Andrew Holt says poor service levels have become associated with offshore call centres, but now the problem seems to be closer to home

New research by Consumer Intelligence makes the stark claim that motor insurance providers could be losing 30% of new business and damaging their brand as a result of poor call centres, whether based here or abroad.

The research compared 20 leading motor insurance providers and tracked consumers' perceptions before the call, their experience during the call, and their propensity to buy after the call had been completed and a quote obtained.

"A poor call centre experience dramatically decreases a consumer's propensity to buy, even if the insurer has a cheaper price," says Ian Hughes, managing director of Consumer Intelligence. "The biggest bug bear consumers had was with foreign call centres, not for xenophobic reasons but because they simply could not understand the person at the other end of the phone and justifiably didn't feel confident in the supplier."

But the survey included both offshore call centres and domestic based ones, highlighting that poor service levels are not just a product of offshore centres.

And there are real business benefits from having good call centres. The research showed that a good call centre can increase conversion rates by over 20%. This makes a gap of nearly 50% between the worst and best call centre performances.

"The research proves conclusively that while price is the leading indicator of people's propensity to buy insurance, good processes and a well trained agent can make all the difference," adds Hughes.

One of the major problems insurers face is that consumers' expectations are higher than ever and more importantly those who use the phone to buy insurance are less price sensitive and more service orientated as consumers.

"If a consumer's experience falls short of their expectation - on either price or service - then they invariably buy elsewhere. Worse still, they tend to remove those companies from their short list of suppliers. In reality, this means a poor call centre is not just hurting your present sales but also your future ones," says Hughes.

As a breakdown of how consumers buy motor insurance, Consumer Intelligence showed that about 50% use the internet, 45% use the phone and the remaining 5% check the internet for prices before phoning to make the purchase. IT