Enhanced Consumer Engagement and Understanding in the Era of Consumer Duty

Welcome to the era of Consumer Duty – a pivotal moment for all of us in the insurance industry. This isn’t just another regulatory hoop to jump through; it’s a fundamental shift in how we do business. At its core, Consumer Duty is about putting our customers first, ensuring they’re protected, and fostering an environment of trust and fairness.

So, what’s on the agenda? It’s a robust framework comprising the Consumer Principle, that defines the overall standard of expected behaviour, and the cross-cutting rules that explain how insurers should act to deliver on the four key areas: governance of products and services, fair pricing and value, making products more understandable, and offering appropriate support to customers as and when they need it. This will mean that we will need more customer segmenting and behavioural data, so that we can better understand our customers, who they are, what they need and how they behave, so we can serve them better.

Think of this as an opportunity to stand out in the market. We’re not just talking compliance here; we’re talking about building stronger, more meaningful relationships with our customers. It’s about being transparent in our dealings, innovative in our offerings, and empathetic in our interactions.

So, let’s embrace this change. Let’s use the Consumer Duty as our north star to guide us toward not just meeting, but exceeding, our customers’ expectations. After all, in this new landscape, those who truly understand and care for their customers are the ones who will thrive.

So let’s take a look at a four step plan to help you deliver exceptional customer experiences to every customer!

Step 1: Enhanced Consumer Engagement and Understanding

• Strategies for Improved Communication
  Insurers should adopt clear, transparent communication strategies that simplify complex insurance terms, policies and procedures. And in addition they should offer all this through both voice and digital channels, respecting customers communication channel preferences. Furthermore, insurers should take more proactive steps to communicate with their customers about their changing needs, how they can minimise risk and progress on their claims. This approach aligns with the Consumer Duty’s emphasis on consumer understanding, ensuring customers are well-informed and can make better decisions.
• Enhancing Customer Education
  Insurers can take advantage of conversational AI to help educate customers and guide them through the buying or claims process. Helping them make better buying choices. Helping them to better understand their rights and options. By doing so, insurers address the Consumer Duty’s requirement for promoting consumer understanding and supporting informed decision-making.

Webinar: Navigating Consumer Duty

Discover key strategies to transition from reactive identification to proactive support of your vulnerable customers.

If you would like to learn more watch this on-demand FinTechTalk webinar as we delve into these critical topics and equip you with actionable insights to navigate Consumer Duty successfully.

Step 2: Product and Service Innovation

• Developing Consumer-Centric Products
  Insurers should focus on developing products tailored to the unique needs of different consumer segments. And the services offered and the channels should also play a part in this design. For instance, creating specialised insurance packages for young families or the elderly, considering their specific requirements. Such innovation aligns with the Consumer Duty’s focus on product governance and ensuring services meet the needs of target markets.
• Implementing Flexible Pricing Models
  Introducing flexible and fair pricing models can significantly enhance customer satisfaction. For example, being proactive and offering pay-as-you-drive insurance for low-mileage drivers or dynamic pricing based on real-time data can provide better value for customers. This approach aligns with the Consumer Duty’s emphasis on price and value, ensuring that customers receive fair value for their premiums.

Step 3: Empowering and Supporting Employees

• Training and Development Programs
  Through the use of speech and text analytics, insurers are now capable of delivering real time support and highly customised training plans to their employees. And with sentiment analysis and data inisghts into the customer and their behaviour, employees can be guided to give a more empathetic level of service to those that need it. By doing so, employees are better equipped to deliver high-quality customer service and make decisions that align with the Duty’s principles.
• Creating a Supportive Work Environment
  It is important that employees understand the need for empathy and that KPIs and SLAs are designed to support this need. The employee may also be in a vulnerable position in their life and they too need to be supported with the right tools and process, so that they may also thrive in their role. So insurers need to give employees interactions they can succeed at, with contextual knowledge and mental health breaks. These initiatives not only boost morale but also ensure that employees are motivated and committed to delivering excellent customer service, a core aspect of the Consumer Duty.
• Promoting Diversity, Equity, and Inclusion
  Fostering a diverse and inclusion environment helps to make sure that employees can represent the people they are servicing, the customers. The more your employees resemble a microcosm of your customers, the more they can become advocats for them. Giving voice to all customer segments, including vulnerable groups.

Step 4: Continuous Improvement and Monitoring

• Regular Assessment of Practices
  Insurers should continuously assess and improve their practices to align with the Consumer Duty. This can involve regular audits of customer interactions, policy reviews, and feedback mechanisms. For example, implementing a system to collect and analyse customer feedback can provide insights into areas for improvement, ensuring ongoing adherence to the Duty.
• Leveraging Technology for Better Monitoring
  Adopting advanced analytics and AI can enhance the monitoring of customer satisfaction and compliance. For instance, using AI to analyse customer service calls and online interactions can identify patterns and areas needing attention. This proactive approach to monitoring not only helps in maintaining compliance but also in identifying opportunities to enhance customer experience.

Conclusion

This 4-step plan offers a strategic approach for insurers to not only comply with the Consumer Duty but to excel in delivering exceptional customer experiences. By enhancing consumer engagement, innovating products and services, supporting employees, and continuously improving practices, insurers can establish themselves as leaders in customer-centricity. Adhering to the Duty’s principles not only ensures regulatory compliance but can also drive long-term customer loyalty and trust.

Watch the associated on-demand webinar Navigating Consumer Duty – strategies for customer and employee experience success.