Executive Outlook 2020 | Valérie Lavoie, Desjardins

Valérie Lavoie, President, Chief Operating Officer, Desjardins General Insurance Group

Rising home and auto insurance premiums will be the big issue for the industry again in 2020, driven by the growing frequency and severity of extreme weather events and the impact of distracted driving, fraud, and escalating repair costs.

Higher rates and regulatory pricing approval reforms may provide a much-needed boost to industry profitability, but they won’t assuage disgruntled policyholders who have seen their insurance premiums account for a bigger chunk of their household budgets.

Some will choose to shop around. Some will increase deductibles, drop coverages or take other steps to lower premiums. Overall, the customer’s trust in their insurance provider will likely erode. In an industry in which long-term customer loyalty is so important, this this could prove costly. But what can we do?

As a start, companies need to reach out to customers facing big increases to explain why they are necessary and to suggest appropriate discount options. This will be much easier for companies that are focused on customer experience and already have strong relationships with their clients. They’re in a much better position to weather — and even prosper throughout — industry hard cycles and other challenges. Their clients are more loyal and also much more likely to recommend them to family members or friends.

Transforming the customer experience isn’t a quick fix. Developing a customer-centric culture takes years of hard work and commitment. It requires a deep understanding of customer needs and wants, extensive employee training, and big investments to simplify processes and to digitize operations and transactions. The goal is to provide fast, reliable and hassle-free services, whether through an agent, a contact centre, website, mobile app, or a combination of these things.

It’s clear the P&C insurance industry has a long way to go to be a leader in customer experience. The rise in insurance premiums is a good reason for companies to begin the journey.