Text messaging has changed the way people communicate. Many people use SMS texting when they want to connect with their friends. Increasingly, people are also using text messages to connect with businesses. Texting even has a place in insurance policy services, and it may help improve insurance communication.
Good Communication Is Essential
Things tend to break down when communication fails. Insurance processes are no different.
Publicis Sapient conducted a survey to pinpoint the top frustrations that claimants face. In addition to delayed payouts, small payouts and claim denials, people were also upset about a lack of information and the claims process and an inability to reach claims staff. They were upset about poor communication.
A lack of communication can be a problem even when there hasn’t been a claim. If a policyholder’s automated payment hasn’t gone through, they need to know – before their policy is cancelled. They also need to know about renewals, rate changes, the availability of new policy documents and other important updates.
LexisNexis found that policyholders really do want to hear from their insurers. Based on a survey, 74% of policyholders want insurers to reach out during renewal and 57% want insurers to reach out during the policy term. Furthermore, 39% want to hear about additional coverage, 31% want to hear about bundling options. However, only 46% of policyholders report any contact from their carrier during the policy term or renewal.
To boost policyholder satisfaction and avoid problems, the lines of communication need to stay open. This can be done using a variety of different channels, but more and more, text messaging makes sense.
The Appeal of Text Messages
Texting is incredibly popular. According to Value Penguin, a 2021 survey from Klaviyo found that 51% of Americans said they had increased their use of texting over the previous 12 months. No other channel saw an increase this big. The survey also found that 85% of people had received text messages from a brand.
Texting is appealing for a lot of reasons. Compared to email, texting can be faster and seem more urgent. Text messages tend to have a high open rate compared to emails. At the same time, although text messages often get a prompt response, they don’t require an immediate response. Unlike with phone calls, you can wait a few minutes to respond without getting caught in a game of phone tag. Many Millennials don’t like answering the phone or even using voice mail, as this New York Times article explains. Texting is a convenient alternative.
The Many Uses of Texting
Insurance companies can use text messages in multiple ways. Here are just a few of the possible uses:
- Sending important alerts. This might include information about a renewal or rate increase, as well as the availability of new policy documents or imminent policy cancelation.
- Sending payment information. Insurers can send payment reminders to help policyholders avoid missed payments. Texts can also be used to send payment confirmation or messages about payment issues, such as a scheduled payment not going through.
- Providing claims updates. It’s important to keep policyholders in the loop during the claims process. With text messages, it’s easy to send claims status updates.
- Marketing new products. Your current policyholders may be interested in other insurance products and risk management tools. Text messaging can be a cost-effective way to launch cross-selling marketing campaigns.
Navigating Texting Pitfalls
There are many reasons to use text messaging in insurance communications. However, it’s still a relatively new communication channel, and there are some pitfalls to avoid.
It’s important to maintain your brand’s voice. Text messages are often filled with misspellings, abbreviations, slang and emojis, but this doesn’t mean that your text messages should be this informal. Whether you’re using SMS text messages, email or phone calls, you need to think about the tone and strive for a consistent voice.
Regulatory compliance is another key issue to consider. For example, the FCC bans text messages sent using an autodialer unless the recipient has given consent. For commercial texts, consent must be given in writing. The recipient must also be given the option to unsubscribe from future messages. Before sending text messages, insurance companies should review all relevant regulations, including the Telephone Consumer Protection Act (TCPA) and CAN-SPAM.
Using texting in policy services is one way to improve insurance communication. Do you need some customer service support? Covenir can help with quality, customized outsourced policyholder services. Learn more.