I started writing this blog at the start of March with the idea of highlighting how customer behaviour across general insurance is slowly changing.
Back then I was sat in a big open plan office, had just returned from a pub lunch, and was planning to spend a weekend that mainly involved watching lots of sport. Social distancing for me then meant avoiding certain people who were chasing me for overdue bits of work.
Fast forward to today, and to state the obvious, things are a little different. I am sat in my chilly spare room working from home having just returned from my daily exercise walking around deserted streets. Watching live sports is a distant memory, while social distancing has taken on a whole new meaning.
Against this background writing about why customers do or don’t switch motor insurance and the likely outcome of the long-running Financial Conduct Authority (FCA) investigation into the sector seems trivial. But, as a recent Ipsos report highlighted, brands can develop deeper relationships with customers by being a trusted source of information or consumer-centric counsel in these uncertain times.
For general insurers, who have spoken about the need to become more customer-centric for years, the next few months are likely to be a huge a moment of truth where providers have the potential to delight (or annoy) customers.
Even in normal times because insurers have very few interactions with their customers, typically only one per annum at renewal, each one is critical. As data from our Financial Research Survey (FRS) shows customers who have more interactions tend to be more loyal. However, today interactions have become more amplified.
The experience customers get when making a claim plays a huge role. A good claims experience can help drive emotional attachment to a provider that in turns means they likely to be retained and are more likely to recommend. On the flipside, a bad experience normally leads to dissatisfaction.
The FCA has recently urged insurers to treat customers fairly and be fully transparent and not make it harder for them to make claims. In response, insurers are now prioritising vulnerable customers and urgent claims, whilst others are now only accepting new business online to increase telephone capacity for claims.
There is little doubt we are now making decisions in a time of distress, making us more likely to pay attention to the brands willing to engage with us in the right way. As a result, insurers that do the right thing for customers now will see the benefits in the longer term.
Current account switching has been on hiatus for the last six months. Will things start to turn around as we approach the end of 2020?
Leo Brownstein of the Financial Research Survey team looks at the impact the COVID-19 pandemic has had on current account switching, and why things might start to pick up in 2021.