Tim suggests that there is a gap between sales promise and service delivery, making some great points around the view that the claims process is a particularly problematic area.
My view is that the problem goes further than that and will ultimately take more than a “service orientation” to solve.
For a start there is the disconnect between the industry and its customers. I think that there is complacency in the insurance world over this issue, summed up for me recently when a senior insurance figure said that “insurance service isn’t as bad as people think”.
Well I’m sorry, but if people think it is bad — it is. Your customers are the experts on service and it’s particularly important that senior insurance figures don’t forget this.
This is partly down to focus. People think that service is what happens when you claim or interact, but it is wider than that.
It is every interaction however small or big. It is a focus on meeting customer needs and understanding the relationship and transactions from their perspective — and making their lives simpler. Yes, advice is part of that and claims are part of that.
However, it should be about how insurance can fit into people’s lives, not the other way round.
People’s expectations of service have moved on significantly in the past few years and I think that the insurance industry still struggles to understand that shift.
The current structure suits the insurer, not the customer
In a world where I can choose an app in the Google Play store on my desktop and install it on multiple mobile devices remotely, the hoops that most insurance companies make you go through to make a simple change to say your address (especially as they will charge you for the privilege) is verging on the insulting.
Whilst I hesitate to use the Uber example, it is a salient reminder of an industry that has been turned on its head through service. By hiding the complexity of the underlying business — the logistics of getting a taxi to you in the most efficient way — behind a stunningly simple user interface, Uber has developed a service that people really value.
So, where a company like Uber will obsess about the customer and recognise that how you interact with them (digitally or otherwise) is the expression of your brand, the insurance industry still delivers its service as a series of disconnected interactions that mirror its internal structure. It sees each silo as a separate business, even to the point of outsourcing some of its delivery, for example, to 3rd party claims companies.
The crucial point to remember here is that this structure suits the insurer, but not the customer for whom this disconnect is both mystifying and frustrating. I think that the industry struggles with communicating its value to the customer and this may be at the heart of the issue.
Insurance is a complex business, with its own language and jargon that is difficult to explain. It is badly understood by the general public and this breeds a culture of mutual distrust, which devalues the service and drives it to a place of undifferentiated price competition.
We believe that this causes a race to the bottom and an increasing focus on reducing costs and with it, service. This is a fundamental and self-fulfilling problem and one that will only be broken when the industry can demonstrate value to its customers.
Change on this basis will only come through designing a complete and holistic service offering that puts the customers needs at the heart of the offer. And one that covers the whole customer journey from intent to renewal.
That means listening the customer and recognising where insurance can fit into their world and co-creating solutions with them, rather than for them.
Of course, there are examples of exemplary work and there are brokers who fulfil the service role admirably. But they are the exception rather than the rule. I could go on but hopefully you get my point.
True service orientation is about making people’s lives better by solving their problems, satisfying their needs and connecting with them on an emotional level.