PURE insurance is using its customer-obsessed business model to stand out in the insurance industry. Since its start in 2006, PURE has grown more than 40 percent each year, and has one of the highest Net Promoter Scores in any industry.
Entering the crowded, competitive insurance industry was no easy task. PURE knew it would need to stand out. That's why the founders decided to go with a member-owned business model (called a Reciprocal Exchange) that would help differentiate the insurer from other insurance companies owned by shareholders. At PURE, owners as members means alignment between business and customer goals. The company deepens and reinforces this commitment in several ways:
Targets a Select Group of Customers. In addition to creating a member-owned business model, the founders of PURE also focused on a market niche with a distinct and attractive profile. The insurer targets responsible, high-net-worth customers. For its homeowners' insurance policies, for example, the homes of potential policyholders must have a reconstruction cost of at least $1 million. The company selected this segment because high-net-worth customers represented a favorable risk profile. This, coupled with the fact that the niche lacked significant competition, created an opportunity for PURE to offer highly competitive premiums and still be profitable.
Use Customer Focus to Identify Opportunities for Differentiation. PURE surveys all customers who have a claim interaction with the company. It reviews the survey results, looking for patterns and opportunities -- and often finds them. For example, it noticed that customers were unhappy with the settlements they received for jewelry claims. Like other insurers, PURE limited its coverage within the homeowner's policy for lost jewelry to a maximum of $5,000. Given the high-net-worth of its customers, however, jewelry collections were often worth significantly more than $5,000, so PURE raised this coverage amount to $50,000. PURE's average claims settlement in this category has been $14,000, and customers with jewelry claims are significantly happier.
PURE also reviews new product and service ideas with a committee of customers. PURE's Subscribers Advisory Committee (SAC) is a customer panel that advises senior leaders on decisions and speaks for the membership. PURE consults with the panel before deciding to pursue new products or services. This process helps the company avoid costly missteps.
Build a Culture Of Customer-Obsessed, Emotionally-Intelligent Employees. PURE's employees are critical to delivering its superior member experience. To help them provide great experiences, PURE trains and coaches employees on empathy and emotional intelligence. The company worked with TalentSmart to develop the PURE EQ program. Employees first complete evaluations that assess self-awareness and other traits. They then spend a day in training, using role-playing scenario to practice how to respond to different emotional states. After the training, employees pair up, and work together on their development areas.
For more information about how PURE Insurance built a customer-obsessed business model that is helping it thrive in the insurance industry, read the full case study.
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About the Author: Sam Stern is a Senior Analyst at Forrester Research serving Customer Experience professionals, serving Customer Experience professionals. Learn more about Forrester's customer experience practice at forrester.com/customerexperience.