July 14, 2016
Distribution Debunked (PART 2)
by Donn Vucovich and Julie Zimmer
We claim to be trusted advisers, but our clients don't know what we do or why they're paying us.
In a previous article, we discussed how there has been a rapidly accelerated emphasis on insurance technology, data and distribution. But are we as an industry spinning our wheels? The answer is a big “yes.” Why? Because we haven’t asked the right questions and aren’t trying to solve the right problem.
Here’s how distribution breaks down:
A Painful Process
Our customers have many issues around running and growing their businesses. Insurance empowers customer to do just that — hire employees, comply with regulations, etc. — but the way we go about it is asking endless questions (multiple times over). We focus on what we think doesn’t work instead of what DOES work about their businesses. We are the Negative Nellies. We turn little things into big things, over-analyze them and then use them as reasons to charge higher rates. An evolved distribution would:
- On the back end:
- Draw on information in data bases and simply ask the customer to validate that nothing has changed.
- Handle everything electronically ONCE. (And, no, email doesn’t qualify!)
- Use publicly available information to fill in the blanks.
- Leverage class and big data to price and only use underwriting to manage exceptions.
- On the customer-facing side:
- Stop sending apps we have to print out, fill in and fax back or, even worse, writable PDFs that don’t save (we have to fill it out over and over until we get it completed on one run through) and then come back and tell us we need to fill out yet another app for another market. It’s like Groundhog’s Day, and we don’t have time for it.
- If we DO have to fill something out, let us know what information we will need ahead of time so we can have it ready. Right now, we have to stop and start as we have to go look for stuff — and, frankly, we just don’t have time for it.
- Let us know what the cost is ahead of time. We know you don’t want us to shop our policies — we don’t want to either — so do us a favor and don’t make us. We don’t like being painted into a corner, and we’ll continue to look for a partner who respects that.
See also: 3 Skills Needed for Customer Insight
Pain About the Purchase
Have you ever bought a house and thought about the real estate agent collecting a fat check? Have you gotten a knot in your stomach because you know you paid to fund that? What about the finance guy at a car dealership? You sign on the dotted line because you need to, but you know he’s pulling down a check for that signature, and it bothers you.
Insurance buyers feel the same way. Even though we will tell you we are their “trusted advisers,” the reality is that customers more often than not (and no matter how much they like their agent) can’t answer the question, “What do I pay my agent for?” That’s a problem. Distribution should look at ways to be more transparent, to help customers clearly understand what they are paying for and what they can expect to receive and when. More importantly, customers should feel like we appreciate their purchase. Often, they ask us to bind, and the next thing they see is a bill (even before a binder). How about a “Welcome to our company,” “Thank you for your trust” or, even more importantly, “Tell us about your experience.”
Allow customers to benchmark costs and give them a level of comfort that what they are paying is in line with others — and, if not, why. It’s a simple question that deserves a simple answer. For us to have the vast data stores that we have and not be able to answer a simple benchmarking question is nothing short of unforgivable.
Just a Promise to Pay?
Customers want more than just a promise to pay, and distribution could provide meaningful value to the customer beyond the policy placement.
Does the customer have conditions that are raising their price or limiting their ability to get coverage? Educate them, provide tools, help them become a better business and, by extension, a better risk. In that way, we drive value to them instead of wasting valuable time.
Look for ways your products could help them sell more and gain a competitive advantage. Take risk out of growth and provide overall out-of-the-box solutions. Provide them with tangibles, even if it is as simple as a portal where they can manage what they have, manage their exposures and communicate with their account team.
See also: How to Redesign Customer Experience
It’s clear that customer experience is the key to success. By giving your customers some control over the process, you can remove the typical painful buying experience and make your customers feel good about their purchase.