Change the pig, not the lipstick…

I was chatting with my father the other day. He and my mum call every week to check in and say hullo to the grandkids. I’ve lived away from my parents on and off for nearly three decades and barely a Sunday has gone by without these lovely but generally unremarkable catch ups. There was, as you may well suspect, something remarkable about this particular conversation. Something that has stayed with me and caused me a good deal of reflection.

My parents had recently suffered water damage to their house from some very heavy localised rain in the region of country Australia where they live. As one does in these situations, my parents contacted their insurer to make a claim. The experience was so poor that dear old Dad felt the need to ventilate his frustrations during this otherwise pleasant and nondescript Sunday chat.

You ought to be ashamed of yourself!!” he fumed. A puzzling remark when made without context; but it usually signals that a rant on either lawyers or insurers (both tribes which I lay claim to membership) was about to commence. Accordingly, it was without too much apprehension that I reluctantly waded into the fray…

Hmmm, ok…“, I pondered “who’s upset you this time?

Bloody insurance companies!!! You’re all hopeless!!! The way you treat customers is atrocious. You ought to be ashamed of yourself!!

Although there was some sarcasm to his hyperbole, I was not particularly up for taking on the chin all of the attendant ills of the industry. Nevertheless, I soldiered on. So did Dad. He relayed what I have to say is some fairly ordinary and less than satisfactory treatment in the making and processing of his claim for property damage.

It’s not the first time I’ve heard a story like this. I’ve attended plenty of dinner parties where the sport for the evening seemed to be “Pick on the Insurance Guy”. It’s hardly an isolated instance. There is no doubt that the industry has a bad reputation for customer service and experience (whether it is 100% deserved or not is another question, but I am certainly not ready to open that can of worms just yet). So my recent conversation with Dad was not all that revelatory. Well, it was – in a larger sense – in that it made me reflect on my place in all of this. Do I want to merely accept it or do I want to be an agent for change, however inconsequential. Do I want to be a bystander or an agitator?

Publishing this, my first substantive article since I left legal practice, is the answer I suppose. I don’t much like by-standing. Never have. I have come to the view that unless those of us in the industry who believe that there is actually a tremendous amount of social utility to insurance (of which I am one) speak up or do something about the problems and weaknesses inherent in our industry, it will not change and will fail to fulfill that promise to a wider audience of people who could be well served by the products we offer, but remain put off.

Or maybe I just want to feel good about myself for doing something. Either way, whether the true motive is altruistic or selfish, I hope that the effect is still the same – helping to transform our industry for the better.

That’s all very nice indeed you may be pondering, but a few crappy dinner parties and some hassling from your old man does not a trend make. Maybe a few of you are part of the dinosaur class within the industry who don’t really see that there is a problem and that the problem has been with us for some time. I counter with some evidence. I like evidence. It cuts through. It illuminates an argument with a spotlight of objectivity. A recent CapGemini report did just that in relation to highlighting that the insurance industry still does not know how to serve its customers or give its customers the experience they desire:

“Insurance on the other hand, is playing catch-up. As digital blurs borders between industries, customers are benchmarking the digital experience of one industry against another. ‘ Customers feel insurance companies should deliver a better experience, on the lines of digital platforms such as Amazon, Uber and Zomato. That’s the challenge we have taken up.‘ says Ravi Vishwanath, Executive Director and CEO of India based Reliance Health Insurance. Insurance firms must focus on experiences which are digitally enhanced, contextually aware and personalised.”

Meanwhile, a report by IBM’s Institute for Business Value “Solving the customer relevance riddle” found that:

“… only 56 percent of consumers surveyed were satisfied with the personal attention from their insurance provider, and only 56 percent trusted their provider. But this should not exactly be news for insurers. In IBV studies as far back as 2007, a majority of insurance consumers surveyed have consistently expressed distrust in the insurance industry in general. For many insurers, this did not seem to be a major concern, perhaps because they were confident that customer inertia would prevent meaningful defection.”

All the while the experience customers receive in more “woke” industries put this into stark relief. We must collectively as an industry realise as the CapGemini report cited above highlights, customers will soon, if they don’t already, come with the expectation that if Uber can do it, or Amazon can do it, why can’t my insurer?? Of particular relevance here is the experience a customer receives when making a claim.

Read this related idea:  Krulak’s Law

For so long we have seen the claim as divorced from the “product”. That is a very counter-productive and frankly counter-intuitive point of view. The claim, it must be understood, isthe product. It (or the ability to make one should circumstances arise) is the very thing the customer is buying. The experience the customer receives at the time of making a claim is formative in terms of the reputation afforded to the entire industry. Not to mention it is one of the few times an insurer has the chance to engage with a customer. It is critical that this interaction is handled appropriately, with care and with expertise. It needs to be the focal point of customer experience design and needs to have a very human focus and perspective. As my father and many dinner party companions will tell you, it just ain’t…and the sad thing is it seems that there is at least anecdotal evidence to suggest it’s getting worse.

The culprit? For mine, the industry’s current clumsy lunge towards digitilisation (and the view of it as a panacea) . Insurers are and have been for a while now, looking over the fence at organisations like Amazon, Uber, Airbnb etc and seeing that they deliver delightful customer experiences. Well, the insurers say, it must be because they are tech players offering an end-to-end digital experience. Clearly that is what we need to do! Let’s get digital. If their customers love digital, ours will surely too.

What was missed in all of that is that it wasn’t necessarily the digital part the customers loved the most – it was the experience they were receiving along the entire journey. They were engaged, looked after and treated in a way that made them feel valued. The digital piece is certainly part of all this; but the overwhelming aspect of what makes it work is that the customer is at the heart of it all. The culture of service begins and ends with the customer and ensuring that the customer is well served. Digital is merely an enabler. If you don’t have the ethos, the culture driving a customer centred and relevant outcome, the digital/tech stuff is just some fancy lipstick on a pretty unattractive pig…

You probably get the picture of where I’m headed here. It ain’t half obvious. Over my time in and out of the industry, the culture and perspective of the industry has changed little. My father’s recent experience remains the norm instead of the exception. Customers (or “claimants” as they are dimly referred to inside the industry…) are largely still treated at claim time in the same way they have always been. Digitilisation in and of itself will not cure this.

As a collective we have to realise that if we want insurance to become engaging and of interest to customers so that they are open to hear the message about the good things insurance can do we need to stop mindlessly digitizing everything merely for the sake of it and start fundamentally shifting the service culture.

I very much doubt whether customers care all that much if they have to fill out a form in paper or on-line – but treat them poorly when they need awesome service the most and I daresay that is something about which they will care deeply. Andy Mura from UserLane recently offered the following commentary in an article on the UserLane blog dealing with meaningful innovation:

“A sure recipe to fail in the digital transformation is creating a change management program that revolves around technology instead of taking into account people and their experiences: digitization is a disruption that affects the human experience.

Innovation makes sense if it focused on people and their expectations. Digital transformation becomes more than a buzzword only if it creates a great human experience for all the parties involved in the change process.

Digital transformation makes sense only if the processes we optimize lead to a better experience for our customers.”

Please insurance companies, by all means digitise, get tech-ed up, but don’t do it for the sake of it. Least of all don’t do it because you think that will turn you into the Amazon of insurance. That is not the lesson to learn from companies like Amazon.

Rather, the page from their book we need to take is the adoption of relentless focus on and execution of an awesome customer experience.


Author: Lyndon ReidStrategic Partnership Builder & Insurtech Advocate