This article originally appeared in the Jakarta Post.

Customer loyalty has been tough to come by in the insurance industry, especially for life insurers with fewer interactions with customers than, say, retail banks.

Yet in Indonesia and most other countries, for both the life and the property and casualty (P&C) sectors, one or two insurance carriers manage to excel in earning their customers’ passion and advocacy.

Some of these loyalty leaders are doing so in part by fusing digital and physical channels into a seamless experience that delights customers — what we call a “DigicalSM” transformation.

Bain & Company’s latest global customer survey shows that while customers are using online and mobile channels more frequently with insurers, most customers still demand phone or in-person channels for purchase, advice and other interactions.

Customers who are loyal promoters of their insurers stay longer, buy more, recommend the company to friends and family and usually cost less to serve.

Bain’s new survey of roughly 3,000 consumers in Indonesia was conducted through Research Now and Survey Sampling International. The survey measures loyalty by calculating the Net Promoter Score^SM (NPS®) for each insurance company, derived from responses to this question: On a zero-to-10 scale, how likely are you to recommend your insurer to a friend or a colleague?

The survey reveals important aspects of consumer attitudes and behavior:

• In Indonesia, the overall P&C insurance NPS is negative at -9 percent while life is positive at 4 percent. Asuransi Central Asia and Asuransi Sinar Mas earn the highest scores in P&C, while Prudential Life and Allianz lead in the life sector.
• Roughly half of customers research or interact digitally with their insurer, and their ranks will grow over the next three to five years. The strongest demand for a digital interface lies in product- and claims-handling mobile applications.
• Yet customers do not expect a fully digital insurer. Multichannel interactions lead to higher loyalty compared to online-only or offline-only approaches.
• Being in touch with customers has a large positive effect on loyalty for both life and P&C insurance in Indonesia.
• Globally, out of all touch points between insurers and customers, claims stands as a clear “moment of truth”, with a positive claims experience leading to greater loyalty.
• Customers consider price to be a key criterion for purchasing insurance, especially in P&C. However, the most price-sensitive customers tend to give the lowest NPS scores in the first year with a carrier. In the life sector, customers who purchase based on prior relationships and personal recommendations give the highest scores.

Earning customers’ loyalty, and motivating customers to actively promote the company, are both necessary for generating superior revenue growth. Bain’s work with Indonesian insurance companies suggest four specific steps that are essential to succeeding with a more customer-centered approach.

Mastering digital channels may be especially important for Indonesian insurers, given that many Indonesians are buying insurance for the first time and are already accustomed to digital and mobile sources of information.

But digital channels don’t replace physical channels. Customers still benefit from talking with a person when dealing with complex insurance products or transactions; that’s why multichannel customers give the highest NPS.

It’s no coincidence that NPS life leaders Prudential and Allianz have the highest share of customers surveyed using multiple channels.

Insurers can significantly improve the customer experience if they act quickly yet thoughtfully to build out digital channels for transactions and communications, transform their physical networks for higher-value services and redesign their processes to seamlessly integrate their various channels into a Digical model.

They should target investments in proportion to the value at stake by, say, digitizing processes to both reduce costs and please customers. Case in point: AXA Mandiri launched the first life insurance product sold online in the country, enabling customers to purchase life insurance product in a few clicks.

Being in touch regularly and in meaningful ways with customers builds loyalty both in P&C and life. During moments of truth such as filing a claim, it’s vital to exceed customers’ expectations and deliver a level of service and support that leaves strong, positive impressions.

This does not necessarily mean offering more generous claims payment policies.

Our survey results show that the experience of filing a claim and getting status updates often has a higher potential to delight than the subsequent payment.

Multinational insurer Allianz, for example, recently launched an app to allow customers to photograph medical invoices and submit them digitally. Customers can submit encrypted personal data and claims information within minutes from anywhere in the world, then use the app to track the status of submitted claims.

A quandary: Today’s fierce battle for new customers in P&C is largely won by price, yet price-sensitive buyers are more prone to switching later for a lower-priced offer. For the life sector, investment returns generally matter more to customers than price, though price is a high priority in standardized products like term life.

One way to deal with this problem is to avoid the most price-sensitive customers and use marketing that emphasizes other types of value. Given that customers acquired via prior relationships and personal recommendations have greater loyalty, it’s worth investing more to improve loyalty among existing customers.

That will increase the customer’s propensity to recommend their insurer and the insurer’s share of the customer’s wallet.

Loyalty leaders know they can’t be all things to all people. They often started with a mandate to serve a narrow segment of customers or they decided to define a narrow segment and put the needs of those customers first.

Over the past several years, for example, some insurers have launched micro insurance products for low-income consumers, a once-overlooked segment.

Allianz Indonesia partnered with microfinance institutions and rural banks to offer loan-linked life products. The company supplemented its successful Payung Keluarga term-life product, originally launched in 2006, with personal accident and home insurance riders sporting US$1 to $3 annualized premiums.

A seamless “digical” experience is what customers want and have come to expect from their insurance company. When it’s well executed and combined with the other principles detailed here, insurance companies can enhance their customer loyalty and turbo charge profitable growth.

Thomas Olsen and Harshveer Singh are partners in Bain’s Global Financial Services practice, where Edy Widjaja is a manager.