Michael Lawrence is distribution manager of intermediary only insurer, Highway Insurance. Having worked for the UK based insurer for 15 years, he writes about the topical subject of offshoring.
As with so many things in life it is often difficult to fully understand an issue until one has gained an insight through a personal experience.
I have just had the “opportunity” to challenge my views on the topical subject of offshoring.
I was recently involved in a minor accident whilst on my way to visit one of our broker partners. Nothing too serious, no one was hurt and I still made it to my appointment on time. I expected some inconvenience but had the peace of mind that both I and the third party were insured with large, composite insurers.
Later that day I called my broker to report the claim and seek expert guidance on how to progress my claim. My broker, as helpful as ever, gave me all the contact details that I needed, confirmed my policy excess and so on.
Almost by way of an advance warning did he tell me that some parts of the claims process were offshored by my insurer; he was actually apologetic.
I reported my claim to a UK based contact centre which organised for my vehicle to be repaired by a body shop just a few minutes drive from home. So far the service had been excellent; both the UK contact centre and the repairer were efficient, understood my requirements and were able to empathise with my situation.
I was then contacted by my insurer to go through some more details concerning the accident. I asked the operator where they were calling from as the delay between me speaking and them responding was irritating me. The operator was reluctant to tell me but eventually admitted that he was calling from an offshore location. The operator was polite, if a little too scripted, but did not understand some of the everyday terms and language that I used.
Despite a genuine desire to help there was a very definite lack of mutual understanding. This was no one's fault but, as the customer, I felt that I had lost the relationship that I'd previously had with my insurer and I was now uneasy with how the claim might progress. Six months later I am still struggling to recover my excess. It transpires that my insurer, from its offshore site, has advised the third party insurer of the wrong amount. A simple misunderstanding? It has left me questioning whether I would have received a different level of service from an insurer who doesn't offshore?
Is this an isolated lapse? Whatever the case, as a customer, my view formed from this experience is that the growth in offshoring has created a decline in service levels and a degradation of the customer/insurer relationship. Combined with a further concern that the increase in offshoring will reduce opportunities for the UK's workforce, I am not a customer who supports this approach.
With my other hat on, as a manager within a UK based, intermediary only insurer I naturally have to apply a greater degree of subjectivity to the argument.
Highway Insurance has no plans to offshore any of its services or functions but, if we did, there would most likely be some pretty compelling arguments for why we should.
Supporters of offshoring, surveys and the like have sought to demonstrate that there are skilled workforces, well equipped offices and every Finance Director's personal favourite, large cost savings to be had.
But what about the people who matter most: the customers and the brokers who supply us with business? What are their views on outsourcing the core functions of an insurance company to a third party half a planet away?