Yesterday, the Financial Conduct Authority (FCA) revealed that the number of complaints recorded against regulated firms increased significantly in the second half of 2019, compared with the first six months of the year, with complaints directed at general insurance products accounting for 5% of the total. A recent Freedom of Information (FOI) request from software services provider Quadient disclosed that the Information Commissioner’s Office (ICO) received 129,354 complaints from consumers about nuisance calls and texts in 2019, with insurance services (including car, life and home) drawing 3,792 complaints during this period.
Taking the wrong approach when contacting customers can turn a historic relationship into a tragedy, according to Andrew Stevens (pictured), principal of banking and financial services, at Quadient. Quadient explores the customer service through the lens of how businesses communicate with their customers, he said, and as such has a unique insight into the disconnect between businesses and understanding what their customers genuinely want.
What businesses should realise is that these are complaints registered via a single channel - many people complained via a different service or were infuriated by a service provider without complaining. Almost 3,800 of these complaints were registered against the insurance sector, which, Stevens outlined, is quite high for a service-led industry.
“From an insurance perspective,” he said, “[the service offered] is not simply a short-term transaction and nobody in insurance wants to be in a race to the bottom, where you’re just competing based off low premiums. You want to be creating a long term relationship with the customer.”
When businesses do something to warrant such a complaint, Stevens said, they are damaging that relationship and he noted the old adage that for every bad thing done, 10 good things are needed to balance that out. In insurance, businesses are usually required to make the right move the first time and when insurance companies misstep with their communication there are always other insurers who will be happy to avail of that business and to build that relationship.
It is essential for businesses to understand that what may appear to be a simple misreading of a customer’s preferences, which leads to an insurer sending out terms and conditions by post instead of via email, is a fundamental breach of the relationship. When a customer gives a business their information, Stevens said, they expect the business to use it correctly. He detailed how the communications preferences options to customers have increased in recent years and become reasonably complex.
“When you go to the trouble of filling those out, there is an expectation that there is someone on the other end who is actually doing something with that information,” he said. “And when they don’t, it can get very frustrating.”
The single most important opportunity to foster an excellent and long-standing relationship with a customer is the moment of onboarding, he said, and if an insurer does not respond correctly at this crucial juncture they will have a difficult time convincing the customer that they will listen to them in a moment of crisis.
“These statistics go beyond the insurance sector,” Stevens said, “but the message for the insurance sector is that if you are not communicating with your customer properly then you are going to pay a price. People are not just quietly carrying on as they were, there are people who are willing to make formal complaints. And for everyone who makes a formal complaint, there are maybe 10 more who didn’t. And there are maybe 15 more that complained in a different way – that could be Twitter, it could be Facebook, it could be other social media channels or it could simply be blocking the number that called them. And if that number is blocked, then what are your marketing opportunities for points that would actually be of benefit to the customer? What sort of a relationship can you have with a customer who is blocking your number?”
The coronavirus has highlighted the need for greater customer service within the insurance sector and there is a lot that everybody can learn during the pandemic, Stevens noted, highlighting the capacity of such a crisis to help build long-standing relationships which feature insurers supporting their end customers. This is about doing the right thing by the spirit rather than the letter of a contract, he said, and supporting the people who trusted you enough to sign a contract with you.
“The best bit of advice that I would ever try and give an insurer is to turn off the return on investment channel just for a short period of time,” Stevens said. “Stop thinking of the result being a return on investment and start thinking of the result being an improved customer experience. When you do that, the world just opens up.
“You can start doing things like mapping customer journeys and start to forget about process journeys… Think about the customer journey, think about the customer experience as they go through that journey. And then try and rebuild your processes around that. As a result of that, your customer experience will go up, and you will get a return on investment but it will come as a reward rather than the goal.”
