Impact of COVID19 on customer retention

Aviva Canada recently commissioned a survey to gauge awareness and sentiment around the impact of COVID-19 on consumers. The research, which targeted 1,500 Canadians aged 18 and older, delivered a number of key findings around employment status, transportation habits, and insurance purchasing behaviours. According to the June survey:

• 13% of Canadians experienced a change in their employment status as a result of the  coronavirus pandemic, with 50% of them being laid off and 50% losing their jobs,    resulting in a negative financial impact.
• While Canadians under the age of 30 were hit hardest by job losses or lay-offs, they were more optimistic about their employment situation improving in the third and fourth quarter.
• Driving habits will see a steady increase in the fall to coincide with the return of the school year and Canadians being less willing to use public transport in the colder months.
• Increased shift in insurance purchasing behaviour as 33% of Canadians are likely to shop for insurance over the next 12 months – a dramatic jump from an annual shopping rate of around 11%. Furthermore, 19% of customers said they’re likely to change insurers over the next 12 months, with over 50% of Canadians seeking more competitive pricing due to COVID-19.

This survey points to an opportunity to ramp up consumer education, especially when it comes to policy wordings for home and auto insurance – two major buys for the majority of Canadians. Brokers and agents, have a big role to play in helping consumers be absolutely clear about what they’re buying and what they’re covered for.

Many Canadians still prefer human interactions, despite the growing presence of online insurance shopping channels. Most respondents are seeking omni-channel communication with their brokers, with the option of face-to-face, phone, email and self-serve platforms.

Coming out of this pandemic, insurers could change as a result - more agile, secure, connected and digitally-enabled Insurers and brokers that innovate and keep up the pace with this transformation will be the winners – whereas those who stick to the old ways are likely to lose market appeal. COVID-19 was the digital wake-up call the industry needed.

Some insurers are offering a paperless solution for commercial insurance brokers with a high adoption rate. With this encouraging response, some insurers are now transitioning to paperless in personal insurance. Brokers must move quickly to react to customers’ demands for omni-channel options for quoting, binding, billing and paperless policy options.

Due to income reductions as a result of COVID19, many customers feel price is the top consideration when it comes to buying insurance, but providing customers with excellent service, is also a key differentiator. Many customers experienced long wait times and delays in receiving premium reductions, which has placed a greater emphasis on higher service levels.

The brokers who are particularly tech-focused are going to see enormous value, not only in terms of their operational efficiencies, but also in their ability to deliver true value-added services to their customers.

Routine, low value-add transactions – like getting insurance cards, getting certificates of insurance, updating policyholder information, and things like that – should all be fully automated and fully digital because there’s no value delivered to the customer by making them call you to sort that out. It’s a waste of time for the broker, and it’s a waste of time for the customer.

If brokers can automate and digitize the lower value interactions that they have with policyholders, then they can focus on delivering more value in the higher impact interactions. Many are starting to tap into the full capabilities of the electronic trading platforms in the market, and they’re using data analytics to become better partners in risk.

One of the factors that continues to drive the consolidation of the broker market, particularly the middle market broker segment, is the benefit of scale when it comes to digital capabilities and investment in technology. There are benefits of scale in terms of capabilities around digital automated transactions, claims analytics and value-added loss related services. There are additional benefits around turning data into an asset and monetizing that data in terms of how you interact with the carriers as well as how you interact with the customers. With all of those things, brokers derive great benefit from scale. Brokers haven’t typically been significant investors in technology, but that’s definitely changing.