USThe CallMiner
Churn Index 2020

Insurance
Organizations

The CallMiner Index 2020
for US Insurance Organizations

Insurance customers report rise in switching which see churn costs
increase to $2.59 Billion1 in the CallMiner Churn Index 2020
Two years ago, we commissioned a survey to ind out why US consumers leave providers. What we
uncovered was widespread switching – with call centers playing a pivotal role in whether consumers
stay loyal or decide to switch.
This year, we decided to repeat the exercise to see what’s changed. This report is based on the responses of US consumers who switched insurancecompanies in the last 12 months. It is a companion document for the complete US report which can be seen here. The total cost of churn for
insurance providers is $2.59 billion a $540 million2 increase since 2018.

1

Churn rate for insurance rises by over a quarter - moving the insurance sector downfrom 2nd place in 2018 to 4th place in 2020
The 2020 CallMiner Churn Index3 shows that, in the last 12 months, 25.4% of consumers said they had switched insurance providers.
However, while other sectors (banks, broadband providers and electric providers) saw much bigger increases in customer churn, theinsurance sector moved down from second to fourth place in terms of the percentage of customers who switched providers.
While the average rate of churn per consumer only increased by 12%, the insurance sector saw customer churn rise by twice as much (26%)
from 20.1% to 25.4%. This represents an additional 13.5 million insurance customers that switched compared to 2018, at a cost of $540
million to US insurance providers. Although high, this increase was less than one third the increase experienced by the banking sector, forexample – see Chart 1.
Chart 1 - Rates of switching per sector last 12 months - % increase / decrease 2018 to 2020
Broadband supplier / Internet service provider+92.6%

Bank+79.5%

Electric utility / Electric company+42.6%

Insurance company+26.2%

Gas utility / Gas company
Telephone / mobile company
Private medical company+22.5%-12.1%-24.8%
0%Bank

Insurance
Company

Electric utility/
Electric company

10%

20%

Gas utility/Gas
company

30%

40%

Private medical
company

50%

60%

70%

Telephone/Mobile
company

80%

90%

100%

Broadband provider/Internet provider

1. According to the United States Census Bureau there were estimated to be 254.714 million adults in the United States in 2019. Based on the results of the survey, 25.4% of the adult population =64.70 million insurance customers changed providers in the last 12 months. A conservative cost of acquiring a customer is $400 per person when incentives, advertising and administration costs are
considered. 64.70 million @ $400 = $2.59 billion
2. US adult population is 254.714 million. 5.3% more adults changed providers in 2020 than 2018. 5.3% of 254.714 million = 13.5 million people. 13.5 million @$400 = $540 million
3. The research was carried out for CallMiner by 3Gem Research & Insights. 2,000 US adults who had contacted a provider in the previous 12 months responded to an online survey in February 2020.

2

Insurance heading for a rise in churnMore insurance customers are planning to switch in the next 12 months (43%) than those who were planning to switch in 2018. This is morethan twice the increase in planned churn for electric companies, for example - see Chart 2.
Chart 2 - Increases in planned switching by sector since 2018

Broadband supplier / Internet service provider+72.5%

Bank+68.9%

Insurance company+43.4%

Gas utility / Gas company+31.4%

Electric utility / Electric company+18.3%

Private medical company

+2.7%
0%

Bank

3

Insurance
Company

Electric utility/
Electric company

10%

Gas utility/Gas
company

20%

30%

Private medical
company

40%

50%

60%

Telephone/Mobile
company

70%

80%

Broadband provider/Internet provider

Unplanned customer churn is avoidable and costs insurance
providers $703.2 Million4
In common with consumer behavior in other sectors, more insurance customers switch providers (25.4%) than plan to (18.5%). This meansthat 37% more consumers end up switching insurance providers than want to.
This represents 17.6 million customers and a cost of ‘unplanned’ churn of $703.2 million. As can be seen in Sections 6 and 11, many of thereasons for this unplanned churn are avoidable.

4

Price declines as a reason to switch providers and feeling unfairly treated increases
The 2018 CallMiner Churn Index uncovered that consumers wanted to stay loyal but were ‘forced’ to switch providers because of their badpractices. This year’s index shows that three of the top four reasons to switch relate to unfair treatment. The biggest increase since 2018 was
for feeling unfairly treated. This was up by over one fifth (22%) to 40.7% and is 18% higher than the average across all sectors. As a result,unfair treatment has moved to number two on the list of reasons to switch providers.
One third of customers (33.7%) switched providers because of not being rewarded for contract renewal (i.e. no reward for loyalty), a rise of
5% since 2018. Nearly as many (30.9%) people switched because of not getting the same discounts as new customers – up 4% since 2018.
Price remains the number one reason for churn, but declined by 24% to 55.1% This is significantly lower than the all-sector average. Price isalso the only reason out of the top four that has decreased since 2018 – see Table 1.

Table 1

Reasons for Insurance Customer Churn 2018 vs. 2020

Reasons for Insurance Customer Churn% 2018% 2020% change% 2020 US
average

Prices, rates are too high or have increased

72.1%

55.1%

-24%

60.2%

Feeling like you are not being treated fairly

33.3%

40.7%

+22%

34.6%

There is no reward for contract renewal i.e. no reward for my loyalty

32.1%

33.7%

+5%

32.4%

Discounts offered to new customers are not automatically applied to
my existing account

29.7%

30.9%

+4%

31.0%

4 The difference between the number of consumers who left their insurance providers and those who are planning to leave is 6.9%. 6.9% of 254.714 million US population= 17.58 million. So, 17.58 million x $400 (conservative cost of acquiring a customer) = $703.2 million.

5

Insurance sector worst for treating customers fairly
It’s clear from the responses to the survey that insurance customers think that they are not fairly treated and switch providers as a result.
When consumers were asked about their reasons for switching, the insurance sector ranked highest for feeling unfairly treated, not being
rewarded for contract renewal and, discounts offered to new customers not being automatically applied to existing accounts – see Chart 3.
These responses are proof that consumers resent the money spent on attracting new customers rather than rewarding them for theirloyalty. It’s a business culture that creates a very expensive and avoidable revolving door of customers.

Chart 3 - Changing providers because of unfair treatment - by sector

45.0%
40.7%
40.0%

37.0%

40.4%
38.0%

35.4% 35.7%

35.0%
31.6%
30.0%

33.7%
30.6%

30.5%
25.8%

25.0%

29.0%

30.8%

24.9%

30.9%

27.0%

23.5%

23.7%

28.3% 28.2%

30.7%

20.0%
15.0%
10.0%
5.0%
0.0%

Feeling like Im not being treated fairly

Bank

6

Insurance
Company

Electric utility/
Electric company

There is no reward for contract
renewal. i.e. no reward for my loyalty

Discounts offered to new cutomers are notautomatically applied to my existing accountGas utility/Gas
company

Telephone/Mobile
company

Private medical
company

Broadband provider/Internet provider

Insurers put their call centers under pressure with over 45 million5 calls that could
be satisfied by a self-service channel
The 2020 survey revealed that insurance customers still prefer using the phone – with 76.2% using it to contact insurers this year. The top
two reasons why customers contact an insurance provider are to resolve problems with the product or service (61.8%) or with charges(60.6%).
The next two reasons – making a payment and needing information – could be satisfied by self-service channels such as chat or website –see Table 2. This represents over 45 million calls that could be satisfied by self-service channels. In fact, 62.2% of customers would rather
handle making a payment themselves (self-service) if the information was easily available.
This gives a clear signal to insurance companies that they need to optimize self-service channels to handle simple tasks. Doing so will takethe pressure off their call centers and enable insurance providers to invest in ‘super-agents’ for more complex problems, meaning agents
who are intelligent, empathetic, empowered and genuine problem solvers.

5 If we look at the usage of the phone just by the number of insurance customers who changed providers in the last 12 months this equals 76.2% of 64.7 million i.e.49.3

million. So, of the 49.3 million insurance customers who telephoned a call center in the last year, 47.4% (23.37 million) called to make a payment and 43.9% (21.64 million) to
get information. The combined total of calls is 45.01 million.

Table 2

Reasons insurance customers contact a call center

Insurance Customers' Reasons for Contacting Call Center7% Insurance% US average% change

Needing to resolve a technical problem with the product / service

61.8%

62.5%

-1%

To resolve issues with the bill / service

60.6%

56.0%

+8%

To make a payment

47.4%

41.3%

+15%

Needing information about the product / service

43.9%

39.0%

+13%

Insurance call centers deliver a mixed
experience when it comes to changing
customers’ emotions during a callWith such a high volume of customers contacting a call center withproblems, it’s vital that agents meet their needs. But nearly one fifth(18.7%) of insurance customers report that their emotional statechanged from positive to negative during a call to an insurancecompany’s call center – see Table 3. However, this is 3% lower thanthe US all-sector average and lowest out of all the sectors.
About half of insurance customers recorded a change from negative
to positive emotions on their last call – 5% more than the US allsector average. This shows that some agents can resolve problems
and deliver a great experience. But other agents seem to deliver anexperience that is so bad it turns a customer with positive feelings
about the insurer into one with negative feelings.

Table 3

Insurance - Change in emotional state

Change in emotional state from before to after a call to a call center% Insurance% US average% difference

Negative to positive

49.4%

47.7%

+5%

Positive to negative

18.7%

19.3

-3%

Stayed the same

31.9%

33.1%

-4%

Table 4 shows the emotions for customers both before and after a call to a contact center. Nearly two fifths of insurance customers (39.8%)
arrive at the call center annoyed; the same number (39.4%) arrive frustrated, almost one in five (18.5%) arrive angry, and one in 12 (8.1%)
arrive ready for an argument! This highlights what a tough job it is for call center agents to satisfy customers.
It seems some insurance call center agents are good at taking the heat out of the situation. The highest response for the emotional state
after the call, by 40.4% of insurance customers, is ‘satisfied’. The number of people feeling annoyed fell by half (50%) from before the call,those feeling frustrated reduced by 44% and feeling angry reduced by 41% from before the call.

Table 4 - The impact of call center agents on customer emotions

Insurance%
difference

Changefrom
before toafter call

20.5%

20.1%

-2%

-50%

Frustrated

24.3%

22.0%

-9%

-44%

+21%

Hopeful

22.6%

25.0%

+11%

-14%

24.4%

+5%

Feelinglistened to

13.5%

13.6%

+1%

-44%

22.2%

22.8%

+3%

Upset

14.2%

12.0%

-16%

-47%

Confused

17.5%

21.5%

+23%

Confused

11.4%

14.2%

+25%

-25%

Angry

17.4%

18.5%

+6%

Angry

12.6%

11.0%

-13%

-41%

Emotionbefore acall

USaverageAnnoyedInsurance%
difference

Emotion after
a callUSaverage

41.0%

39.8%

-3%

AnnoyedFrustrated

40.5%

39.4%

-3%

Hopeful

23.8%

28.9%

Wantingsomeoneto listen to
you

23.2%

Upset

When compared to the average change in emotions across all sectors, insurance customers arrive in a negative frame of mind but seem toleave feeling more positive. For example, 8% more insurance customers than the all-sector average arrive ready for an argument but 41%
fewer leave a call angry. In fact, insurance customers have the lowest scores of all sectors for feeling angry, upset, frustrated and ignored
after contacting the call center.
The gulf between the impact of a good experience and a bad one highlights the need for insurance companies to invest in training superagents giving them the tools to perform at their best.

8

Insurance companies are worst at recognizing vulnerability – but are getting better
Insurance companies are the worst out of all sectors for recognizing vulnerable customers, with less than two thirds (63.0%) of customers
saying they were good at it. Yet this improved by 41% from only 44.8% in 2018.
However, just under a quarter of customers (22.4%) still think they are bad at doing so. Example interactions with vulnerable customers
include when a customer contacts an insurance company to handle things related to a deceased family member.

9

Bad call center experiences drive people away
Call centers play a pivotal role in an insurance customer’s decision to switch or stay loyal. An enormous 78.1% said they were likely or extremely
likely to switch providers if they had a bad call center experience - see Table 5. This is up 4% from 2018 (75.2%) and further demonstrates that it
is vital that call center agents are given the tools and training they need to deliver a great experience and keep their customers.

Table 5 - Likelihood to switch or stay loyal after a call center experience10% 2018% 2020% difference

Likely or extremely likely toswitch after a bad call center
experience

75.2%

78.1%

+4%

Likely or extremely likely toremain loyal after a good callcenter experience

87.3%

91.9%

+5%

Good call center experiences encourage
loyalty – Listening is key to success
The good news is even more insurance customers – nine in 10 (91.9%)
said they were likely or extremely likely to stay loyal after a goodexperience with the call center - see Table 5. This is 5% higher than thenumber of consumers who said they would stay loyal in 2018 (87.3%).
The ability to listen to customers is key to success. When asked about
their emotional state before a call to a call center, a quarter (24.4%) of
insurance customers said that they want someone to listen to them.
However, only just over half of those who wanted to be listened to feltthat they had been after the call (13.6%) – meaning almost half left thecall feeling ignored.
Managing a call in a way that converts an unhappy customer into a happy
one is therefore incredibly valuable. Insurers should give their agentsthe information they need to take the heat out of the situation by using
interaction analytics technology to analyze 100% of calls and identify
words, phrases and acoustic qualities that trigger a positive response
from customers who arrive unhappy.
Armed with this insight, agents can adjust what they say and how they say it according to the behavior of the customer. By providing
agents with access to post-call analysis it’s possible to identify best practices and reinforce positive behavior. Real-time analysis can also
identify when a call is deteriorating and prompt the agent in real time to adjust their approach in time to rescue the call and deliver a better
customer experience.

11

The 10 avoidable call center behaviors that annoy insurance customers and may
cause them to leave providers
As indicated in Section 7, most customers arrive at a call center in a negative frame of mind. Our survey results show that some call centers
practices make matters worse. We have highlighted below the top 10 call center behaviors that annoy insurance customers and provide
more reasons for churn. All of them are avoidable. Table 6 shows that insurance companies are annoying more customers than they did
in 2018 for six out of the 10 measured behaviors. The biggest increase is for call routing options that don’t include what customers need –increasing over one and a quarter times to 36.4%.
It’s time to invest in super-agents
It’s clear that insurance companies need to invest in empathetic, empowered, and intelligent super-agents, as the number two expectation
their customers have is that their problems will be resolved on the first call. Not doing so became the second most annoying call center
behavior – increasing by over two fifths (44%) to 41.1%.
It’s time to analyze every customer interaction to identify process weaknesses like waiting times
The number of insurance customers who find long waiting times annoying doubled since 2018 to 62.4%. As a result, long waiting times
became the most annoying call center behavior in 2020 – see Table 6. By analyzing every customer interaction, it would be possible toidentify the reasons for these failings and take steps to reduce or eliminate them.

Table 62020
Position

The 10 most annoying call center behaviors for insurance customers
Behavior to avoid

2018

2020

%
change1Long waiting times (#2 in 2018)

30.9%

62.4%

+102%

2

Failure to resolve my issue on the first call (#3 in 2018)

28.5%

41.1%

+44%

3

Call routing options that don’t include what I need (#11 in 2018)

15.8%

36.4%

+130%

4

Having to repeat myself from one contact channel to the next or fromone adviser to the next (#1 in 2018)

41.8%

30.7%

-27%

5

Calls that are cancelled/drop out after holding (#6 in 2018)

21.2%

28.9%

+36%

6

Calls that are mis-routed after speaking to a call center adviser (#8 in
2018)

18.8%

21.7%

+15%

7

Long messages before being routed to the right person or function (#5
in 2018)

21.8%

16.7%

-23%

8

Failure to follow up as promised (#13 in 2018)

12.7%

15.4%

+21%

9

Call center advisers that work to a script that means they ask sillyquestions or make silly comments which have no relation to theconversation (#4 in 2018)

24.2%

13.0%

-46%

10

Call center advisers that don’t seem to have access to my accountinformation and my recent interactions (#9 in 2018)

17.0%

11.0%

-35%

The good news is that insurers have gotten better at providing agents access to customer information and at not expecting agents to always workfrom strict call scripts that makes them ask irrelevant questions.
There are some things a call center can’t control in the battle for loyalty. But the survey results show that, with the right insight, there are many callcenter behaviors that could be avoided to increase the likelihood of a better customer outcome – and with it much less churn.
Insurers can use interaction analytics technology to identify process failures in line with these behaviors, such as calls dropping out and long waitingtimes, to ensure every interaction exceeds customer expectations and thus creates engaged and loyal customers.

To see the full results across all sectors, download a full a copy of the 2020 CallMiner Churn Index report here.

About CallMiner
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