December 7, 2018
Insurance Service Rates Zero Stars
by Hasan Meral
Insurers' favorite customers are those who haven’t had any claims for years -- hardly a recipe for building a service culture.
When we say marketing 3.0, industry 4.0 and technology 5.0, we all get used to cool names ending with zero. I think no one is surprised that insurers fell a little bit behind.
We all talk about these cool zeros, but there is something really zero in insurance: customer service. I’m not talking about a claim service or a specific customer relations problem. I mean the view of insurers’ whole customer service.
Most insurance companies think that they should only serve for the customer who has a claim. Their favorite customers are the policy owners who haven’t had any claims for years. But the insurance industry’s approach doesn’t match with the fundamental dynamics of the service sector. As a service company, if you are getting a fee from customers, you should be happy while serving them and should want to make your customers happy, too.
See also: Next Generation of Insurance Services
Insurance companies need to remember that they are in the service business. Serving only the unfortunate winners (claim owners) does not make you a services provider, but makes you a lottery company, at best. Lottery companies do not have problems because the majority of ticket owners know that the chance of winning a lottery is very low and don’t expect any special service from the lottery company. But people buy insurance against bad events that they think are likely to happen, and, if these events do not happen, they feel they do not get their money’s worth. Therefore, it is necessary for all insurance companies to provide service to all of their customers during the policy period, even if they have not made any claims.
Think about the gym that you paid hundreds of dollars for a year and you have not visited for nine months. Probably, you are angry with the gym. After a year without any claims, an average policy owner has similar thoughts about the insurer. How can you handle this problem?
Let’s go back to the gym you have not visited for months. What if it provides you another kind of service that you can use remotely, like healthy nutrition consultancy or a one-year free Netflix subscription? The Netflix subscription could completely eliminate the possibility of your gym use, of course. 🙂 But, joking aside, what would you think about the gym? Surely, you would find it more sympathetic and might think your money is not wasted.
Six years ago, when I was working at Cigna Turkey, we had created a concept called “living insurance” to make life insurance more desirable. We bundled lifestyle services with insurance products by means of different concepts like family, education and healthy life. Normally, no one wants to think about the possible return on their life insurance policy; it’s an unpleasant topic. However, with the service we provided to our customers — from carpet cleaning to skin care, car check-up to pedagogical consultancy — our product became something more than just the consolation of bad luck. In this way, products became more attractive, and customers did not think that their money was wasted. They could benefit from services any time during the policy, even if they had no claims.
Of course, it was easier said than done. Some conservative executives strictly stood against the strategy. Some raised questions like, “What is the relation between these services and our policies?” Now, when I look back, I can easily say we have been successful. These products sold hundreds of thousands in a few years, and some of them are still the best sellers. In addition to creating a new product category in the market, we opened a way for these lifestyle services, which are now an industry standard; today, almost all life insurance companies in the market provide these kinds of additional benefits.
See also: How to Use AI in Customer Service
Insurance companies are obligated to serve their customers throughout the whole duration of the policy, whether it is home, car or life insurance. By giving names to our customers as “insured” or “insurant,” we forget that they are actually customers with needs and expectations. To catch up with industry 4.0 or technology 5.0, insurance companies should focus on holistic customer service development before the big infrastructure transformation development projects. In this way, an insurance service 1.0 that represents a customer service concept that meets customers’ expectations may be possible.