As you know, here at Riskheads we’re huge fans of the power of software to improve insurance businesses. The ability to automate processes and generate greater granularity in analytics leads to better products and services. However, we also think that there’s a balance to be found between software and humanity.
The Customer Relationship is at Risk
Insurers are often the first to complain that their customers lack loyalty. Customer churn is a very real problem with clients changing insurers at the drop of the hat (or at least for the minor drop of a premium). Is it possible that part of the reason for this is the preference for low cost customer interactions?
When I was younger, my parents’ insurer was well known to the family. He would visit once a year; examine their changing circumstances and then come up with a plan to address their current needs. He was a likeable and earnest young man that they trusted to do right by them. They would never have dreamed of talking to another insurer.
Fast forward to today and there’s so little human interaction in so many of our life transactions. People buy their insurance online from quote collation engines that neatly spit out a figure, never mind if the policy is actually what the client really needs – as long as it’s cheap, it’ll sell.
When a client phones to make a claim, their first point of contact is rarely with a person – it’s with an automated call routing device and they get to sit and push buttons and hope that if they’re lucky someone will deign to speak to them. In many cases, much of the data entry process has been automated too – instead of reading an account number, they push buttons to enter into a computer too.
It is this lack of relationships which may be at the heart of the distrust that people feel for insurers. If you never interact with another human being at your insurance provider – then it feels like you’re interacting with a machine not a service provider. Is it any wonder that people find it hard to put trust in that machine?
Balance is Needed
The wave of outsourcing of call centers to India didn’t pay the dividends that people expected it to. Sure it was cheaper but when people found themselves speaking to people who didn’t understand their situations, couldn’t place where they lived, etc. they went looking for alternative providers wherever possible.
Software automation is going to drive a similar revolution unless it is balanced with a human touch. People want to talk to insurers, they need educating about the right products to buy, they want reassurance when things go wrong. This is not an unreasonable expectation.
When your clients become numbers rather than names… something is wrong. Over in other retail sectors this lack of a human touch is driving a revolution. Brands are beginning to understand the premium people will pay for real service. One retailer is even offering their staff a month’s salary to leave if they don’t want to deal with their customers in the right way.
Software automation should be invisible. It delivers genuine business benefits and genuine customer benefits but it is no substitute for human interactions. The insurance sector is going to have to try and rediscover client management in the right way in order to improve margins and drive customer loyalty.