The insurance industry won't be able to improve its public image until it can exceed its customer service expectation, says Malcolm Harvey
The Insurance industry's marketing literature is peppered with declarations of a commitment to customer service, yet its reputation languishes near the bottom of the pile in the minds of consumers.
The intangible nature of insurance is regularly cited as a reason for not meeting policyholders' expectations, especially when it comes to a claim. Managing those expectations remains a challenge. The claim experience is, arguably, the only tangible outcome of an intangible product - and as such must be the focus of service delivery.
Surveys on policyholder attitudes have shown that claimants perceive a need to 'boost' claims values because they believe insurers will erode their pay-out in a bid to control costs. The industry considers it fraud; it sees it as a 'hassle factor'. If consumers perceive the industry in this light is it any wonder that reputation levels are low.
Attitudes to and expectations of insurance are driven, in part, by commoditisation. But, I believe the pace is being set by the fast moving consumer goods sector. Service is a key aspect of its offering, as is managing the customer experience and exceeding expectations.
There are two examples from this sector that focus my mind on what service really means.
If your new washing machine is faulty you don't expect to load it in the back of your car and return it to the manufacturer. You turn to the electrical retailer who effectively takes on the problem and arranges a solution. The retailer ensures expectations are met and the manufacturer's reputation is protected. Insurance intermediaries can play the same vital role from an insurance perspective.
The second example comes from a senior UK insurance broker. While on business in the US, staying with friends, he decided to order a pizza. The broker called the local delivery service and the conversation went something like this.
"Good evening Mr Smith. Thanks for calling Domino's Pizza. Will it be your usual cheese pizza?"
The broker explained that he was calling from his friend's house and placed his order.
The conversation continued: "That will be $10. If your pizza does not arrive in the next ten minutes it will be free."
Needless to say it did and, in relaying this story, the broker mused. "We have customers who pay £10,000 a year and don't get anywhere near that level of service." Lesson learnt? Let's hope so!