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The insurance industry is, like many others, undergoing a significant transformation moving to address the needs of the increasingly digital customer. For life and pensions insurers (L&P) becoming a more customer experience (CX) centric business can also help strike the right balance between risk and reward over time.

Customer churn has long been the norm in many industries, something that increases the focus on CX and loyalty. Increased availability of personal data has enabled personalization of products and services together with new possibilities to design customer journeys.

More regulated industries, however, have often been slower to adapt; they haven’t needed to. L&P is a heavily regulated industry and a long-term game, where customers have been less prone to switching providers. In most markets L&P is also B2B driven, meaning that customers typically have little or no freedom to choose a provider since their employer handles it for them.

This seems to be changing and the CX focus has now also reached some L&P companies. Why now?

Happy policyholders are key

Besides being affected by a general B2C trend (where CX is entering the scene ‘at early stage’ as a way of thinking while many L&P de facto are B2B with ‘captive customers’), the basic conditions are also changing: the freelance workforce is expanding, people switch jobs more frequently and the demands of today’s customers are simply higher and more personalized.

There are also concerns, especially with demographics changing and an ageing population, that public funds are insufficient to cover L&P for all, which increases the number of personal schemes and funds that can be added or moved. Further, regulations are constantly evolving which may accelerate the movement from B2B to B2C. A current example from the Netherlands is the new Pension Act.

Keeping policyholders happy thus seems no longer a nice to have, but a need to have. And the traditional inside-out worldview, starting with regulatory demands and then seeing how much CX one can get, is gradually being replaced by a more ‘from the future backward approach’. Here, CX can be the primary lens to arrive at what we really want to do, to only after that assess how much of this can be done while remaining compliant.

In a way using the CX lens as a healthy reminder that, as the American business magnate Sam Walton has said, “There is only one boss. The customer. And he can fire everybody in the company from the chairman down, simply by spending his money somewhere else.”

The demands of modern customers

How do you keep customers happy and loyal in the ever-changing insurance landscape then? Independently of industry, we know that today’s customers want simplicity, 24/7 availability and quick delivery.

They also demand clarity about pricing, value and services designed for the digital age, while increasingly realizing that some topics are best dealt with face to face; customer journeys are increasingly expected to be a hybrid of on/offline interactions. What’s more, as device proliferation impacts every industry making omnichannel the new norm, insurance customers also expect personalization at scale independently of channel.

If those expectations are not met, customers will quickly move on or in most L&P cases (when locked in) become dissatisfied and may move their funds when they can e.g. in connection with a job change. A poor CX/B2C experience may in these modern times even lead to bottom-up pressure from employees that can affect their employer’s B2B choice of the L&P provider.

Advantages of applying the CX lens

What’s more, new insurtechs disrupt the traditional model of selling and servicing which takes competition to the doorsteps of established insurers. Together with an ever-expanding ecosystem of partners, expected to increase with the gradual rise of an ‘open insurance’ environment, some serious journey orchestration is required.

All the factors above contribute to several L&P providers starting to completely rethink their products and making delivering a superior customer experience a top priority. They may have to; according to The State of Connected Customer report, 88 percent of customers say the experience a company provides is as important as its products or services.

The benefits of applying the CX lens across the business in insurance are many. Above all, it’s an approach that helps you focus on rewards and risk mitigation simultaneously since customers, processes and products are at the heart of everything you do. The lens can, if applied properly, help keep focus and reduce complexity, leading to actionable plans that reduce risk, drive customer engagement and boost cross- and upselling all at the same time while also reducing cost.

And yes, the benefits of CX can be measured as McKinsey analysis shows that companies that are leaders of CX achieved more than double the revenue growth of “CX laggards” between 2016 and 2021. 

How should a L&P company navigate ahead then? Realizing it’s a risk/reward game where the CX lens helps you put customers at the center is a good starting point. I’m excited to see that more and more of the L&P insurers I meet are starting to embark on this journey.

To learn more, please visit our insurance page.


Philip Wegloop

Associate Director, BFSI, Cognizant Consulting Nordics

Philip Wegloop



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