Customer connectivity – Is the insurance sector doing enough?

Has-insurance-lost-customer-connection?

A couple of years ago an Ernst & Young survey in the UK revealed that just 7% of consumers have "complete trust" in their insurer. It was reported that UK insurance customers were found to hold more trust in the banking sector, despite the severe reputational damage it has suffered over the last seven years, than in their insurance provider.

Findings from other surveys show that insurers are less trusted than estate agents, mortgage advisers and even lawyers!  As someone that has worked in insurance for over quarter of a Century I rub my eyes in disbelief when I read these comments because I know that the reality is not in line with perceptions.

Nobody’s perfect, the UK insurance industry included, but we pay around £12bn in taxes a year to the Government and the industry employs around 334,000 diligent and hard-working individuals. 

I don’t propose to list all the facts about how UK insurers pay out billions in claims every year and the rest of it but for some reason there is a huge disconnect between reality and perception and I think I know why.

Some insurance buyers think we’re irrelevant.

Policyholders don’t think that we’re irrelevant when we pay out on a claim at which point we’re best buddies for a few weeks but the rest of the time we don’t exist except when we meet up for a brief annual chat to renew our acquaintance at renewal time. Insurance companies are not their customers’ friends.  All too often we’re acquaintances at best.

That might explain why the banks are ahead of their insurance risk brethren in the polls so consistently.  It’s because their customers are always checking their bank account, making payments, withdrawing money, getting advice on interest rates and everything else that comes with being provided with a service.

For all their faults, banks are visibly in touch with their customers in their nice warm branches, they warn you when they think that your card has been cloned or when you’re abroad they ask you to contact them because someone has made an overseas transaction. The bank customer at the time might think what a pain, why can’t they just let me get on with my life but then they think – ah well, at least they care!

It’s a bit like the weekly call you have with your mum. “Yes mum, I have put on a couple of pounds and I promise to go the doc about my cholesterol next week” you mutter. That’s why customers tend not to switch to a new bank, it’s because most people don’t divorce their mum. So banks are like family, a necessary part of life.

The banks know this, of course, but that doesn’t mean they rest on their laurels and expect customers to remain loyal for life.  The Barclays Digital Eagles campaign is a brilliant example of proactive customer engagement and service.  Barclays knows that service is about more than a transaction. The Barclays strapline is Barclays Digital Eagles – Changing Lives.

This is about far more than good old fashioned PR.  Barclays is talking about changing their customers lives: how ambitious is that?

Barclays has turned 20,000 of its staff worldwide into digital advocates and over 12,000 in the UK.  The Barclays Digital Eagles are employees with a passion for online and social media who volunteer their time to explain technology to their colleagues and the public.

Now do you start to see how far the insurance sector is lagging behind?

The insurance market does some good work on Corporate Social Responsibility. Our employees grow grotesque moustaches during the dreaded month of Movember.

We abstain from alcohol for a month in October and thank the Lord that we can drink enough during November to forgot that we have started to grow awful moustache to raise money for our charity of the year!  It’s good worthy stuff but it’s not going to change the majority of customers’ lives in any meaningful sense.

Where is the insurance equivalent of the Digital Eagles or the Code Playgrounds that offer a similar service to the current account holders of the future?  There may be some insurance project underway to deliver a campaign like this but I haven’t seen it.  Surely there is an opportunity to create new “Risk Surgeries” or “Protect my Family” insurance clinics that allow our 300 year-old industry to reconnect with its customers.

Then there’s Brexit.  Setting aside opinions on leave or remain, the vote highlighted dis-satisfaction with the status quo.  This is also a time of austerity for many customers that are struggling to pay their bills, let alone their insurance premiums.  Half of the poorest households do not have home contents insurance, compared with one in five for households on average incomes and one in ten for households in the richest fifth. 

Both the proportions and the gap between them are similar to a decade ago.  This lack of progress contrasts unfavourably with the progress that had been made with bank accounts.  Households with no home contents insurance are more than three times as likely to be burgled as those with insurance.  While the underlying crime statistics show that the likelihood of burglary has fallen for both households with and without home contents insurance, this unfavourable ratio has remained broadly constant.

These are the things that matter to UK insurers customers.  Life matters.  Protecting families, sons and daughters and mothers but the language of insurance and the actions we take to make customers feel part of the family fall short.  If micro-insurance products in Africa can change customers’ lives, then surely, we can come up with creative solutions to narrow the insurance protection gap in the UK?

As I said at the start of this blog, the reason that poll after poll shows that we compare unfavourably with other professions is that we are considered irrelevant.  I’m not sure it has anything to do with customers thinking unfavourably about our so-called “brand,” the more worrying question is: “Do our customers know we are there?”

 

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