Mergers and acquisitions abound in the property and casualty insurance world, and the trend is likely to continue. M&A activity among insurers continues to expand, both in the number of deals made and the total value of those deals.
For insurance customers, though, mergers and acquisitions can be cause for wariness. Customers who like their current insurer may think twice about renewing if they suspect a merger or acquisition will change the nature of that trusted relationship.
Here’s how insurers can address customer concerns and maintain trust during a merger or acquisition.
M&A deal-making tends to focus on the benefits to the parties involved. Sometimes, this focus is so intense it overlooks customers’ interest in the deal. Customers learning about a deal after the fact can feel sidelined or ignored in the process.
Yet now, more than ever, M&A deals in insurance are made with customers in mind. In fact, EY’s Martin Spit predicts that insurance mergers and acquisitions in coming years will include more deals focused on improving the customer experience, often through accelerating digital transformation.
Focusing on customer pain points can help insurers find a way to talk about upcoming mergers and acquisitions. For example, much M&A activity in 2021 and 2022 is likely to center around improving supply chain resilience, write PwC’s Brian Levy, Malcolm Lloyd and David Brown. People from all walks of life are already seeing the impacts of supply chain disruption in their daily lives, so news that businesses are working to improve matters is likely to be welcome.
Insurers don’t necessarily have to address supply chain issues, of course. They can transfer their understanding of customer pain points to insurance-related topics.
For instance, KPMG’s Orson Lucas notes that customers are concerned about the privacy and security of their data. If a merger or acquisition boosts an insurer’s ability to protect customer data, focus on that feature to demonstrate that the new relationship is in the customer’s best interests.
Insurance companies that share customer-centric M&A goals with their customers can build trust by demonstrating that customers are an essential consideration in the deal-making process. Another way to build customer trust during a merger or acquisition is to engage customers in the process itself.
Customer references and referrals are an important part of marketing for many P&C insurers, but they have a shelf life. Customer testimonials that refer to the pre-merger or acquisition companies mean less after the new relationship has been established. Companies seeking to maintain the value of customer input “should create a bridge between the old brand and the new brand, transferring its weight of impact on the market,” writes Guy Yehiav, president at data-driven IoT solutions provider SmartSense.
By incorporating customer feedback and perspectives into this bridge-building process, insurers can build customer relationships and transfer brand clout at the same time. Customers feel heard when they are asked for their views or see other customers like themselves having a chance to contribute. This sense of feeling heard translates into greater trust and can boost loyalty.
Mergers and acquisitions can mean big changes for businesses and customers alike. When customers clearly understand the reasons for the change and are given opportunities to be heard, they are more likely to embrace a change. Building customer trust during M&A activity can boost customer loyalty and ease the challenge of transition.
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