Insurance companies have been encouraged to do more to resolve issues at the source, after it was revealed that
customer service ratings for the sector have slipped.
Insurance is the only sector in the UK which did not see an improvement in its score compared to this time last year, according to the latest report by The Institute of Customer Service. An annual survey of UK customers found that while insurance is doing better than the national average, 9.3% of insurance customers experienced a problem this time round – the highest rate of problems in five years, and up 1.5% from last year.
In a competitive business environment, where insurance companies are fighting for customers, that spells bad news, according to The Institute’s CEO, Jo Causon.
“All of our research indicates that this is important because there’s a direct correlation between an organisation’s performance, and its levels of customer experience and satisfaction,” said Causon. “That’s across all industry sectors, but when you’re in a highly competitive environment it becomes increasingly important. Not differentiating yourself on price, but differentiating yourself on service, has got to be the future, quite frankly.”
As insurers battle for customers, who are increasingly encouraged to shop around for the cheapest option via price comparison sites, providing excellent customer service could be key to holding onto clients.
“How do you ensure that you maintain a loyal base of customers? I don’t believe you do that purely on price, in fact a lot of the research that we have produced demonstrates that there are a significant number of people who are prepared to pay more for a better level of service,” Causon commented.
In today’s market, customers are also demanding more, according to Causon.
“If you think about the environment that we’re currently working in, for example the challenges that Brexit could bring, with customers looking at things like exchanges rates and inflation, we are demanding more as consumers – we want more for our money,” she explained.
“Therefore, there is a greater need for organisations and for insurance companies to differentiate themselves on this experience.”
Despite a slight rise in the occurrence of customer problems, there was a significant improvement in the time taken to resolve complaints in this year’s survey. Nevertheless, Causon warned that it’s increasingly important for insurance companies to avoid causing customers problems in the first place.
“The old adage about turning someone who has had a problem into a raving fan is not necessarily the case anymore – we get irritated now as consumers,” she said. What is “critical” is to look at the way that issues are handled, and to try, where possible, to stop them at the source.
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