Stock performance analysis from Watermark Consulting finds that being good to policyholders really does pay dividends
Toronto, ON (July 7, 2016) – Insurance companies that deliver a great customer experience are rewarded over the long-term, by consumers and investors.
That’s the conclusion from customer experience advisory firm Watermark Consulting, based on its new analysis of stock market returns for insurers that lead in customer experience versus those that lag.
The analysis focused on model portfolios of the Top 5 (“Leaders”) and Bottom 5 (“Laggards”) publicly traded insurers in J.D. Power and Associates’ annual Insurance Satisfaction Studies.
“We found that the fortunes of Insurance Customer Experience Leaders and Laggards diverged in a dramatic and revealing way,” explained Jon Picoult, Founder and Principal of Watermark Consulting.
He continued: “Leaders far outperformed the industry index, while Laggards trailed it. And the performance gap wasn’t small – over the seven year period examined, Leaders delivered average annual returns that were at least double that of the Laggards.”
“Insurance providers may publicly tout the importance of customer-centricity, but behind the scenes, many are skeptical that such a strategy pays off,” Picoult noted. “As a result, they continue to cling to archaic business practices that create complexity and confusion, further stoking customer frustration.”
“But,” he continued, “as the Leaders in this study illustrate, there is a better way.”
Insurers that impress policyholders reap the rewards – in the form of increased loyalty, greater wallet share, stronger word-of-mouth and a more competitive cost structure.
Summing up the findings, Picoult alluded to the serious challenges facing the industry: “Insurance companies are struggling to set themselves apart in a marketplace that increasingly views their products as commodities.”
He concluded: “As the Leaders in this analysis demonstrate, the best way to break out of that ‘sea of sameness’ is to deliver an end-to-end customer experience that turns everyday policyholders into true raving fans.”
A white paper is available which describes the study and its results.
Insurance customer experience leaders outperform the market
Watermark defines Insurance Customer Experience Leaders and Laggards as the Top 5 and Bottom 5 publicly traded insurers in J.D. Power and Associates’ Auto Insurance Studies (2010-2016) and Home Insurance Studies (2009-2015). Comparison is based on performance of equally weighted, annually readjusted stock portfolios of Customer Experience Leaders and Laggers
About Watermark Consulting
Watermark Consulting is a leading customer experience advisory firm that helps companies impress their customers and inspire their employees. Watermark has worked with some of the world’s foremost brands, helping organizations capitalize on the power of loyalty, both in the marketplace and in the workplace. To learn more about Watermark’s consulting services or educational programs, please visit www.watermarkconsult.net.
Source: Watermark Consulting