Now, this transformation is rewriting the rules for customer experience (CX) in the insurance industry. In the highly competitive industry, delivering best-in-class customer experiences can be a critical differentiator. Combining operational data (O-data) with experience data (X-data) provides the insights that enhance the customer experience offerings and give insurers a competitive edge.

CX Imperative: Why the Insurance Industry Lags Behind

Customers typically have few – if any – interactions with their insurance company. In fact, without a claim or policy change, there is often no interaction at all. This means when an interaction does occur, it takes on a greater level of importance. Furthering this challenge, consumers are becoming more discerning and less forgiving. One in three customers will walk away from a brand they love after just a single bad experience, .

How can insurers get a broader picture of the customer journey? The first stop is O-data, which reveals the what. Policy renewal rates are decreasing, attrition rates are increasing, new customer acquisitions are decreasing. This data tells us the insurance company has a problem, but we don’t know why the problem exists.

This is where X-data comes into play, revealing customer pain points — a difficult claims process, a poor digital experience, a slow reimbursement process — that are causing the problem. Together, this data can help insurers uncover the causes of customer churn and identify actions to best address pain points, such as automating the claims process, reducing call wait times, or optimising digital channels for claims submission.

Combining O-data and X-data makes it easier for insurers to unlock powerful business outcomes and:

• Improve the claims process, reducing attrition and increasing renewal and revenue
• Deliver a superior digital experience, increasing revenue and acquisitions
• Strengthen insurer-broker relationships, increasing policy renewals, revenue, and acquisitions

Bringing X- and O-Data Together for True Insight

three components critical to customer experience in the insurance industry: effectiveness, ease, and emotion. These components are critical to building a strong customer relationship, shoring up existing market share, and capitalising on new business opportunities. And they are best assessed through a combination of X- and O-data.

Consider what happens when a customer files an insurance claim. This process can be emotional: Property may have been lost or damaged and a customer’s day-to-day life is directly impacted. O-data tells us about how the claims process is handled while X-data tells us what the customer feels about the claims process.

The X- and O-data from these interactions must be part of a customer’s profile. No matter with whom a customer is speaking, this agent or representative is empowered with the background knowledge they need to be as responsive as possible to a customer’s concern. When insurers have these insights at their fingertips, agents and other front-line employees can provide a better experience, improving engagement and strengthening customer loyalty. These exceptional experiences turn loyal customers into brand advocates, giving insurers a critical competitive edge.

Turning Insights into Business Success

Here’s how three companies put the power of X and O to work for them.

Allianz: Predictive Power of Democratised Insights
is one of the world’s largest insurance providers, but despite being a market leader, the company recognized it was operating in a market with excess supply and declining rates. Rather than staying the course and risk falling profits and market share loss, Allianz proactively put customer experience at the heart of its strategy to earn lifelong loyalty from clients who see them as an integral, forward-thinking business partner. Working with Experience Management solutions from 51·çÁ÷(Qualtrics), they collected experience data from customers in 22 countries and 16 languages. The company now has a wealth of insights, filtering and prioritising based on location and function. These insights have led to new products, such as protecting customers from risks like cyber crime; new approaches, such as elevating claims processing from back-office to client-facing function; and new reputation management strategies, such as above-and-beyond consultations.

MetLife: Boosting Brand Engagement
MetLife, Inc. is a leading global provider of insurance, annuities, and employee benefit programs. The company is digging deeper into its data for actionable insights that drive brand engagement. For example, in a recent MetLife-sponsored Earth Week contest, participants needed to answer a series of questions to be eligible for a gift card. From the reporting, MetLife was able to determine three winners and the process sparked significant brand engagement.

SwissRe: End-to-End Customer Experience Ownership
merged all its customer experience, voice of customer, and market data from more than 11,000 clients, 25 markets, and 11 languages onto a single, secure platform. The company now has a Web-based, highly secure insights platform that gives users 24/7 access to data. The intuitive interface makes it easy for all stakeholders to become experts on customer experience. This centralised, in-house approach led to a 90 percent decrease in research costs, a five-times increase in speed and productivity, and a seven-point Net Promoter Score increase.

Next Steps: Enhancing CX with Data-Driven Insights

Experience matters. We live in a world where insurers are disproportionately rewarded when they deliver a great experience and punished when they do not. Experience Management solutions from 51·çÁ÷unlock the power of business operations data (O-data) with experience data (X-data) to transform customer experience and drive business success.

As part of the 51·çÁ÷C/4HANA suite, 51·çÁ÷now makes it easier for insurers to combine X- and O-data and gain actionable insights at every step of the customer journey. .

This article first appeared on the Global News Centre. 

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In its simplest form, XM is the process of monitoring every interaction people experience with a company in order to spot opportunities for improvement. By understanding what people are feeling and why, companies can focus their efforts and resources on the changes that will have the biggest impact on their customers or employees.

The first step to effective XM is understanding how people feel when they interact with your business. This information is called Experience, or X-data. When this is combined with traditional, operational or ‘O-data’, such as sales numbers, processing times or staff turnover, it enables companies to understand what is happening and what they need to do to fix or improve operations.

Experience Management is already big business: the market is now estimated at more than USD$44bn annually. In Australia, XM has been adopted by the likes of Volkswagen, Chobani, Allianz, Finder, Fuji Xerox, and Sigma Healthcare. In fact,  2019 Customer Experience Management Survey revealed that 90% of the world’s biggest companies now have a chief experience officer (CXO) or chief customer officer (CCO), up from 65% in 2017.

Insight into action

It’s not hard to understand why XM is growing so fast. It’s a real driver of business results. Since implementing an XM program,  has seen its Net Promoter Score increase by +49 points, while average order sizes have increased by 8%. But beyond the bottom line, Experience Management is also a clear driver of innovation.

At SAP, we believe in the . This is an approach that is founded on empathy for the stakeholders involved. Working through the phases of an innovation roadmap (Explore, Discover, Design, Deliver, Run & Scale) you quickly realise how intertwined Experience and Innovation are.

In fact, in many ways successful XM and innovation programs are very similar. Often a fundamental driver of innovation is the need to improve experience.  One common example of poor XM I regularly witness is employees double handling information – due to siloed teams and inefficient processes – which leads to errors, frustration, and wasted effort. Often, this can be solved with innovative approaches and technology, like process automation, edge computing, or new mobile applications.

Getting to the root of a problem

In this example, by using XM to understand the biggest frustrations your employees are facing – and what they want to fix the issues – businesses can get a crystal-clear understanding of the problem, which is the first step on any innovation journey. Key to this approach is gaining empathy for the users by understanding their experience.

What’s more, by engaging and empowering the employees on the front-line, who typically have the best understanding of current systems and how they could be improved, XM also enables organisations to capture feedback and ideas which might not otherwise see the light of day.

Take for example a business complaining of a lack of repeat sales. Through XM, the business can identify that the problem is not the product, the sales process, or even the pricing. Instead, it might reveal the biggest problem is the after sales and service process.

A better understanding of the problem (and the users) helps inform potential solutions. In this instance, rather than dropping the sales price or introducing self-service scenarios, Experience Management enables the business to understand that technology like chat bots, connected products, or digital twins may result in a better outcome. Grounding innovation in deep insights means better problem solving and results.

Empathy and innovation

Using techniques from Experience Management allows businesses to truly empathise with customers. The reality is that too many businesses believe that they understand the problems faced by their customers or employees already. But if organisations do not ask users about the issues they’re facing, and why they’re problematic, it’s impossible for them to get the real picture.

When it comes to solving problems, generating ideas from many different points of view greatly increases your chances of successful innovation. Experience Management is a powerful way of gathering a diversity of opinions and involving stakeholders in the innovation journey. Of course, finding a problem and generating potential solutions is not the end of innovation. But as companies like  prove, user-testing new products at scale with Experience Management means you can get real time feedback on new products and a cycle of continuous innovation improvement.

These days, more than ever, staying one step ahead of the competition is the key to success. Businesses need to ask themselves: are your employees, customers, and partners having their expectations met? Understanding their expectations will be the first step in an effective innovation journey and will ensure you are competing well into the future.

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