Modern Insurance Magazine Issue 66

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. Insurance 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.
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