ARE INSURANCE CUSTOMERS DEMANDING OR THEY HAVE NOW REALISE THEIR POWER?

Today insurance customers wish they do not step foot in the insurer’s office but also wish to be part of each of the processes. Today customers want the flexibility to achieve their comfortability. If an insurance company fails to understand this, then it would be difficult to satisfy your customers. The question is, how insurance companies can bring flexibility in their customer delivery service to make policyholders comfortable.

Most insurance companies are given attention to customer service delivery. They are beginning to value and appreciate their customers. Most of them are now putting the customer at the heart of the business. Most believe they exist because of the customer. Insurance companies have realised the lifetime value of keeping a customer.  Most insurance companies tailor policies to meet the exact needs of customers. Despite all these efforts, there is no significant effect on their market performance. Most insurers measure market performance base on three main factors. These consist of being successful in achieving a larger market share, growth in gross premium and achieving customer satisfaction.

Are today Customers demanding so much or insurance companies do not understand how customers want to be treated? From a customer’s perspective, quality service is perceived in two dimensions, made up of “output” and “process”. Customer service is how a product or service is conveyed to the buyer and the actual outcome of the process.

Some insurance company’s staff do not care about customer service. You enter their office and the first impression is people who have been trained to put up a certain face.  Because of this, it fails most often when a little frustration set in. I have been to an insurance company’s office where I had to stand for a while because the receptionist was engaged in a private conversation and also had her bag on the visitor’s chair. She did not care who I was and what I have come to do in the office.

Other insurance companies who are doing well have paid so much attention to the ‘output’ component of the customer service delivery but have neglected so much in the ‘process’ aspect. Insurance companies decide to pay claims within days but fail to simplify the process for the claims to be paid within the days. For instance, what are the flexibilities and comfortabilities when it will take the claimant months to attain a police report before the claim is paid within days?

These five elements below when performing well would lead to customer satisfaction.

 

Timely delivery + Regular Communication + Reliability + Simplified Processes + Innovative Delivery Output

 

Customer service delivery does not end when a customer purchases insurance and receives his documents. Customer service does not end when a customer takes your policy and monthly deductions start to go through. Some insurers even fail to inform their customers when deductions seize and use them against them at maturity of the policy.  Quality customer service runs through the entire life of the customer. What is most important is that only customers define and determine whether they are satisfied or not.

Quality service is the result of the comparison that customers make between their expectations about service and their perception of the way the service has been performed (Grönroos, 1984; Parasuraman et al., 1994). Lehtinen and Lehtinen (1982).

Insurance customers do not come into contact with their insurers at two main stages as some insurers might think. Some companies think these two main stages are the proposal stage and the second is when they are making a claim. Customers always have with them expectations they want from their insurers. This means that, the people who represent the companies need to carry with them quality customer service in all their endeavours. Customers would easily associate your bad service in other areas with the insurance company you represent. If quality customer service is a brand of an insurance company then it should also be a personal brand for all the staff who represent the company. We normally say that culture is the way we live. That culture is part of us in all that we do. We do not drop it at some point and take on a different culture. Insurers should know this and exhibit it in all aspects of their lives.

Insurance is a means to bring the insured to its original economic position after he has suffered some loss. Insurance normally gives an assurance. This is the impression created in the mind of the insuring public. Firstly, this is the outcome the insuring public expect. Secondly, how this assurance is going to be delivered is also important to them. If you are with the assertion that, people in this part of the world are not interested in insurance, then ask yourself why welfare packages work well in churches, among employees, neighborhood, fun clubs and other organisations.

Customer service delivery has been a major challenge which has drove a lot of people away from taking insurance. People have lost confidence in insurers because they believe without the help of a lawyer, a manager or an influential person, you can never make a hassle-free claim from an insurer who has taken a premium from you.

Customer loyalty and satisfaction secured through high-quality products and services providing value for money for the consumer are essential for long-term survival, let alone long-term success (Daniel, 1992, Cina, 1990; Gale, 1994; Reichheld).

Most clients share the view that insurance companies are flexible when they are taking money from its client but on the other hand, they do not bend the rules. They go strictly by their terms and conditions. Some companies even fail to issue policy documents to a client but still refer to their terms and conditions when making a claim.

How can insurers win this confidence back? They have to simplify their processes, especially with claims. Most of the banks have been able to achieve some of these even with mobile money. You can deposit your money and withdraw money just with your phone without having to join long queues anymore. This is flexibility and it brings comfortability to the customer. Most Insurance companies still stick to the cumbersome processes of making a claim.

Insurance companies could simplify their processes with some of these measures and win the confidence of customers back:

1. Insurers should include in their functions to educate the public on general insurance since most of the insuring public have little understanding of insurance terms and conditions. This could be done in partnership with the regulator, National Insurance Commission. Things get easier when people understand what and how you do it.
2. The claims function could be simplified by introducing various claims forms base on the specific loss. For instance, there could be a motor accident form for just theft loss only, fire loss, or third party loss. This will take away the burden of the claimant having to complete so much information when they have these specific losses. Most claimants have to pay people to complete their forms because of their complex nature.
3. Insurers should have a risk improvement service unit to survey the insured’s risk annually or every six months to help make the risk better. Even though insurers would pay for their claim when there is a loss, they cannot pay for the distress that the clients would feel when there is a loss. Customers would also begin to know how insurers care about their business.
4. A smaller claim amount could be paid with mobile money to the customer’s phone. This could reduce the movement of the claimant.
5. Insurers should have a proper feedback system to get information on customers’ experience with their service delivery. A simple WhatsApp number could be created just to solicit feedback from clients to improve and better their products, processes or services. Customers could also use the same medium to ask for information and even notify insurers of the claim.
6. Insurers could introduce a technology that could simplify the process of getting insurance done or making a claim. This could be in terms of documents required before the claim is admissible. For instance, you can overlook police reports or just work with police draft when there is own damage claim only. It is really difficult to ascertain police reports in this part of the world. Third parties suffer because the criminal aspect of a case could be pending at the court and the final police report is not ready. Clients feel insurers hide behind these documentations to not pay their claims or delay payment of claims.
7. Insurers need to expand their branch network to reach out to most of their policyholders. It could mean, the opening of small decent networked offices.
8. Insurers should understand the importance of technology to free the customer from moving around to offices to have certain information on their policies. They could have a mobile application or an internet site where a client could log in and have access to certain information on his/her policy without necessarily going to the office. Insurers could extend this to where insured can pay with mobile money or credit card and have their insurance renewed and print their motor certificate or homeowners’ policy endorsements online. This will ease the burden of the customer going to the office and also looking at the traffic situation in the cities especially, Accra.

For Insurance companies to grow, the institutions must meet the challenges to be truly customer-centric and this presents challenges in the management of transactions and information. This requires significant investment in spreading out, making their presence felt and getting closer to the customers on regular basis.