Challenging Customer Service Perceptions

Simon Cooter discusses the importance of keeping pace with customer expectations

 

Simon CooterAt a recent internal event, we asked delegates to name the company they most admired. Present company obviously excluded, it was revealing but disappointing that out of over 25 responses, not a single firm named was an insurance company.

Interestingly, the reasons given for many of the answers centred either on innovation or the customer experience. Apple featured for innovation and customer service, local businesses got a mention, including an independent cycle shop that had grown steadily on good old fashioned values of great service before and after the sale. Amazon was described as the most customer-centric company on the earth; there seems to be no limit to the product range and speed they can deliver either from their own shelves or through their ‘market place’, and John Lewis won praise for its traditional values.

First Direct was the only financial services firm to get a mention for consistently delivering great service; they answer the phones when you ring, from the UK, they do it nicely and their staff seem empowered to get things done. It’s not rocket science and, if banks can win customer praise, then surely insurance firms can too?

It’s true; every industry has upped its game which means today, getting it right for your customers and treating your customers well is more important than ever. Unhappy customers have always told more people about their experiences than happy customers, and social media now means that many more people get told, much more quickly. The reality is customers (or prospective customers) have higher expectations and more choice than ever before.

In service industries, simply being cheaper, or perceived as cheaper, than your competitors is a short term approach. Ryanair were famously dismissive of customer feedback, working on the assumption that customers were happy to fly with them as long as the headline price was cheap. Within a year of changing tack, and introducing a more customer focused strategy, their profits grew by 32%, with more customers flying and paying more per head for the privilege. Its chief executive, Michael O’Leary is quoted as saying that ‘Being nice to our customers is a new and winning strategy’ perhaps wishing that they’d thought of it earlier.

This change of approach by Ryanair recognises how society is changing. Consumers, and indeed businesses, have higher expectations. They want value for money, but they equally demand great service. Most of all they want to be able to buy things, or get things done, with a minimum of fuss, in a way that’s relevant to them. These are all consistent features of businesses praised for their customer service.

So being part of an industry languishing behind in the customer satisfaction stakes, we should ask ourselves, are we moving fast enough to meet customer needs? How often is the customer truly at the centre of our decisions?

Industry bodies from the CII to BIBA have recognised the problem we face. ‘Delivering our promise’ was the theme for BIBA in 2015, a statement (or a challenge!) that can equally easily be made to insurers and brokers. It got me thinking about how good our market is at defining our promise and in turn delivering it and whether we meet the changing needs of our customers. Being really truthful, the answer, is probably ‘not very good’. It may sound bleak, but if we fail to act, we’re sitting ducks for a market disruptor to harness customer dissatisfaction and use it against us and frankly, if we do nothing, this is the most likely outcome.

But it’s not all doom and gloom. Amidst all the market restructuring there are customer champions working in businesses across the industry, competing to claim the hallowed customer service territory that is and has been largely unoccupied until now. Indeed, I’m very proud that Covéa Insurance have been among those trying to break away from the pack to be identified for their focus on customer service. It’s finally moving the conversation with brokers and customers away from price, which has been an obsession in our market for too long. I’m not saying price isn’t important, simply that it’s value that counts.

This is good news for brokers too. Whenever I talk to independent commercial brokers, whether the CEO, broking staff, or account executives dealing with clients day in day out, they all say it’s an incredibly competitive market. Organic growth is an aspirational goal and every new business opportunity feels like a cup-tie. The only way to stop this race to the bottom, is to try and focus on winning and retaining clients who value, and will pay for, a better proposition. A better wording, one tailored to their specific needs; a strong claims service, one where genuine first party claims are paid without fuss and third party claims are defended fairly, but robustly. As insurers, this means supporting brokers and customers with systems and processes that are open, fair and consistent, where there is flexibility to handle customer needs in a way that suits them, and where there is an open and customer friendly approach. Most importantly, we need to invest in people with the right attitudes, and empower them to deliver for our customers.

Many brokers I know and that we work with tell me it’s not uncommon to meet with prospective clients who have cover that is simply not fit for purpose, who are under insured or inadequately insured, who need help in placing their business with a company that gives them the cover they need, who will support them, should they need to make a claim. The difficulty for the customer is in how can they differentiate between insurers, when all they have is price to go on?

Brokers are uniquely placed to provide customers with the benefit of their market insight. They know which insurers are genuinely committed to working for the benefit of customers and can use this market knowledge to add value to their proposition. As insurers, it’s up to us to prove ourselves and deliver on service both to our broker partners and our customers so that individually, and as an industry, we build trust and confidence in our service proposition.

An obvious place to start is listening to and acting on customer feedback. The Institute of Customer Service is making a good job of cornering the market for independent customer service audits across a whole range of industries, allowing individual and sector benchmarking. Without naming names, insurance companies who have taken this route seem to fare better on the industry customer service rankings, with clear progress being made. But listening to broker and customer feedback surveys are equally valid customer satisfaction measures.

Technology too has its part to play in making it easier for insurers to service the needs of brokers and their clients, but interestingly, having recently launched our commercial lines ‘e-trade your way’ proposition, it isn’t the technology that has gained the broker plaudits as much as the underwriting team that sits behind it. A guarantee of dealing with quote referrals within 30 minutes, and more importantly doing it really well, is what brokers seem to value the most.  The technology may make the process faster, simpler, more readily accessible, but the added value comes from knowing you can speak to someone quickly and get a decision when you need it. This goes beyond basic competence; we hope it demonstrates understanding of the broker’s requirement, and it pays off.

As we’ve seen from the examples of companies doing it well in other industries, it hasn’t reduced their profits, it’s helped them to grow For me it’s a no-brainer, the most successful insurance businesses in the future will be the ones who best understand the needs of their customers and do their best to meet those needs. It has to be the way forward, surely?

 

This article first appeared in Insurance Age

 

-Ends-

 

Notes to Editors:

About Covéa Insurance

Covea Insurance plc is the UK underwriting business of leading French mutual insurance group Covéa, who are number 1 for property and liability insurance in France, generating over 16.3 billion Euros in premiums in 2017.  

Covéa Insurance looks after the insurance needs of over 1.5 million policyholders; delivering financial reassurance through its Standard & Poor’s A+ stable rating, as a guaranteed subsidiary of Covéa. 

The company offers motor, household, protection, pet, mid and high net worth insurance and a range of commercial insurance products, through a range of distribution channels. Employing over 1800 people, Covéa Insurance has a strong people and service ethos, having Investors In People Gold accreditation and is signatory to the HM Treasury Women In Finance Charter. It also has World Class service accreditation from the Institute of Customer Service for its Motor Claims, Home Claims and Underwriting Services teams as well as Chartered Insurer status for its Commercial and Mid/High Net Worth business.

In 2018, Covéa Insurance were recipients of the Personal Lines Insurer of the Year award at both the British Insurance Awards and the Insurance Times Awards and was the top rated insurer in the Insurance Times Broker Service Survey for both Personal and Commercial Lines.

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