Developing incident response services
Risk management services reduce risk preemptively. Incident response services can reduce the cost of risk retroactively. Both can build brand equity for the service provider, while multiplying positive touchpoints with customers. In certain situations, incident response services are by far the most important dimension of an insurance product. Kidnap & ransom insurers are not valued for their ability to pay ransoms; they are valued for the negotiation skills that come with the coverage and improve the chances of kidnap victims being released unharmed. “We won’t make a drama out of a crisis,” was a tagline used for many years by Commercial Union, a forerunner to today’s Aviva. It reflects the reassurance that insurers can provide when they are well- equipped with tried and tested incident response services.
Advertising accounts for a large part of the high costs of customer acquisition
This is particularly relevant today, when customer satisfaction with auto insurers is at a low ebb, impacted by steep price rises as insurers have sought to recoup soaring claims costs. “Auto insurance customers are starting to shop for auto insurance like they shop for gas,” noted J.D. Power in its 2023 Insurance Shopping Study. Retention rates hit a six year low of 87% in 2023, down from 90% in 2018. Given these attractions, insurers might be expected to go out of their way to promote their roadside assistance services to motorists. But, consistent with the broader insurance market picture laid out in this report, these brand-enhancing services are rarely promoted vigorously by insurance companies. The power of such positive touchpoints to lift a brand is underappreciated.
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