The Policyholder Has Changed, Why Hasn’t Customer Service?

Hello, my name is Eric and I pay a high premium for my auto insurance.  You may be thinking I am nuts, but I am totally satisfied with both my premium and my insurance carrier.  Why? Because they get it...or, should I say, they get me; and for that reason I am willing to pay a little bit more for my happiness and assurance they provide. However this is not the case for most instances.  My home heating oil provider is counting their blessings that I have decided to keep this a happy blog.  On a serious note, a lot of companies find nurturing customers a challenge and sadly most don’t even realize it’s an issue.  In a recent webinar titled Big Ideas on How Insurers Can Become More Customer Centric, Martha Rogers from the Peppers and Rogers Group quoted a statistic from Bain and Company that 80% of corporate executives say their company delivers a superior customer experience, but just 8% of consumers report they actually received one.  This is amazing!  Why such a disconnect? 

I believe the root of the problem is predicated on the fact that the customer has changed (Socially Connected Consumer); however, most service models have not kept in step with the times.  As Denise Garth notes in a recent contributed article to Insurance & Technology, customers are growing more impatient. And it’s up to insurers to keep pace, or else they risk losing them.

Due to my occupation I have the luxury of meeting with the world’s largest insurance carriers to help transform them from being policy centric to policyholder centric.  From these travels I see that there have been four evolutionary turns in customer service. 

  • The first generation is what is referred to as resource intensive.  In this phase almost all customer service is human intensive resulting in costly, inconsistent processes across the service enterprise.
  • The second generation is data centric.  In this phase customer service is very transactional and silo centric.  Similar to the first generation it is very error prone because it relies on the CSR to assimilate data at the point of interaction and turn it into action to service requests.
  • The third generation is what is referred to as workflow centric.  This is where customer service organization begins to apply workflow technology to breakdown operational silos.  However, the issue with workflow centric CRM is that it just can’t accommodate different policies or procedures for different customer segments, products, channels or geographies — resulting in rigid, one-size-fits-all service that leaves customers vulnerable to the competition.
  • The fourth and the most advanced evolution is the customer-centric servicing enterprise.  This phase focuses on automating the decision making to empower service agent to do the right thing for the right customer at the right time regardless of segment, channel, or other business circumstances.  To achieve this level it requires a combination of predictive analytics, dynamic case management and rule technology.   

Oddly, based on my travels, most insurance carriers are data-centric enterprises; two generations behind the curve!  On a positive note there are a handful of carriers that are aggressively adopting cutting-edge technology to understand, anticipate, and predict their policyholder’s needs…such as mine.  It is these types of carriers that will be allowed to command a higher premium and be praised for it.  In fact, Denise Garth notes in her article that 76 percent of insurance customers are willing to pay more for higher levels of trust, greater access, exchange of information, and more personalized products to meet their specific needs. I happen to be a member of the 76 percent.

It would be interesting to get your opinion.  Do you agree that, on average, insurance companies are two generations behind?  If so, what do you think carriers need to do differently to service today’s socially connected consumer?