Will 2014 be the Year of the Customer with Commercial Lines Insurers?

There is no doubt that 2013 was a more comfortable market for commercial lines insurance than in previous years. While some areas are still fiercely competitive others have seen premiums rising as the world economy recovers from the devastations of 2008 and insurers rebuild their capital base.

Overall, prices are rising and capacity is levelling out. The small and medium enterprise market, where margins are low, is still seeing the most intense struggles, particularly over new business.

However, there is one big issue that is not quite so easy to bounce back from: the service provision to policyholders and brokers. During the soft market period, major insurers cut costs dramatically, reducing service levels to retain profitability. But this is not something that can simply be turned on and off at will. Therefore, it will take time, money and effort to get insurers back to supporting their markets in the way they used to.

In 2014 the rallying cry to the troops from almost every CEO in insurance is “Customer Satisfaction is King”. Huge activity and focus is being concentrated on how to raise NPS scores, increase retention and drive up brand value.

Nevertheless, re-hiring armies of new staff is no longer either the long-term or short term answer. Now is the time to work out how to drive efficiency and effectiveness of service processes in a better way. Automation and a clinical attention to planning the detail of customer interactions to drive optimum outcomes have to be an investment opportunity. Every visionary insurer should aspire to this.

The smart money is on giving your existing staff the tools to do the job better, faster and cheaper. The good news is that they know how they can do it that way and have been complaining for years that if you would only give them the opportunity, they could show you. If you are a senior manager, try it out – go onto the “shop floor” and ask a few of your longer-serving employees where the problems are.

Today, the ability to put processes in the hands of the business community (safely from an IT perspective) has arrived. Showing contact centres, branch offices, distribution management and underwriting how they can cut out 30% of their manual, repetitive, boring daily activities through automation is a reality. Creating the environment to focus their attention on what the client is saying and wants to achieve, rather than screen juggling and scribbling data codes on paper to re-key and copy/paste across multiple systems, will liberate them and their customers. It will also reduce man hours and elapsed time, improve outcomes and increase the customer satisfaction of brokers and policyholders.

For insurers to give excellent service to anyone other than their major brokers is challenging right now. However, the price of not doing so is steep: lost revenues, long-term damage to relationships and clients who just walk away are all real threats. Who can afford that?