Mystery shopping and EIOPA’s role: a sneak peek behind the insurance curtain

So, what exactly is mystery shopping?

You may have heard the term, but what does mystery shopping actually look like in action? It’s not as mysterious as it sounds. Essentially, it’s when specially trained individuals—mystery shoppers—pose as regular customers and interact with businesses to evaluate how well things are being done. Whether in person, over the phone, or through digital channels, mystery shoppers simulate everyday consumer actions like asking about products, seeking advice, or making purchases. Afterward, they report their experience in detail.

In the insurance world, these shoppers focus on key elements of the sales process and how products are explained, the quality of advice, and whether regulatory standards like transparency and fairness are being met. It’s a unique way of gaining real-time insights into the customer experience, and it helps businesses and regulators fine-tune their approach.

Why is mystery shopping so important?

When it comes to insurance, mystery shopping isn’t just about getting better customer service, it’s about ensuring that customers are treated fairly and in line with regulations. Here’s how the magic works:

• Assessing consumer treatment: Is the customer’s experience positive from start to finish? Are their needs understood and addressed? Is the information clear and easy to grasp? These insights help businesses enhance their service and make customers feel heard and valued.
• Compliance check: Insurance distributors must adhere to strict legal and regulatory requirements—everything from transparency to ensuring products are suitable. Mystery shopping helps spot check if these standards are being met, making sure consumers aren’t caught in a situation that could harm them.
• Spotting risks: Whether it’s pressure selling, unclear product explanations, or failing to disclose key terms, mystery shopping helps uncover potential issues before they turn into bigger problems.
• Boosting consumer protection: At its core, mystery shopping is about protecting consumers, by ensuring that products  are suitable, transparent, and aligned with their expectations.

How does mystery shopping benefit insurance distributors?

You might think mystery shopping is all about regulators but it’s also a goldmine for insurance companies and intermediaries looking to improve. Here’s how it can work wonders for them:

• Better customer experience: Mystery shopping helps businesses understand where service gaps exist. By addressing these weaknesses, they can improve customer satisfaction and loyalty, critical in an industry where trust is everything.
• Benchmarking against competitors: In a competitive market, it’s crucial to know how you measure up against the competition. Mystery shoppers can reveal strengths and weaknesses, helping businesses adjust strategies and stay ahead.
• Quality assurance and training: Mystery shopping results are perfect for training staff and ensuring services meet the highest standards. It can also pinpoint areas where employees may need more support or guidance to improve their performance.
• Cross-selling success: One often-overlooked aspect of mystery shopping is how it helps evaluate cross-selling techniques. Businesses can spot areas where they’re missing out on opportunities to offer customers additional products, boosting revenue.

Why mystery shopping is a game changer in the insurance industry.

Mystery shopping isn’t just a tool for regulators; it’s a key business strategy that can completely transform how an insurance company or an insurance intermediary operates. By mimicking real consumer interactions, mystery shoppers uncover valuable insights that go beyond customer service giving businesses an innovative front-end, distribution tool identifying areas for growth.

Here’s how mystery shopping can elevate your business:

• Optimise sales & marketing: By assessing the effectiveness of current strategies, businesses can refine their sales tactics and marketing messages to improve conversion rates and drive more business.
• Leverage digitalisation for effective sales processes: Digital tools and analytics from mystery shopping can provide real-time feedback and data, helping insurers streamline their sales processes, identify trends, and make data-driven decisions to enhance customer experience.
• Develop products that customers actually want: Insights from mystery shopping can feed directly into product development, ensuring new offerings align with what customers truly need and want.
• Enhance brand reputation: Consistently delivering exceptional service builds trust, which in turn boosts your company’s reputation. A strong brand doesn’t just follow regulations—it stands out as a leader in customer care.

In short, mystery shopping is a win-win for both regulators and businesses alike. It helps companies stay compliant, improve customer satisfaction, and become more competitive in an ever-evolving market. It also keeps consumers safe, ensuring they receive fair and transparent treatment.

Ready to dive into mystery shopping?

If this all sounds fascinating (and we bet it does), you're in luck. PwC and APCAL are hosting a specialised training session where you can learn all about the ins and outs of mystery shopping. It’s the perfect opportunity to deepen your understanding and discover how this tool can help you and your business thrive.