Banking Review

Online innovations in car insurance

The personal insurance market in the UK changed dramatically with the advent of aggregators. Rather than the disenfranchising the intermediary channel, which was one of the core dot com strategies, the online aggregators created a price war amongst UK car insurance providers.

One of the largest aggregators in the UK, The Car Insurance Megastore, provides online only comparisons and quotes for more than 317 insurance companies and their car insurance policies. Since its inception 6 years ago, The Car Insurance Megastore has focused on providing an easy-to-use online customer experience.

Online innovations have been crucial to the success of the company in a fiercely competitive market. Firstly, all customer applications are monitored in real-time. This allows any errors in an application to be identified and rectified prior to submission to the insurance underwriter. This unique approach ensures customers are provided accurate quotes and accurate applications.

Click to call support services have also been implemented to help customers obtain a quote and apply for their policies online. This has increased quote and application completion rates and greatly increased customer satisfaction. In the past 12 months, only two complaints have been made by customers.

The Car Insurance Megastore was the first insurance company to offer flexible online payment options. Customers can modify payment options online via a secure administration service. Policies can also be purchased via Google Checkout, in another move to encourage more customers to safely complete online insurance transactions.

Text messaging is the latest innovation implemented by The Car Insurance Megastore. SMS messages are automatically generated when various conditions arrive within a customer’s quotation or policy lifecycle. The opt-in service allows customers to receive messages when their application has been approved, is up for renewal or when a payment is required. The company also sends a copy of generated quotes and marketing messages via SMS.

In-house research by the company revealed that customers preferred to be kept up to date about their insurance via SMS. Customers were much more likely to respond to an SMS request than an email or telephone call.

The return on investment has also been significant for The Car Insurance Megastore with not only the response rate to outbound SMS requests being significantly greater than other channels but with the cost significantly less than calling landlines or mobile handsets.

Locally, insurance aggregators have not had the success of their UK counterparts. However, local insurance providers are beginning to explore online payment options. Some have begun to use click to talk and SMS to support customers through the online application process. GIO provides click to talk services if a quote cannot be provided online. AAMI has taken a different approach by providing click to talk customer support at any level of interaction on the website.

Angela La Sala, Process and Applications Manager at Suncorp, owners of AAMI, told Online Banking Review, “The response (to click to talk) from our online customers has been extremely positive. Customers are surprise by the ease of use and how immediate the service is. It has boosted customer confidence in the AAMI website to know that there is staff behind the site supporting customers.”

“Click to talk has allowed us to have continual and immediate feedback from our customers, rather than rely on sporadic ad hoc research before making changes to improve the AAMI website,” La Sala explains.

“It provides exceptional customer service and allows customers to contact us immediately whilst online, as opposed to waiting on a call centre phone queue or response email. Customers online expect immediate service, click to talk allows us to deliver this level of service.”

AAMI embraced SMS as a customer communication technology in 2007. SMS reminders are issued for renewal and new business notices that are due.

How long will it take for online, two-way communication channels between insurance companies and customers to become a standard customer service offering in Australia?