Earlier this year Grant Thornton published the latest Customer Loyalty and Experience Index (CLIX), an index that maps customers’ feelings of loyalty and experience across a variety of sectors and brands.
The findings highlight promising signs that the financial services sector is finally starting to make ground on the retail sector (the industry that consistently tops CLIX).
For general insurers it shows that, though they remain ahead of the life and pensions sector, they still have a long way to go to provide market-leading service and experience to their customers.
What is the Customer Loyalty and Experience Index (CLIX)?
CLIX is a Grant Thornton proprietary index that maps 21,000 customer responses across 103 leading UK and Global brands (c.200 responses per brand) against a series of questions about loyalty, experience, sentiment, happiness, value for money and much more. CLIX has been running since 2013 and gives Grant Thornton the unique ability to offer our clients our own data driven strategic insight.
The index majors on the financial services, technology, media and retail sectors.
2017 performance – a GI focus
In the 2017 index, the general insurance (GI) industry is the second lowest performing sector from a customer loyalty and experience perspective. The industry currently trails the retail banking sector which is now closer to experiencing retail-esque levels of customer loyalty and experience than ever before.
Importantly, the CLIX data highlights that GI firms have failed to solve the important industry puzzle – how to increase the frequency of customer interactions and quality of customer experience. Retail banks have done this by combining their naturally high number of touchpoints with data innovation to deliver superior customer interactions and experience.
General insurers, therefore, need to make radical changes to their customer strategy, using enablers such as connected technology and, where appropriate, partnerships with InsurTech firms looking to fundamentally re-think customer experience.
We know that great customer experience drives loyalty. General insurers, by failing to significantly increase customer experience, have not managed to push their customer loyalty scores out of negative territory (unlike the investment managers, which we will analyse below).
It is welcome news that the GI sector has improved its overall levels of customer loyalty and experience since the last CLIX analysis in 2016. The problem is that, when compared against all of their financial services counterparts, they have grown their performance in the index the least.
A fantastic effort by the investment managers saw them making very large gains against their 2016 score to push the GI sector into second-to-last place overall. This has happened because of a significant shift in focus for the investment managers which caused them to fundamentally re-think the nature of their customer relationship.
Further, the traditional rear-guard of the index, the life and pensions sector, made huge gains, narrowing the distance between themselves and the GI sector. Large investments in digital and abandoning the policy of firing off policy documents and forgetting customers that has long dogged the life and pensions sector have contributed to the improved scores. These large gains put the GI sector in an uncomfortable position – slipping towards the back of the pack.
The large amount of ground made up by the retail banks to be within a whisker of retail levels of customer experience and loyalty is a huge development for the financial services sector. It demonstrates that it is possible to achieve these levels of loyalty and experience over a relatively short timeframe. This should be an important benchmark for any general insurer when setting their customer strategy.
How could we help you?
We would be delighted to talk you through the findings in more detail and if there were any particular hypotheses or insights that you would like to explore within the detailed data set, please do let me know by contacting myself (firstname.lastname@example.org) or Grant Thornton’s Head of Insight and Peer Analysis, Paul Willis (email@example.com).