Health Insurance's Customer Experience Imperative

In today's highly regulated insurance market, very little differentiates one insurance carrier from another. New regulations will now allow consumers to be a powerful force in how health insurance plans are ranked, separating "winners vs. losers" in customer experience. It's now easier for customers to research, compare and switch health insurance providers. As a result, health insurance companies now -- more than ever -- are realizing the importance of customer service and customer experience.

Thanks to web technology and social media we have no shortage of knowledge sources, and customers no longer have to rely on official sources of product information when it comes to researching their buying decisions. Increasingly, we are relying on customer advocacy or the opinions of fellow customers using sites such as Consumer Reports and Trip Advisor before making a buying decision. Technology and the ability of consumers to share their customer experience are eroding the importance of the brand, and the health insurance industry is not immune to these changes and the impact of customer advocacy.

Peter Whibley, KANA

In fact, consumers will soon have a powerful new tool that allows them to use data to measure the quality of different health plans offered in their state's health insurance marketplace. This tool is based on the new Quality Rating System (QRS) proposed by the Centers for Medicare and Medicaid Services (CMS) to pave the way for the adoption of consumer-friendly data transparency practices to help individuals make data-driven, informed decisions about their healthcare choices. The Quality Rating System will require insurance plans to submit data on healthcare quality, health outcomes, consumer satisfaction (based on an enrollee survey) and the cost of care. Based on this data, health insurance consumers will have a method to take action in instances or poor service leveraging their most powerful asset -- taking their business elsewhere.

So how do health insurers fare from a customer service perspective in the eyes of consumers today? In a recent survey of consumers 25 and up (February 2014), respondents ranked health insurance vendors least customer-centric of all insurance providers (life, auto, health), and even less customer-centric than the airline industry. What's more, nearly 25% of respondents surveyed indicated a very high chance (ranked 9 or 10 on a scale of 1 being least likely to 10 being most likely) of discontinuing doing business with a health insurance vendor following a poor or disappointing customer experience.

[P&C and Life Outpace Health in Customer Experience ]

Seems like there's some work to be done, however getting the customer experience equation right can be a bit daunting. As it attempts to transform customer experience, the insurance industry is faced with the following challenges:

The traditional model of relying on advisors, intermediaries and contact center agents for service has changed. Web, mobile and social channels have created a shift in customer expectations across all industries, including insurance.

Like it or not, expectations -- when it comes to customer experience -- are being influenced by the digital experiences customers receive from other industries. Customers now expect customer service on their terms, via their preferred channel and at "social speed."

Customer service processes no longer start and end at the contact center. They are now multichannel, requiring integration of many data sources and views of all supporting documentation and multimedia assets.

Traditional physical channels remain relevant even as next-generation channels proliferate.Many insurance IT ecosystems are an environment of rigid, legacy, disconnected systems where customer data resides across multiple systems. These systems are constraining business agility and attempts to improve customer service.

And yet persist they must, especially when you consider that acquiring a new customer costs carriers five to ten times more than retaining an existing one, and it can take two-to-five years for a carrier to recoup resources spent on onboarding a new customer, it's evident that reducing customer churn is key.

Gartner's Hype Cycles identify a broad spectrum of technologies that will impact the insurance industry, but states only a few are truly transformational. Two of these transformational technologies -- digitalization and business process management (BPM) can enable insurers to reduce their combined ratios.

By deploying automation and technology that supports the delivery of contextual multichannel customer service, insurers can transform their customer experience, increase customer loyalty and reduce churn. BPM and case management offer insurers additional opportunities to optimize and drive down the cost of their customer service processes.

[More health insurance customer experience stats]

Today's next-generation customer support platforms offer advanced integration capabilities to support legacy systems and avoid the steep cost and risk of rip and replacing systems. Today, effective customer service processes can be easily designed, orchestrated across departments, systems and channels, and updated on the fly to ensure the customer journey remains a positive experience.

This potent mix of technology is making the next generation of agile customer service and the future of customer experience real and accessible to insurers at this very moment. And given the new customer advocacy imperative for health insurers, it's not a moment too soon.

About the Author: Peter Whibley is product marketing manager for KANA Software, Inc. a Verint company.