When talking about the increasing pressure for financial services firms to offer better customer service and enhance customer experience, we immediately think about changing consumer expectations and behavior.
In today’s commoditized insurance environment, customer experience is rapidly becoming an important aspect of a company’s growth strategy
Those changing expectations are not just caused by experiences in several other industries. They are also brought upon us by disrupters such as FinTechs and the tech behemoths. In the end these firms have an edge in really puting customer preferences, service and experiences at the center faster and in a more digital and agile way than incumbents.
Another reason for the industry to up customer service levels has to do with regulations and compliance. In many countries banks and insurers face more stringent regulations regarding the way they serve their customers, among others by improving transparency and meeting stricter demands regarding complaint handling.
What You Will Learn
The insurance industry still faces customer service perception challenges
In the insurance industry the impact of these evolutions is often felt more than in other industries.
For starters, the need for customer service excellence and a focus on the end-to-end customer experience is already critical for the insurance industry.
Insurance is virtually always in the top of industries with the worst customer service perceptions in the eyes of consumers. Obviously, it all depends on the region and there is improvement if we look at recent reports but still. As an example check out the graphic below of industries with the worst customer service according to research by Ipsos, turned into an infographic by Statista and Forbes in 2015.
Customer service excellence, claims management and complaint handling
Secondly, customer service plays a key role in the core business activities of insurance firms. It’s essential in the processing, management and follow-up of insurance claims processes, certainly in these times where consumers use multiple devices, data types, channels and formats to submit claims and all the data they come with, resulting in an avalanche of unstructured data and information. Moreover, consumers want to be able to follow up the claims process themselves, using digital tools as Accenture reminds us.
Last but not least: regulations force insurers to effectively provide better service in another context; that of dealing with complaints.
An example of this was mentioned on MyCustomer.com concerning the impact of recently updated regulations in the UK. The article looks at the consequences for the insurance industry from a service perspective of new confirmed rules regarding complaints which affect all financial services firms.
Some of the new requirements as the Financial Conduct Authority (FCA) confirmed them in July 2015:
- Companies across all financial services sectors need to resolve complaints within three days.
- New rules have been confirmed limiting the cost of calls consumers make. This is the case for complaints calls and post-contractual calls.
- The FCA requires firms in the financial services industry to report twice a year on the number of complaints they get.
Customer experience and customer service: key in your growth strategy
To deal with existing and new customer service excellence requirements and tackle the customer service level perception challenge reported earlier, insurance companies and financial services firms more than ever need to have an omni-channel and highly effective (both regarding costs and customers) service operation.
With general insurance products, the quality of service and past experience – especially in the area of claim settlement – are the most critical factors in influencing customer behavior (MyCustomer.com)
Regulatory demands such as the ones in the UK mentioned in this article, raise the bar even more and keeping track and reporting of complaints handling is essential.
As consumer organizations and government bodies, to name a few, join the increasing expectations of consumers themselves regarding customer service by insurers and financial services it’s hard to underestimate the importance of customer service for the industry.
Not that it matters less without these regulatory demands. As Accenture states “in today’s commoditized insurance environment, customer experience is rapidly becoming an important aspect of a company’s growth strategy”.
Although customer service is not the same as customer experiences they are closely connected and isn’t customer service also the new marketing (and sales, retention, acquisition, word of mouth driver and essence of business growth) since quite some time now?
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