The customer experience
Who are our customers? The two key categories are: • Private individuals: those who buy insurance in a private capacity to protect their own goods and liabilities. • Commercial customers: who buy insurance in a professional capacity to protect the goods and liabilities of a commercial enterprise. Customers can be classified further, for instance: • geographically: this refers to where a customer is based, e.g. in the UK or elsewhere; and • demographically: this refers to, e.g. their age, income level or education. Customers can be divided still further into: • external customers: a person or business who is not an ‘employee’ of the company; and • internal customers: employees of an organisation who receive a service from other employees in the organisation.
Customer needs and demands
Generic needs and demands All customers need: • clear and accurate information; • accessible, professional and well informed staff; • a positive customer experience; and • an easy and straightforward transaction process.
Specific needs and demands
Private individuals Private individuals are more likely to be influenced by cheaper premiums, changing their insurers accordingly using price comparison websites. Shops are open seven days a week, and banks offer 24-hour telephone or online banking and these market standards set the expectations customers have about their ability to access insurers. Commercial customers Commercial products are often more complex than personal products and a commercial customer will want to understand how the product will protect their goods and liabilities. Commercial customers are likely to be more involved, interacting with the insurer throughout the year and taking and active interest in the management of claims. They look for more than just insurance, valuing services such as risk management and technical advice too.
Demographic
The demographic of the target customers will affect: • the products offered; and • the communication methods used.
Vulnerable customers
The Financial Conduct Authority (FCA), defines a vulnerable customer as follows: A vulnerable consumer is someone who, due to their personal circumstances, is especially susceptible to detriment, particularly when a firm is not acting with appropriate levels of care. (Source: bit.ly/2G8jSy1.) Vulnerability can take many forms. It can be connected to age, health or mental impairment or to a specific situation that leaves the customer vulnerable at that moment. Such customers need special consideration to make sure that they are not disadvantaged.
Geographic
Where a customer is located can influence what they need and demand: • Time zone: customers in a different time zone may mean operating different opening hours. • Language: customers whose first language is not English will mean the need for staff with appropriate language skills. • Cultural: different cultures have different values and beliefs and it is important to be aware of these.
Partnerships
Some insurers are in partnership with banks or high street retailers. They underwrite the insurance, but it is branded and marketed by the partner and aligned to the partner’s brand values. This is reflected in all aspects of transactions with customers and the partners themselves will have their own requirements.
The customer experience
Customer service is anything that can be done for the customer to enhance their experience, and customer experience management is the process of ensuring consistency across the whole business. It combines the rational and emotional elements of each encounter a customer has with the organisation: the what and the how. These are called moments of truth and each one should be consistent with that promoted by the brand.
Benefits of creating a positive customer experience
Offering a positive customer experience is a way a company can stand out from others in a competitive market. Customers who have a positive experience are more likely to stay with the company, meaning it can be a powerful business strategy: customer satisfaction and business success are strongly related.
Benefits for the organisation
The benefits to the organisation include: • customers are loyal to the business; • new customers are attracted to the business; • high quality employees are attracted to, and stay with, the organisation; • its employees enjoy a better working environment; • productivity improves; and • the company’s profits improve.
Benefits to the customer
Although many private policyholders will move their insurance to a different insurer for a few pounds, not all do so and there are benefits to a consumer of placing their business with an efficient, effective and professional insurer: • a fast and efficient service, free from errors and delay; • speedy claims settlement; • accurate and effective assistance and advice; and • value-added benefits, such as a 24-hour helpline.
Moments of Truth
‘Moments of truth’ are interactions with customers that allow them to form a view of the organisation, based on how they are engaged, particularly compared to their expectations. A key moment of truth is the first interaction as the impression created will influence how the customer sees their experience in the future. A moment of truth can be made positive by both the ‘what’ and the ‘how’. The ‘what’ relates to simple, accessible processes. The ‘how’ relates to the nature of the interaction, how things were said, the rapport that was built, the empathy that was shown. A further aspect is the opportunity to create a positive customer outcome by considering the whole customer, and noting and responding to changes in the customer’s life that may impact on the insurance they have and/or need.
Link to future buying intentions
Customer experience is the complete brand experience. An organisation develops a customer experience intended to match the brand it is trying to promote. If a customer has a positive experience, it will enhance their view of that organisation, possibly their view of other brands within the group and even their view of the industry. They are likely to be more loyal and purchase from that brand, or others in the group, in future. A negative experience will have the opposite effect. Even if the experience was with another company, it will influence how they approach, and their expectations of, your company.
Rules on the provision of information
Whatever information you are sharing and whoever you are giving it to, it is absolutely vital that it is accurate. It must also be given within the appropriate framework. These frameworks are ethical, legal, organisational and regulatory. Any information obtained about the client, must be kept confidential.
Contract certainty
Contract certainty applies when giving customers information about their policy and what it does and does not cover. It is achieved by the complete and final agreement of all terms before the policy comes into force. This means that the full wording must be agreed before the insurer formally commits to the contract, so customer consultants must make sure that the customer has given them full information on their requirements and fully understands the cover provided. If the transaction is taking place by telephone, all of this must be agreed to during the call.
Ethical standards
Ethical standards are concerned with the way in which a moral outcome can be achieved in given circumstances. They relate to behaviour and conduct: ethical behaviour means acting honestly, with integrity and not using your position or knowledge to gain an advantage over another. It means stepping back from self-interest and acting in the best interests of the client.
CII Code of Ethics
This is a set of ethical principles for insurance and financial services professionals worldwide. It is principles based and applies to all CII members. The principles are: 1. Comply with the code and all relevant laws and regulations. 2. Act with the highest ethical standards and integrity. 3. Act in the best interests of each client. 4. Provide a high standard of service. 5. Treat people fairly regardless of age, disability, gender re-assignment, marriage and civil partnership, pregnancy and maternity, race, religion and belief, sex, and sexual orientation. Breaching the Code can lead to disciplinary action for members of the CII. However, more significantly, a breach will harm our customers, undermine our professionalism and integrity, and damage the reputation of the organisation we work for.
Importance of ethical behaviours in delivering positive customer outcomes
Insurance relies on trust, so it is vital that customers are confident that they are dealing with people who put their interests first.
Legal rules
The Data Protection Act 2018 and the UK General Data Protection Regulation (UK GDPR) (amended by the Data (Use and Access) Act 2025 (DUAA)) apply when sharing information with customers. They apply to ‘personal data’ stored in a way that enables an individual to be identified.
Organisational rules
A firm will have a policy on sharing information with customers that will cover both ethical and legal rules.
Regulatory requirements
The regulator also gives us reasons why we need to make sure that the information we provide is accurate and current. Firstly, Principle 7 of the FCA’s Principles for Businesses (PRIN) states: A firm must pay due regard to the information needs of its clients and communicate information to them in a way which is clear, fair and not misleading. Principle 6 requires that: A firm must pay due regard to the interests of its customers and treat them fairly and that all firms must be able to show consistently that fair treatment of customers is at the heart of their business model. Principle 12 – the Consumer Principle – requires firms to: Act to deliver good outcomes for retail customers.
The Consumer Duty
The Consumer Duty requires organisations to: • ask themselves what outcomes consumers should be able to expect from their products and services; • act to enable rather than hinder these outcomes; and • assess the effectiveness of their actions. (Source: A new Consumer Duty: Consultation Paper CP21/13, May 2021, FCA) The FCA wants organisations to put themselves ‘in their customers’ shoes’. The cross-cutting rules of the Consumer Duty set out the key behaviours required, and make it clear that the Consumer Principle requires organisations to: • act in good faith towards retail customers; • avoid causing foreseeable harm to retail customers; and • enable and support retail customers to pursue their financial objectives. Each of these is an essential element of the level of care that organisations should provide to consumers.
Consequences of not keeping the rules
Relationships will be seriously damaged if information is shared inappropriately. The trust of the client will be broken and they are likely to remove their business, which if sizeable, could cause serious financial loss. If news spread, via social media say, relationships with more than the particular customer could be harmed and the brand seriously damaged. Disciplinary action may also be taken, which could be a fine or even prison.
Why accurate information matters
The benefits of current and accurate information provision The main benefits are: • meeting customer needs; • delivering excellent customer service; • building trust and confidence; • getting new customers; and • fulfilling regulatory requirements.
