We have just returned from a workshop sponsored by the Council of Insurance Agents and Brokers conducted by the Quality Insurance Congress (QIC) to explain the “Voice of the Customer”, an in-depth research project to reveal the attitudes of customers toward the insurance industry (agents, companies, and TPA’s). We highly recommend the report to you (call the QIC at 1-800-445-3433).
The project surveyed 1,653 commercial customers (split rather equally between small (under $100,000), medium ($100,000 to $1 Million), and large). The project also surveyed industry executives and middle managers from carriers, agents and brokers, TPAs, associations and industry educators. The goals of the survey was to identify the gaps between the customer expectations and the current insurance systems’ performance. The results are sobering and not unexpected, yet hopeful.
The customers want:
* the industry to improve accuracy, timeliness and communication,
* the industry to work in TOGETHER to achieve standards of quality
* innovative products and services
* tailored services
* lobbying to affect insurance cost containment
* SEAMLESS product and service delivery
Customers view the insurance industry as a poor performer.
Customers view the insurance as a whole while the industry views insurance as separate parts.
Customers want innovation while the industry sees itself as mature.
Customers view duplication and redundancy as costly and failures in the insurance system while the industry has redundancy and duplication built in.
What all of this points to is that the customer and the industry do not share the same priorities and urgency. And our friends in the banking business, the direct writers, and the self-insurance and program administrators are telling us in a loud clear voice that if we don’t solve our own problems in the industry, they will!!
Less than 31% of the customers felt that they received excellent or very good value for their money from the insurance industry (less than 25% of the small and medium customers) and less than 56% felt that they received excellent or very good quality from the industry. The very good and higher rating for the rest of the financial services industry was 48% and their perceived quality rating was 70%.
We urge you to call for either the Executive Overview of the study from QIC, or join to get the entire report — But what does it all mean?
1. Paraphrasing Ben Franklin, “We must learn to work together, or we will certainly hang alone.” We have well over 100 Associations in the insurance industry compared to most industries’ one. We seem to have an association for every purpose, but none cooperate well with to each other because of the potential perception of becoming subservient to one another. They will eventually speak to each other – about merging – when too few agencies are left to support them all. We do not argue the valuable work that each association performs, but talk about REDUNDANCY…?? Are the associations supporting the agents, or are the agents supporting the associations’ staffs? If the associations worked better together, THEY, not the QIC members, would have sponsored the “Voice of the Customer” project.
2. The carriers have some reason to shy away from common ground. Regulation and oversight makes working together smell like collusion. But clear billing that explains information about the reason for the bill, standardization and elimination of redundancy in policy delivery can and should be the carriers’ top priority – that’s what the customers want! However, the carriers, responding to stockholders pressure, delay the strategies that will retain the industry in the long run for the efforts that will boost ROE next quarter or next year. That’s like rowing a sinking boat FASTER to try to keep on schedule. Easy to understand policies, another common thread of the customers desires, are overshadowed by the legal profession and litigious society that condemns us to “simplified” policies that still read like textbooks in order to avoid any vagueness that may be misconstrued by a court. Only strong, unified, on-going lobbying for reforms combined with an industry-wide image campaign to correct the customers’ misconceptions of us will effect changes in this realm.
3. We, in the agency business, must change to meet what the customers feel are their needs instead of our own perceptions of those needs. Unless we ASK the customers (or analyze the findings of a project like “Voice Of The Customer” and ask our own customers) we don’t really know if our priorities are theirs as well.
4. For instance, the survey respondents felt that the broker/agent had a substantial impact on overall quality. When asked what components were important in customer/agent relationship that affected quality, the three primary impacts were responsiveness, problem solving and performing transactions. Other characteristics like representing a broad range of carriers , insurance knowledge and personal contacts were not high impact issues to the customer. In all likelihood, they assume these characteristics. So if you want to achieve the minimum level of quality desired by the customers you’d better be-
– Quickly responding to their inquiries,
– Effectively identifying and solving their problems and
– Quickly and effectively performing transactions.
5. The changes required by insurance customers demand dramatic, systemic changes in the way agents and companies deal with insurance courage, issues and transactions. If we can’t provide a full range of seamless product and service delivery like banks have for many consumer products, the customers will find solutions elsewhere. Whether the independent agency system and the carriers it represents responds, or not, is unimportant to the customer. You see, non-traditional risk-shifting methods are being developed as an alternative to our own system if keep our heads buried in the sand.