INSIGHT UNL CKING PROFITABLE GROWTH: BOOSTING INSURANCE SALES EFFICIENCY BY 18% 8 | MODERN INSURANCE
GRAPH 1: Online quiz to identify potential customers’ needs in preparation for the advisory meeting INSIGHT Insurers around the world are under cost pressure. Inflation has caused claims sums to rise worldwide, coupled with increasing customer demands and tougher competition. This makes it necessary to adjust resources in a challenging economic environment. However, our experience shows that insurance companies can increase their conversion rates by 18 per cent and improve their profits in a sustainable, long-term way. 1 3 What is the likelihood that you will need vision aids (glasses/contact lenses) during your lifetime? 32% 59% 47% 64% About 64% of the population is dependent on a vision aid. From the age of 65, this figure rises to 87%. How high are the average court costs (including lawyers ’ fees) or cases with a disputed sum of CHF 100,000? 2 4 How much does an inpatient hospital stay cost on average (in Swiss francs)? ~CHF 10,100 ~ CHF 7,800 ~CHF 14,300 ~CHF 8,900 Almost a quarter of general patients opt for the semi-private or private ward during their hospital stay- despite additional costs. How many Swiss people become disabled/ unable to work during their lifetime? Regulations, online competition and increasing customer demands Today, many banks and insurance companies are faced with a distinct set of challenges. Addressing these challenges and considering the intricacies of regulation at the same time makes it difficult to sell products and services. So, with high inflation and a generally uncertain Source: Simon-Kucher outlook, & Partners insurers have no choice but to organise their sales more efficiently. The easiest way to achieve this would be to satisfy customer requirements without using more sales resources. According to surveys in Germany, Austria and Switzerland, clients want banks and insurance companies to proactively provide them with product information that is tailored to their needs. Customers also want it to be easier to conclude contracts online, and they also want to receive loyalty bonuses if they purchase additional products and services from the same provider. Many companies are finding it harder than ever to utilise their resources efficiently and ensure long-term success in sales. However, a large number of projects in Germany, Austria and Switzerland over the last few years have provided various examples of how insurance companies can successfully optimise this arm of their business operations. The following selection of suggestions shows how insurance companies are able to sustainably improve their conversion rates and profits, taking simple measures to achieve great results. Simplifying online processes Digitalisation is playing an increasingly important role in insurance consulting. This means insurers need to redesign their services from the perspectives of both the customer and the client advisor. Whether you enter into an insurance contract is a question of trust. If this is not tangible, a potential customer will orient themselves differently—online, they are gone with a click. Online customer guidance must be uncomplicated, clear, and as simple as possible. This is essential not only for the online purchase of insurance products, but also for enabling customers to manage their insurance matters digitally. Creating resources for needs-based advice Sales-oriented support through product brochures and behaviourally optimised ‘product bridges’ has generally helped advisors to improve cross-selling and upselling. In addition, a simplified process for buying insurance products online proved essential, enabling customers to manage their insurance affairs digitally. Another advantage is that efficient, less time-consuming work processes have the ability to free up sales staff resources and be utilised elsewhere. This can be seen when selling products that require more advice, for example, or where profit margins are usually higher. Sales talks should not primarily centre on price, but on performance. The price should also always be linked to a specific service. The fact is, with targeted measures, our customer was able to increase its conversion rate GRAPH 2: A simple system with three major components designed to reward key by 18 percentage points, while simultaneously reducing the time spent success factors being achieved in line with business objectives advising customers by 12 percent. Source: Simon-Kucher & Partners A chatbot can also be used as an entry point to guide potential customers through the sales process. The Artificial Intelligence (AI) application receives questions and, depending on the content, assigns them to a client or advisor with whom the customer is then directly connected. Numerous chatbots of this kind are already being developed and used today. The performance of individual sales agents (eg. conversion rate, client satisfaction) can also influence the routing. In one of our projects with an international insurance provider, a questionnaire and an online quiz to determine customer needs led to a highly personalised online consulting experience for customers. This resulted in a sustainable improvement to conversion rates and profits through simple means. ~CHF 5.000 ~ CHF 11.000 ~CHF 8.000 ~3.000 The advance on costs to the court can be up to 100% of the presumed court costs. Quota credit ACV Sales Motion factor: • New customer • Existing customer: Volume upsell • Existing customer: Cross-sell • Existing customer: Renewal • Existing customer: Price increase Price factor: • 20% discount Sales motion factor Contract factor: • One year contract with list price in T&C • Three-year contract with automatic price increase of >3% • Other Relevant product information X 1.0 X 0.5 X 1.2 X 0.2 X 1.2 ~1% ~1,5% ~2% ~3,5% The federal disability person averages only CHF 1,890. Price factor X 1.5 X 1.0 X 0.8 Contract factor X 1.5 X 1.0 X 0.8 Insurers often focus on acquiring new customers, but maintaining and expanding existing customer relationships may be neglected in the process. Yes, the costs of reaching and convincing potential new customers can be considerable. However, expanding existing customer relationships by selling additional products largely eliminates these costs. Selling additional products to existing customers is an obvious tool for growth, but few companies fully utilise it. A silo mentality, and a lack of transparency around how customers are using the products in the first place, are the most common reasons for this. <strong>Insurance</strong> companies should utilise the information they already have about their customers to better address their needs and offer them relevant services. Creating a customer-centred marketing plan with forward-looking product suggestions from the CRM system can help to increase crossselling rates while promoting customer loyalty. For example, in some examples from Swiss and German banks, customers were sent product offers that were categorised as relevant to them by data analyses. This led to an increase in the upselling rate of up to 19 percent. 2 MODERN INSURANCE | 9