By Linda Koco
Contributing Editor, InsuranceNewsNet
LAS VEGAS, April 12, 2011 – Everyone in insurance should be a zealot about customer service – that was a key opening day message at the annual Life Insurance Conference.
“Customers are the only reason you are in business,” explained Robert McDonald, a business consultant with CSC, Houston.
In particular, insurance companies that sell through independent agents need to provide outstanding service — to the agents as well as the end customers -- in order to gain shelf space with those agents, McDonald said.
He was addressing an early bird session at the conference, which is co-sponsored by LIMRA, LOMA, Society of Actuaries and American Council of Life Insurers.
Independent agents may contract with as many as seven to 10 life insurance companies, McDonald allowed. But in everyday practice, these agents tend to do most of their business with just two or three companies.
That means carriers are competing with each other to be one of those top three companies, he said. This is where service becomes very important.
Agents are customers of the carriers too, in addition to the end consumers, he pointed out. The agents want to do business with carriers that provide top service, he said, citing findings of a recent survey by Celent.
Other studies show that both distributors and consumers have named “the ease of doing business” as a very important criterion in dealings with companies, McDonald said.
Companies are recognizing this rising demand for service and they are starting to spend money on it, he continued. Some of the questions they are asking are:
-- What do customers think at the end of a customer service transaction?
-- What do they understand?
-- How do they feel about the company?
It’s not just the intellectual understanding that is important, McDonald said. The customers’ feelings about the company and the service they have received are strong drivers of perceived value, he stressed. For instance, “feelings can impact the likelihood of the customer recommending the company” to someone else.
The idea is to focus on providing the most effective service, he said. That is what will drive efficiency.
One of the service trends McDonald sees is that agents and consumers have raised the bar on what they want to see in their customer experiences. They are seeing effective technologies elsewhere, and looking to carriers for it, too, he said.
Another trend is that having an efficient call center isn’t enough anymore. “You have to have additional channels for consumer and producers—other ways to reach you,” he said, pointing to social media (such as Twitter, Facebook, and YouTube), instant messaging and online chat as examples. “And, is your agent portal easy to access by mobile phone?”
Still another channel is a web technology that allows for crafting of ”online agents” who can chat and even complete certain transactions when a live agent is not available, he said.
Other trends: Everyone wants instant gratification; and producers also want carriers to eliminate the red tape “so they can get out and sell.”
The carriers must improve
Most carriers understand that they must improve their customer and producer experience, McDonald said. “But few have the process and technology to make it happen.”
To improve requires shifting to a customer-centric business model, he said. The nature of the organization and the existing IT infrastructure are “big barriers,” however. It’s hard to get a uniform customer experience because there are so many different technologies already in place, he explained.
For that reason, he predicted that it would take several years for a company to shift to a culture with a strong and consistent customer service strategy. It would require training not just on using the technology but also on how to treat the customer as a person, whether online or on the phone, he said.
An agent from the audience pointed out that many veteran agents still use phone and paper, and they are more productive than newer agents who are more technology savvy. So, he wondered, at what point should a company change to become paperless?
If it’s a captive agency company, the company can “legislate” the shift to paperless, answered McDonald. But if it’s an independent agency company, the current situation creates “breathing room.”
Linda Koco, MBA, is a contributing editor to InsuranceNewsNet, specializing in life insurance, annuities and income planning. Linda can be reached at firstname.lastname@example.org.
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