UK insurers can learn ‘vital lessons' from the e-retailing sector who perform better at customer experience, a report has urged.
A KPMG report which polled 5,000 customers from 160 banks, insurers and e-retailers, said insurers need to focus on personal interaction with customers, digital channels and adopting a retailing mentality.
The report revealed that only 16% and 13% of UK general and life insurance customers believe that customer experience has improved over the last year.
This typically a lower rate than other countries - for instance in China where 39% of general insurance customers expressed an improvement.
Similarly only 34% and 30% of UK customers rated their general and life insurance customer experience highly, again lower than countries such as the US and Germany.
KPMG said UK insurers should take note from these scores, particularly those who are looking towards other sectors for innovative ways to evolve their business models to reflect changing consumer behaviours.
It said that customers' insurance buying decisions are increasingly influenced by ‘peer review' on the web and social media channels, creating new opportunities for insurers to differentiate themselves.
Phil Smart, UK head of insurance at KPMG said: "Improving customer experience is a challenge for the industry as insurers have relatively limited interaction with their customers. Unless a claim is made, there can be little to tell insurers apart besides price and brand.
"However commoditisation hasn't held online retailers back and insurers have much to learn from this sector. Insurers should focus on improving their customer experience at the point of contact and adopt an online retailing mentality. The proliferation of aggregators is a good example of an increasing industry shift towards an online retail based model."
However the report highlights that it is the quality of the people - not the technology - that matters most to customers.
While customer experience levels were highest within those that self-serve, customers place significant importance on their interactions with the human face of an organisation.
Gary Reader, Global Head of Insurance at KPMG said "The greatest opportunity for sustainable revenue growth does not come from new products or geographical expansion, but rather from their ability to deliver a high quality and differentiating customer experience.
"Those that get it right will not only capture a greater share of new customers, they will also be better placed to keep their customers and extend their existing relationships."
