Why buy insurance separately when you can just check a box and bundle it with your purchase?
As technology makes common activities more convenient, expectations have risen. According to Nasdaq, a 2020 study from the National Retail Federation found that 83% of consumers say that convenience while shopping is more important to them than it was five years ago. Additionally, 97% of people say they’ve backed out of inconvenient purchases, and 52% say that half or more of their purchases are influenced by convenience.
The takeaway is clear. If you don’t give customers the convenience they want, they might go to another business that does.
New Distribution Models
New distribution models are reshaping insurance. For example, creating the Future of Insurance Customer Experiences, a e-book from Digital Insurance, lists several examples, including a partnership between State Farm and Jackson that lets State Farm agents offer certain annuity products to customers.
When businesses work together to meet consumer needs, the resulting relationship is called an ecosystem. According to McKinsey & Company, insurers are can use ecosystems to embed their insurance products and create seamless customer experiences. Partnerships like this can be a winning proposition for everyone involved.
The Potential of Embedded Insurance
Insurance can be embedded into a wide range of products and services. For example, a person could book a vacation and get travel insurance at the same time. Or a person could buy a car and get auto insurance, too. In fact, according to Reinsurance News, analysts say Tesla Insurance could disrupt the auto insurance industry.
Embedded insurance also has tremendous potential in the moving and storage industry. As anyone in the moving industry knows, moving valuation only offers very limited coverage. Third-party moving insurance offers better protection, but not all moving customers understand why this coverage is important. If a customer’s belongings are damaged and they only have valuation protection, they may be upset to realize that they will only be compensated pennies on the dollar. This can lead to angry customers, bad reviews and reputational damage.
Moving companies can protect themselves and their customers by offering third-party moving insurance. This makes the process easier for the customer. It also reduces the chance of customers neglecting to buy coverage and then blaming the moving company when something goes wrong.
The same is true for self-storage companies. By providing insurance coverage to self-storage customers, these companies can protect their customers and prevent the ugly disputes that can follow losses.
Managing the Customer Experience
Embedded insurance has the potential to improve customer satisfaction, but it has to be done right. To manage the customer experience, you need to look at the transaction from the point of view of the customer.
- Keep it convenient. One of the key advantages to embedded insurance is that it can give consumers the convenience they want. Make sure the process stays as simple as possible.
- Highlight the value. Adding insurance can also add costs. This shouldn’t be a problem, but it might become one if customers don’t realize the value they’re getting. Point out the value of coverage and how much it could save your customers. Explain why insurance is needed and what types of losses could occur if the customer decides to forgo insurance.
- Provide guidance and education. Give customers information on the insurance coverage so they understand what they’re getting. Provide a brochure or other convenient source of the information your customers need. Also make sure customers know what to do and whom to contact if a loss occurs or they have any questions or problems.
Transporting and storing goods always involves risks. Provide a great customer experience and protect your moving customers by joining the Relocation Insurance Network. Ask us how to embed insurance into your moving process.