Many improvements to the customer experience have been borne out of one simple necessity: to improve the life insurance industry’s reputation.
It’s no secret that our industry has an image problem. Many people either don’t trust life insurance providers or they don’t see the value in obtaining cover. To reverse this perception, the industry has to become better at educating people about how life insurance can help them in their darkest hour, and come up with new ways to deliver value.
While there is no silver bullet, continually trying to improve the customer service experience is at the core of most solutions. And in some ways the industry is rising up to the challenge. In recent months, life insurance has produced some incremental innovations that add up to a better service experience for financial advisers and their clients.
By putting advisers and their clients at the centre of everything we do, the industry can deliver service innovations that we know will resonate with the people who count the most.
As outlined in this year’s Association of Financial Advisers White Paper, titled The Value of Protection – Creating an advocate for life, the task of fulfilling customers’ needs is an ongoing challenge and the goal for life insurance providers is to assure customers that adequate cover is a worthwhile investment.
Many people who participated in the research were sceptical about life insurance because they didn’t trust the industry, were in denial about the need for cover or were undereducated about the benefits of insurance.
Some criticised the industry for lacking transparency, being too money focused, taking an adversarial approach to claims and attracting too much negative media coverage.
All of this leads to the simple outcome of too many Australians taking the risk of being underinsured.
Solving the problem of underinsurance will become easier if current policyholders become advocates, so then they can convince their friends and family to obtain cover.
But they will only become advocates if they are happy with their service experience.
Two key touchpoints have a profound influence on a customer’s perception of value – the sales process, when the customer finds out more details about the benefits and costs of obtaining life insurance; then at the claims stage, when the customer experiences firsthand how the benefits impact their life.
At BT we have invested a lot of time into trying to turn the negative perception of life insurance around, by placing the customer at the centre of product and service development, particularly during the claims process.
One result of our approach is an industry-first teleclaims service for income protection and trauma insurance claims. Other life insurance businesses have followed suit. BT now processes one in four income protection claims over the phone, without clients having to complete forms, reducing the time it takes to make a claim.
Much of this customer-centric design approach originated from a study we did in 2007 called Fishbowl. The project’s objective was simple: to improve the life insurance experience for financial planners and their clients.
It was called Fishbowl because we wanted in particular to make the life insurance sales process – another customer touchpoint which can often be complex and technical – totally transparent by providing clear and proactive communication.
This customer-focused approach was instrumental in paving the way for BT to become one of Australia’s fastest growing life insurance providers. Only two years after launching BT Protection Plans to the independent financial adviser market, we reached the milestone of one million policies earlier this year.
It has also resulted in strong customer satisfaction measures. For example, 82 per cent of respondents to a claims survey rated their service experience at BT as “excellent”.
For the life insurance industry to regain the trust of the Australian public, we must continue on this journey of making improvements to customer service. Judging from the AFA white paper, the industry has only scratched the surface.
This article was originally published on the Professional Planner insurance app for iPad. Download the app.
