Mastering CX: Best Practices for the Insurance Industry

Insurance providers, much like other B2B service firms, place significant reliance on client satisfaction and service quality to both retain their clientele and stand out in a competitive landscape. Particularly during economic downturns and industry challenges, the significance of service quality and client satisfaction becomes even more pronounced in determining business success. This partially explains the widespread prioritization of customer experience (CX) by business leaders across various sectors in 2023.To gain a comprehensive understanding of your service's performance year after year, it is imperative to employ a feedback tool that not only collects valuable insights but also simplifies tracking. Moreover, you need a metric that facilitates straightforward comparison with your competitors' performance. This is where the Net Promoter Score® (NPS®) comes into play—a metric that gauges service quality and customer satisfaction. It stands as a leading indicator of revenue retention, growth prospects, and brand distinctiveness.

What is NPS?

Your NPS starts with a single survey question that asks clients how likely they are to recommend your firm to a friend or colleague. The most forward-thinking firms are also asking their employees, hoping to boost their employee experience (EX) too. Responses land on a scale of 0–10, ten being extremely likely and zero being not at all likely. From there, people have the option to offer more specific feedback.To calculate NPS, we subtract the % of detractors (those who respond with a 6 or lower) from the % of promoters (those who respond with 9 or 10).

Why is NPS Uniquely Useful?

NPS offers a standardized measurement to track and report on client satisfaction and service quality—one that can be applied across every level, from the industry as a whole to the brand-level. Each company can also drill down within their organization, including by lines of business, department or account manager. This means that you can compare your firm to others while also pinpointing the shining stars and any areas to improve within your organization. Learn more about how NPS can help drive business growth.

Insurance NPS in 2023

ClearlyRated’s Annual Survey Benchmark Study includes an industry focus on the Insurance industry NPS. The 2023 insurance industry NPS has declined 6 points from 2022, landing at 36%. This decrease comes after last year's benchmark of 42%, which was the highest since ClearlyRated first measured industry satisfaction in 2011. While many drivers of insurance client satisfaction were at or above last year's levels, an increase in the number of Detractors (0-6 out of 10) led to an overall industry NPS decline.

Insurance Industry Satisfaction – measured as NPS

Year-Over-Year Insurance Industry NPS

Insights on 2023 Ratings

The insurance industry's NPS is down 6 percentage points from 2022, however it is still one of the highest NPSs for this industry since 2011. For reference those wider NPS standards only classify organizations as excellent once they’ve earned a 50% NPS. A 70% NPS would classify them as world-class. What does it look like to have a 70%+ NPS? Consider Starbucks and USAA, recognizable service leaders with an NPS of 77% and 75%, respectively. Then compare them to Comcast, a notorious service laggard, whose clients give them a -25% NPS. While the Insurance industry improved this year, we hope this trend continues. And as firms achieve better service levels, clients’ expectations will rightfully get higher, meaning any firms that don’t keep are likely to flounder. Click here to learn more about the NPS methodology.On the other hand, this presents a huge opportunity for the Insurance industry that capitalizes on their NPS momentum year over year (with the exception of 2023 and 2020), continuing to improve their customer satisfaction and service. Firms that manage to deliver an outstanding CX and earn a high NPS as a result will more easily outshine their competition. Get tips on how to improve your CX based on customer feedback.

How does your service stack up?

The extent to which your firm feels the effects of a slowing economy may depend on the quality of your CX. An NPS survey program can help you measure, track and improve both.If you’re not already leveraging NPS at your firm, we hope you consider this article a call-to-action. Not only do client satisfaction and service quality represent opportunities to differentiate in an increasingly commodified service industry, they are fuel for firm growth. Remember the adage: “You can’t manage what you don’t measure” – and you certainly won’t be able to improve it either. Up against a reluctant firm culture? Get some tips on how to overcome common objections to survey programs to help build buy-in and get started.

Next steps

• Ready to get started with NPS? Contact the ClearlyRated team for insights, best practices, and a tour of our survey platform (designed specifically to support professional services firms).

We know a positive client experience is a critical factor in any insurance firm’s success. In fact, recently published research suggests clients who have a poor experience with their firm (as indicated by their satisfaction rating) are nine times more likely to be actively looking for a new insurance provider1. And as the industry and our client base continue to navigate unprecedented change and disruption, many business leaders are taking another look at their existing CX programs to examine success, and look towards innovations that may deliver an outsized impact for their firm. At ClearlyRated, we’ve worked with more than 350 business service firms, including providers of commercial insurance, and our team has fielded more than 5 million surveys to fuel their CX initiatives. Here are 4 strategies that we have seen transform CX initiatives and fuel real growth in our modern business climate.

1. Understand the client journey. It can be easy to misinterpret the “client experience” as a monolith. But in reality the client experience is not static. It ebbs and flows with the client journey, which starts the moment a prospect decides to work with you (or even before, during the sales process). Understanding the client journey will help you build a more robust CX program by identifying critical moments when the client experience is most likely to be impacted. From onboarding to paying an invoice, renewing a contract, seeking additional services, or even—because it does happen—terminating a relationship with your firm, each of these moments represents a unique facet of the client experience that you can be capturing in your client survey program to fuel insights and transform your CX outcomes.
2. Add outsized value for true CX impact. If you think of your CX strategy as a series of levers, do you know which levers your team can pull to create an outsized impact on the client experience? Put differently, do you know which actions and processes to invest time and energy into that will demonstrably improve CX outcomes? Recent research identifies critical client perceptions that are tightly correlated with high satisfaction (as reported by the client)¹. Those perceptions include (from most valuable to least valuable):

1. These findings are an aggregate view of key drivers of client satisfaction for insurance providers based in the U.S., and as such they offer a strong starting point for identifying key areas of investment. But your firm can, and should, leverage your CX initiative to identify those client perceptions that are most tightly correlated with satisfaction in your own client base, and use that intelligence to build a plan for improving the client experience. Building a data-informed foundation for your CX strategy will deliver an outsized impact on any investment. According to McKinsey & Company, delivering a superior customer experience requires significant investments, relentless improvements, and collaboration across customer channels and business functions.
2. Reduce stress during the buying process. Prospective clients are facing a challenging and complex landscape when it comes to purchasing commercial insurance. In fact, 92% of business service buyers say they experience stress during the buying process². Competitive differentiation between service providers is slim, and in the aftermath of COVID-19, buyers are feeling more risk averse than ever. Fortunately, your CX program can help reassure prospects as they navigate these uncertain times. Asking for referrals from happy clients identified in your CX initiative can deliver on prospects’ most ideal resources during the purchase process: a referral from a friend or colleague1. Testimonials, the second most persuasive resource buyers use during their purchase decision, can (and I would argue, should!) be sourced directly from your CX initiative to supercharge business development efforts and deliver credible proof of the service you deliver. Similarly, satisfaction scores and online ratings (both of which can be tied into your CX program) go a long way towards easing the anxiety of the buyer, and are proven to be more persuasive than your own sales and marketing materials, even your website1.
3. Empower your client support team. At its heart, a CX initiative is an intelligence gathering campaign. But who has access to that intelligence, and how quickly? While it’s impossible to overstate the value of integrating client feedback into larger business initiatives, it’s even more critical to ensure that feedback is available to the teams who can use it to inform relationship efforts as soon as humanly possible. If you’re working with a digital client survey to source CX insights, be sure to integrate those findings into your CRM or database where client relationship managers and support teams have access. These folks are the face of your brand, they are the true source of the client experience. Empowering them with real-time feedback data will help them tailor the service they deliver based on the wants, needs, and sentiments of the clients in their portfolio. In short, giving client support teams access to client feedback in real time will empower them to perform to the best of their ability.

I hope these 4 strategies have provided new insights for thinking about (and measuring the success of) your firm’s CX initiative! If you’d like to discuss any of these strategies with my team, please feel free to contact us. We’d be happy to share more about our mindset related to CX strategy for insurance firms, details about our research, or to discuss how ClearlyRated can help your firm level-up its CX initiative. Interested in learning more about our NPS survey program? Click here for our feature on the Insurance Marketing and Communications Association's (IMCA) website.¹ Source: ClearlyRated’s 2021 Service Benchmark Study² Source: ClearlyRated’s 2020 Service Benchmark Study

At ClearlyRated, our mission is to help business service providers put the customer and employee experience at the heart of their growth strategy. And we’ve had the privilege of working with insurance firms to this end for 8 years. This year, I’m very pleased to announce that the ClearlyRated team has launched “Best of Insurance”—an annual award program that will recognize industry leaders in customer and employee satisfaction!

Learn more>>

How do insurance firms earn Best of Insurance?

Best of Insurance is an unbiased, transparent industry award where customer satisfaction and service ratings are the sole drivers of whether a firm earns the Best of Insurance designation. Participating firms invite feedback and service ratings from their customers (and, if also seeking an award for employee satisfaction, from their internal employees) utilizing ClearlyRated’s research-backed Net Promoter® Score (“NPS”) survey. This online survey provides the basis for the ratings that will dictate whether a firm wins the award, as well as critical information about the health of your customer relationships.First time hearing about NPS? Here are a few resources for you:

• NPS 101 for Insurance Firms >>

• 2021 NPS Benchmarks for Insurance Firms >>

• Net Promoter® Score ‘Fast Facts’ >>

After meeting a minimum response rate requirement, your firm’s Net Promoter Score is the single factor that dictates whether you will earn Best of Insurance.

Our goal with this program is to set a high bar: winning firms must earn at least a 50% NPS (considered an “excellent” service rating) to qualify for Best of Insurance. When it comes to validating survey responses and satisfaction ratings, ClearlyRated’s research team acts as a third party to calculate and validate all customer feedback. All customer and employee feedback is available to participating firms in real-time. So is your Net Promoter® Score, so you’ll be able to track your progress and will know at the end of your survey program whether you have earned the Best of Insurance award. Learn more about the ClearlyRated survey process here >>In February of 2022, ClearlyRated will release the inaugural list of winners of the Best of Insurance award! Our Product team provides winners with a robust marketing toolkit to help make the most of their win, including a set of award logos as well as a press release template with industry and firm-specific metrics to help you tell the most compelling story possible with your service ratings. Our Marketing team also goes to great lengths to ensure that the list of Best of Insurance winners is put in front of the public, with a dedicated press release as well as email and social media announcements from ClearlyRated and our partnering organizations.

What can participating firms expect from Best of Insurance?

Like all of our other industry award programs, Best of Insurance is so much more than a simple designation of excellence. We built this program to function as a customer intelligence platform, a reputation engine, a marketing and business development tool, and an award program—all in one. In addition to competing for the Best of Insurance award, firms that survey their customers through ClearlyRated are also able to:

• Quickly identify at-risk revenue, as well as upsell and cross-sell opportunities, with real-time access to customer feedback and satisfaction ratings.
• Get a customized Financial Impact Report that provides insights and guidance about which customers to follow up with in order to secure the greatest revenue impact of your customer feedback.
• Capitalize on positive customer feedback through our automated testimonials tool which helps firms exponentially grow their catalogue of approved customer testimonials.
• Invite customers to help recognize internal service champions through the ClearlyRated Shout Out feature.
• Build online reputation by translating client feedback into online ratings on ClearlyRated.com.

I’m thrilled to invite you to participate in our inaugural year of Best of Insurance!

The past 18 months have brought about wide-scale disruption, unprecedented uncertainty, and a heightened aversion to risk across the business landscape. I am incredibly proud that the ClearlyRated team was able to focus our efforts towards bringing Best of Insurance to life at a time when our insurance industry customers need more ways to differentiate from the competition and provide credible proof of service to their prospects and customers.

I hope you’ll consider joining us for this inaugural year of Best of Insurance! For more information on the program, you can:

• Get a primer on Best of Insurance >>
• Preview the ClearlyRated survey process >>
• Contact the ClearlyRated team for a walkthrough of the program >>

The original post was updated in October 2023

As an insurance broker or agent, you provide the client service that differentiates a buyer's experience from a commoditized interaction. You strive to consult, support, and provide expertise to your clients - all while delivering an exceptional service experience. And in 2023, your clients have come to expect nothing short of an excellent experience with you and your organization.But, what steps can you take to demonstrate your commitment to your clients and prospects? And how can you leverage the quality of the service you provide to improve company reputation and accelerate growth?While there's no single answer to these questions, there are resources that your organization can employ to harness client satisfaction for growth. One powerful resource is a single metric known as the Net Promoter® Score, or “NPS®” for short.The concept was created by Fred Reichheld at Bain & Company and Satmetrix, and was later introduced as the Net Promoter® Score methodology in 2003 when Fred published an article in the Harvard Business Review - 'The One Number You Need to Grow'.

What is NPS? A primer for insurance providers

Even if you're not familiar with the concept of NPS, you've likely participated in an NPS survey.The NPS survey methodology asks your clients how likely they are to recommend your company to a friend or colleague using a numeric scale of 0 - 10, ten being extremely likely and zero being not likely at all. (Sound familiar?)The true power of the NPS methodology lies in reporting. To calculate NPS, responses to the survey question are divided into three categories:

• Promoters (9-10): Your most loyal, enthusiastic fans. These clients are highly satisfied with your services and are loyal to your organization. Promoters represent your strongest allies and are most likely to promote you to their networks.
• Passives (7-8): These clients are happy (for now) but demonstrate an indifference to their experience with you, and may consider taking their business to your competitors. While not as immediately concerning as detractors, these clients represent a risk to retention and company reputation. Put frankly, they cannot be expected to be loyal to your organization or promote your services to their own networks.
• Detractors (0-6): Your most at-risk group of clients. Not only are you at risk of losing the business of detractors, they are also the most likely to share negative feedback to their networks regarding their experience with you.

Your firm's NPS "score" is calculated by subtracting the percentage of detractors from the percentage of promoters. By way of example, ClearlyRated's lifetime NPS score is 84%, which is derived from the 86% of promoters across our company survey history minus the 2% detractors across our company survey history.86% - 2% = 84% NPS. Easy peasy.

What is a 'good' NPS score for an insurance provider?

When it comes to NPS, you have a few options for determining what constitutes a "good" score for your company.

1. Look at global NPS standards - which categorize 50% NPS as "excellent" and 70% NPS as "world class."
2. Compare your firm's NPS against competitors' scores. The 2023 Insurance Industry NPS Benchmark is 36%. But service leaders (winners of the 2023 Best of Insurance award) averaged 81% NPS this year.
3. Look to service leaders across industries. The chart below shows published NPS scores for brands across industries. You can begin to see how clients of recognizable service leaders like Nordstrom rate their company (75% NPS) versus, say, Comcast - a notorious service laggard - who received a score of -1%.

Why does NPS work?

• It's simple. Because it's a single metric, NPS is easy to measure, track over time, and use to benchmark your organization's client satisfaction and service quality against the rest of the industry.
• NPS is a data-driven approach relying on insights directly from the client. The concise format of the survey allows you to focus in on the information that really matters while taking the guess-work out of assessing how your clients feel about you.
• Time is everything (it's short!). People tend to turn and run when they see long surveys. And as much as your clients are ready and willing to provide you with feedback - they are protective of their time.
• It promotes transparency. By quantifying intangible concepts like client satisfaction and service quality, NPS provides insurance brokers and agents with a singular metric to weigh performance, set improvement goals, and to rally the team around. When everyone in the organization has a clear understanding of how their behavior can inform NPS, they'll begin to obsess over client satisfaction and service quality as a practice and a philosophy.

Next Steps with NPS

• Ready to get started with NPS? Contact the ClearlyRated team for insights, best practices, and a tour of our survey platform (designed specifically to support business service providers).
• Interested in additional data? View current NPS benchmarks for insurance providers.