In an industry with infrequent customer touchpoints, like insurance, every policyholder interaction holds lots of weight. Your business only has a lot of opportunities to interact with insureds, which means one negative experience could cause policy cancellations or customer churn.
It's imperative for insurance organizations to evaluate the one, universal touchpoint every policyholder must build relationships: making premium payments. This is mostly of the moments your organization includes a policyholder's attention, so evaluating and optimizing your insurance payment experience might be monumental to organizational success.
Because the policyholder payment experience is crucial towards the success of insurance organizations everywhere, we chose to uncover what this experience is truly like. We conducted a web-based survey in June 2021, through which we asked policyholders regarding their recent payment experiences, payment preferences and what plays a role in a good user experience.
We discovered several key points which are affecting the insurance payment experience. Here are some of the biggest takeaways:
Policyholder retention is key
Combating customer churn and policy cancellations are well-known challenges in the insurance space – and people pain points were represented within our survey results.
To gauge overall satisfaction using their current insurance provider, we asked survey respondents how likely these were to look for a new provider in the next 12 months. In total, 45% of respondents said they are “likely” or “very likely” to search for a new insurance carrier in the coming year.
The results was consistent across generations: 50% of respondents under the age of 30 and 52% of respondents ages 30-44 said they're also “likely” or “very likely” to look for a new provider.
Convenience drives online payments
We dug into how respondents felt about their insurance provider's payment experience. When asked how they chose to make their most recent insurance payment, 77% of respondents said they provided an online payment, through either a one-time checkout route or automatic payments (like AutoPay). This response was consistent across all age ranges; 87% of respondents under the age of 45 made their newest insurance payment online.
Next, we asked why this majority chose to create a payment online, rather than mailing inside a check or calling their insurance carrier. Overall, convenience was king.
38% of respondents chose the online option because they felt it was convenient, along with a further 39% of respondents were already enrolled in AutoPay. This proclivity toward online payments is an excellent trend for insurance providers; more insureds opting to make payments through self-service options ultimately means less work with your organization and, likely, home loan business print and mail costs.
But, before you get too excited about those results, there's another side to that particular coin we should consider.
While online or AutoPay options appealed to many policyholders, we also discovered that payment platforms that aren't user-friendly actually deterred online payments: 28% said they chose to not pay online because their provider's system was too difficult to make use of.
So, while many insureds would rather make payments online, they might choose a manual method when the online payment experience offered to them is subpar.
Policyholders expect omni-channel offerings
We also wanted to get a feeling of how satisfied insureds are with the omni-channel payment options (i.e. omni-channel capabilities, where one can pay a bill in your phone just as easily as possible on your laptop) their insurance provider offers. Overall, policyholders are satisfied with their options, with 46% responding “very satisfied” and 28% responding “satisfied.”
While it's encouraging to determine satisfied insureds, this feedback means a lack of omni-channel options could be a dealbreaker for the policyholders. If your organization is unable or hesitant to supply the flexibility of omni-channel offerings (which a lot of your competition likely are), you could face customer turnover.
Insurance organizations can't manage to ignore their online payment channels – the outcomes in our survey made that extremely clear. Among the most typical policyholder touchpoints, your organization's payment experience may be the factor that determines churn rates and overall organizational success.
Simply put, optimizing your online payment channels is the best method to give a positive policyholder experience and retain your customers.
