How can insurers maintain trust with customers?
Sankofa Insurance Brokers believes the answer lies in transparency and proactive communication
Competition in the insurance sector is becoming fierce due to the mushrooming of insurance companies and the development of information technology that enhances customer awareness.
This means that there is an even larger selection of insurance providers that customers can choose from.
At the centre of the relationship between a customer and their insurance provider is the issue of trust.
One of the challenges for the insurance industry is that there has been a notable increase of problems with public trust across all areas of society.
A recent edition of the 2021 Edelman Trust Barometer saw the largest wave-on-wave drop in stated trust on record and describes a “total collapse” of trust in the institutions that shape society, driven by chronic and persistent underinvestment in the “levers of trust across the board”.
It is indisputable that trust is fundamental to insurance because when people buy insurance, they are buying a promise of help when things go wrong.
Claims repudiation are reported to be the source of the majority of customer complaints in the insurance industry
If things go wrong and a customer’s claim is repudiated, they tend to feel as if their trust has been broken. In fact, claims repudiation are reported to be the source of the majority of customer complaints in the insurance industry.
Unfortunately, even when insurance companies and brokers demonstrate that the number of repudiated claims vs those that are paid is minuscule, customers still bemoan poor service.
The perception of poor service is exacerbated when customers take to social media to express and share their dissatisfaction; such posts often receive significant outrage from fellow social media members.
How then do insurance companies ensure they retain or re-establish trust between themselves and customers? Sankofa Insurance Brokers believes the answer lies in transparency and proactive communication.
Sankofa understands that trust is not just about making promises — it is about delivering on them.
Trust is also not about telling the customer that “‘they need to read the fine print”.
Insurance products are notoriously complicated, which is evident in the lower rate of digital purchases for especially complex products such as health insurance compared with simpler products such as travel insurance.
This is why Sankofa says it’s not just enough to “recruit” as many customers as possible and yet not apply the same enthusiasm when it comes to explaining and thoroughly educating clients about which products are available and best suited to their needs.
The lack of such pre-signup education and information is what leads to misunderstandings and a feeling of betrayal on the side of the consumer, which creates this widespread mistrust in the industry.
Consumers need to feel that insurers have their best interests at heart and are offering them useful, tailored covers that are reasonably priced and don’t have hidden exclusions.
Customer centricity is centred on the notion that “the customer is always right”, which can sometimes backfire when customers claim bad service as a result of non-delivery.
To avoid such instances — and especially having an insurance brand portrayed negatively in public engagement platforms such as social media when a claim is repudiated — constant engagement and timely interactions are important.
Proactive communication offers insurers an opportunity to deepen their trust and loyalty with their customers
There is a difference between proactive and reactive communication. Sankofa maintains that the former offers insurers an opportunity to deepen their trust and loyalty with their customers.
For instance, customers who suffer from asthma are likely to have been particularly concerned when the Covid-19 pandemic began. It would make sense for health insurers to reach out and share helpful information with such customers instead of waiting for them to contact their providers on what are usually overloaded phone lines.
The insurer could inform customers about mental health help or local grocery delivery services, explain the risks of asthma in relation to Covid-19, and outline what their policies cover in this regard.
If customers know from the onset what they are covered for and how the claims processes will and should unfold, this not only fosters loyalty but puts a big tick next to the insurer’s name as someone who keeps promises.
This article was paid for by Sankofa Insurance Brokers.