Customer service of the future

Long waiting times, automated responses, a lack of transparency, and being passed from pillar to post to find the right point of contact – these are just some of the things that customers typically have to deal with when they contact their insurer. Customer service plays a crucial role in the insurance industry: in addition to sales, it acts as a direct interface with customers and encompasses all activities and interactions that aim to satisfy the needs and concerns of customers. Customer service forms the bridge between the insurer and its customers and is the main touchpoint where customers come into contact with the company. Therefore, in addition to the insurance product itself, it is crucial for a positive customer journey. Customer service is one of the key factors for customer satisfaction, customer loyalty and ultimately for the success of an insurance company.

The insurance industry is on the verge of a fundamental transformation, driven not only by technological progress but also by changing customer expectations. While insurers have traditionally been known for their complex and outdated processes, the future will be characterised by speed, personalisation and digital interaction.

Increasing expectations of modern insurance customers

The digital transformation has not only changed the way companies work, but also how customers expect and perceive services.

Thanks to digitalisation, customers are better informed than ever before. They have access to a wealth of comparison portals, ratings and information sources to compare providers, insurance companies, tariffs and services. This means that the average customer has significantly higher expectations when it comes to customer service.

Added to this is the fact that the insurance product is an intangible promise of protection that, unlike material goods such as cars or furniture, requires explanation. This makes customer service indispensable in its role as a provider of information. Furthermore, insurance, especially in the area of life and health insurance, is a personal, emotional product that requires the customer to be accompanied.

Seamless, automated, personalised, transparent: what will customer service look like in the future?

But what exactly will the future of customer service in the insurance industry look like? Which trends will be relevant and how can insurers meet the expectations of their digitally savvy customers?

#1 Immediate availability and seamless interaction

The modern insurance customer wants to communicate when, how and where they want. Customers expect to have access to services 24/7 – whether it be through digital channels such as websites, apps or chatbots. The service centre of the future will therefore rely on omnichannel communication, where the insurance customer can interact with their insurer through all input channels. Regardless of which channel is chosen, consistent and personalised advice and support is guaranteed, with the stored data and interactions being traceable and available across all channels.

#2 Automation and artificial intelligence

Automated processing of customer requests using GenAI will play a central and indispensable role in the service centre of the future. GenAI has the potential to fundamentally change customer service by accelerating processes and thus shortening processing times, reducing the error rate and providing tailored recommendations. Insurance customers will receive fast, high-quality responses to their queries, as AI-supported phone and chatbots act as virtual assistants and are available 24/7. These technologies make it possible to process simple queries, manage documents and provide basic information – all without any waiting time.

#3 Personalisation and proactive communication

The future of customer service will not only be determined by optimised response times, but also by proactive communication. The wealth of data available makes it possible to view each customer as an individual. Customer profiles and past insurance transactions can be used to create tailored offers and to respond to future life situations in the role of a life coach by means of predicted behaviour, the next-best-action: Modern technologies and data analysis make it possible to anticipate customers' problems and needs before they even make a request. This enables insurers to proactively approach their customers, identify potential problems early on and present offers that perfectly match their changing needs. Such an approach shows customers that they are the centre of attention, which promotes trust, security and loyalty.

#4 Self-service

Today's insurance customers are informed and self-determined and appreciate the opportunity for self-service. In the service centre of the future, customers will have access to their personal information, concerns, contract data and documents through portals and apps. This enables them to make changes independently, download documents and check their insurance status as needed.

#5 Transparency

Customers want to know exactly where their request stands and what the processing status is at all times. Insurers must increasingly focus on transparent processes and regular updates.

What challenges do insurers face? How can they overcome them?

Mindset change

Building a future-proof customer service organisation will mean a major change for insurance companies, starting with their long-established and proven way of thinking.

When designing processes, the focus has so far been on fast and efficient processing by service and office staff. Waiting times when a customer request is passed on to the next department are accepted without any problems. In the future, however, companies will have to think of their processes from their customers' perspective. The crucial question that insurers must ask themselves when designing processes is: ‘How do my customers experience this process?’ Transparency and fast, targeted answers are the key to a positive customer experience. The processing effort behind a request is irrelevant to customers, but the insurer can keep the effort low by using modern technologies.

Since customer demands and experiences are constantly changing in our fast-paced society, it is essential to incorporate feedback loops, such as a Net Promoter Score, to measure the customer experience. A falling NPS can be an indication that your own process is no longer up to date and needs to be updated.

Technological renewal

In addition to the change in mindset, IT must also be realigned to meet customer demands. Often, customer data, contracts, claims and concerns are loosely distributed across the mainframe. For service employees, this means long click paths and multiple system changes before they have gathered all the relevant information.

By building a customer data platform, the information mentioned is stored centrally in one place, which a CRM accesses to present the information bundled in a 360° customer view. This saves the service employees a lot of time while they get an overview of the customer's situation.

This is supported by the development of customer portals and apps, as well as a dedicated AI-powered wiki à la ChatGPT. The wiki serves as an initial reference work for both internal staff and technical solutions such as chatbots. Together with the customer-specific information, queries such as whether a contract covers certain damages can be answered within seconds.

Measuring customer satisfaction

Another important point is that insurance companies track customer interactions. To do this, new KPIs, such as the NPS or the cancellation probability, are introduced to measure customer satisfaction. As soon as one of the KPIs falls below a critical value, customer service can proactively approach the customer and help to resolve the issue after all. This measure ensures that customers continue to perceive their insurance company as a reliable partner despite an initially negative experience.

Holistic approach as a success factor

Customer service will change drastically in the coming years. The introduction of AI, in particular GenAI, opens up immense opportunities for improving efficiency, personalisation and customer satisfaction. However, its feasibility depends on careful planning, technological investments, a revision of complex IT architectures, a modern mindset and the responsible handling of customer data. However, it is not enough just to use AI to optimise individual processes. Rather, a holistic approach with a focus on the customer relationship must be created, which requires a fundamental change in corporate culture and business processes.

But despite the potential of automation, one aspect remains crucial: human interaction. Customers may like to handle simple requests via chatbots, but when it comes to complex or sensitive issues, which are not uncommon in the insurance industry, they still expect the support of a human advisor. The future therefore lies in a hybrid strategy in which AI and human customer service work together seamlessly.

Would you like to learn more about exciting topics from the world of adesso? Then take a look at our previously published blog posts.