Future.Talk: Is the customer really the main focus?

Last week in Basel, the important topic of customer centricity in the insurance industry was discussed in the new Helvetia auditorium by Herzog & de Meuron. Prof. Dr. Christian Biener, one of the directors of the Institute of Insurance Economics at the University of St. Gallen (HSG) and associate professor of behavioural research and risk management, moderated the captivating Future.Talk 3/2024.

The topic: ‘Is the customer really at the centre – lip service or lived reality’ was examined from various perspectives in order to have a critical discussion about whether customer centricity is actually being practised.

The customer as a differentiating factor

The insurance industry is increasingly emphasising the importance of customer centricity as a key differentiator. Many insurance companies, including Helvetia, Zurich and AXA, are putting the customer at the centre of their strategies. Prof. Wiener explored the question of what this really looks like in reality.

Helvetia, for example, positions itself as the ‘best partner for our customers’ and listens carefully to their wishes and needs. ‘Zurich’ emphasises its focus on building meaningful relationships and the merits of customer loyalty. AXA, in turn, places a high value on always putting the customer first.

Technology and customer centricity

Technology plays a crucial role in personalising the customer approach and identifying their needs. Elements such as big data, machine learning, telematics and preventive measures help to better understand customers and provide them with a tailored experience. One of the latest studies by the Institute of Insurance Economics showed that customers believe that on average 20 per cent of claims submitted are not paid. This high figure underlines the existing conflict of incentives and the challenges that insurance companies have to overcome in the eyes of their customers.

Conflicts of interest and challenges

However, there are also conflicts of incentive that make it difficult to implement customer centricity. One of the biggest conflicts arises between the interests of customers and those of the owners, usually shareholders. Maximising shareholder value, as advocated by the Friedman doctrine, can conflict with the goal of customer centricity. A company cannot invest infinitely in customer benefit because it also has to consider the interests of shareholders.

Turning customers into fans – how the use of behavioural economics influences customer satisfaction

Jan Kundert, Chief Customer Officer at Helvetia Insurance Switzerland and member of the management board, emphasised the importance of emotional customer loyalty. With a background as CEO of the European Travel Insurance (ERV) and positions at Sanitas, Zurich and AXA, he has extensive experience in cross-channel market development and the management of partner ecosystems.

Kundert talks about the renovation of the Helvetia headquarters in Basel and its symbolic significance. Efficiency and sustainability were the focus in order to create a modern and economically viable structure. In the main part of his lecture, Kundert discusses the role of behavioural economics. Emotional attachment and identification with the brand are difficult to imitate and foster trust, loyalty and lower price sensitivity. Kundert explained that strong identification features such as social confirmation and emotional interaction contribute to customer loyalty.

Helvetia provided practical examples to illustrate this theory: personalising the handover of keys to tenants with a small gesture such as a bottle of Prosecco shows an effort to create emotional moments. In addition, Kundert highlighted the simplified website and the positive experiences in claims processing.

Responsibility to Protect

Dr Lillemore Ammann Helm, Head Customer Management, AXA Switzerland, is convinced that the role of an insurer is more important today than ever before. In an uncertain economic environment and with new technologies, we are facing major challenges. These technologies influence both customer behaviour and our work and bring with them new risks. These include technological risks such as artificial intelligence, data protection and cyber security, but climate change also poses new challenges for the insurance world. This brings with it new threats for customers. Another challenge is the global political situation. That is why, as at AXA, the focus is increasingly on growth, excellence and a strong people strategy. Inclusive insurance and climate change are at the centre of the group strategy. These priorities are firmly anchored in the corporate philosophy. The aim is to identify changes and risks at an early stage and develop the best protection solutions for customers.

Inclusive insurance for vulnerable groups

The ‘AXA Essential’ or ‘Inclusive Insurance Business’ initiative aims to offer financially weaker population groups – both private individuals and companies – access to affordable, tailored insurance solutions. In this way, AXA aims to strengthen their financial resilience and make the relevant information easily accessible and understandable. Financial vulnerability also exists in Switzerland, despite our high standard of living. Axa’s offers aim to provide these groups with a better financial footing and better insurance. With partners such as Swiss Post and Swiss Benefit Company, Axa offers its customers access to additional services and benefits. New offers and campaigns, for example for the self-employed, aim to promote income stability and minimise risks.

The insurer’s responsibility is to offer its customers the best protection. The ‘Responsibility to Protect’ is AXA’s guiding principle for adequately insuring even the most vulnerable groups and offering them the best possible support.

Customer centricity as a sales strategy

Anne Basner, Head of Customer Centricity and Marketing & Communication at Zurich Insurance, provided insights into customer centricity as the core of her sales strategy. As an experienced project manager and consultant, she emphasises the importance of close customer relationships in stormy times. With rising prices and complex insurance solutions, Zurich relies on customer relationships as a distinguishing feature. Besner shows how a variety of policies and frequent interactions strengthen customer loyalty. One example is the success of loyalty calls, which have significantly reduced the number of cancellations. Another key element of Zurich’s expertise is the segmentation of customers and the targeted processing of these segments. To achieve this, Zurich relies on programmes to deepen customer relationships, training and incentive models for the field sales force. An innovative digital advisory process helps advisors achieve their daily targets and offer flexible advice. Metrics such as policy density and customer interaction rates are constantly monitored to measure success and drive continuous improvement.

Zurich not only impresses internally with its practice-oriented sales strategy, but also externally through drift shopping, which confirms the quality of customer interaction. In conclusion, Anne Basner emphasises: ‘When it comes to customer centricity, there is only one boss: the customer.’

Technology in the service of the customer: the key to effective customer centricity

Franck Kempfer, Associate Partner at Wavestone, a leading consulting firm in the insurance sector, and Johannes Windus, Technology Expert, shed light on the role of technology in customer centricity. Their presentation focuses on digital transformation and technological implementation. Kempfer explained that insurance companies are increasingly working on technology-driven initiatives to improve customer service. Despite many advances, there is often still a gap between the expectations of end customers and the services provided by insurers.

Windus highlighted the potential of AI and real-time data: technologies such as sentiment analysis and automated processes offer new possibilities for deeper customer interaction and more efficient claims processing. The use of AI can help to address customer concerns accurately and immediately, making the service as a whole more human and effective. Both speakers emphasised the need for holistic technological integration along the entire customer journey in order to create real added value and foster sustainable customer relationships.

The panel discussion brought together different perspectives on the topic of artificial intelligence (AI) and its application in the insurance industry. Here are the key takeaways:

• Emotion and AI: A key point of discussion was whether AI is capable of showing empathy. The expert from Wavestone explained that AI does not have real feelings, but it must be able to respond to emotions to appear human. This requires careful text-to-speech design that takes into account both the tone and context of the communication.
• Technology as a strategic tool: The speakers emphasised that technology does not replace strategy, but serves as a tool to improve organisational efficiency and customer experience. Important criteria for selecting relevant technologies are their practical utility and their potential to support organisational goals.
• Challenges and successes: Examples of successful AI applications were shared, including the fast and accurate analysis of health data, which can lead to better diagnoses and faster recovery. At the same time, failures were addressed, such as a chatbot project that caused frustration due to poor responses.
• Data management and customer experience: Since data in the insurance industry is complex, participants emphasised the importance of using AI to simplify and increase transparency. This can directly improve the customer experience by automating routine tasks and thus creating time for personal interactions.
• Governance and trust: Another important point was the need for robust governance structures to ensure customer trust and to ensure that AI decisions are always accompanied by human review.

In summary, it became clear that the customer is increasingly the focus of attention. However, this is a journey in which AI serves as a tool to accelerate progress. The challenge is not to lose sight of the human aspect while managing organisational capacity and change. The discussion concluded with a consensus that the insurance industry has made great strides by embracing AI and that there is further potential for positive developments.

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