We hear a lot about how the insurance industry needs to step up its adoption of technology and look to the future. This most likely is true, but in that drive to futuristic business operations, it’s easy to forget some of the traditional processes that still produce results.
Such is the case with customer service. Conflicting reports and research about customer service can be confusing. According to recent research from Needham, Mass.-based TowerGroup Inc., consumers increasingly demand 24/7 electronic access to their financial services institutions, and insurance is not immune.
Conversely, according to an IBM survey of 1,000 American consumers, U.S. consumers want personalized service and human interaction from their insurance providers. The survey found that three-quarters of consumers are very satisfied with the service provided by their agents, and remain committed to working with them in the future. The study comes at a time when agent-based carriers are facing increased competition by direct channels and direct-only insurance carriers.
Perhaps the differing conclusions can be attributed to the different generations of customers—older consumers want face time, while younger consumers want e-mail or texting options. Would it be easier to do business with just one generation, as does Precedent Insurance Co.? The company, which launched its business in August 2007, and is a subsidiary of Livonia, Mich.-based American Community Mutual Insurance Co., targets healthy, 19- to 35-year-old consumers, and knows its customer base will take advantage of advanced technologies, such as Web 2.0.
Yet, Precedent is an isolated example, as the insurance business doesn’t easily lend itself to this type of practice. While it’s easy to get wrapped up in customer service technologies (e-mail, automated voice, IM) and their attendant benefits (accuracy, cost savings, etc.), it also is evident that a mix of technology and human contact is necessary for most carriers.
The IBM study demonstrates consumers’ unwavering loyalty to their insurance agent regardless of potential savings that online channels can provide, and it indicates how insurance carriers are providing their agents with innovative technologies to deliver more personalized customer services. Only 15% of respondents said they would consider dropping their agent to save $150 annually by purchasing insurance online, and 54% indicated no amount would make them switch. In a similar vein, 54% of consumers said their insurance provider is innovative as compared to other industries, and 71% of respondents said they plan to work directly with their agent for future insurance needs.
The insurers who truly know their customers and can provide the right balance of technology and “high touch” ultimately will be the winners. Maybe the day will come when customers won’t need to have face-to-face interaction with insurers, but right now is time to face the facts, no matter how conflicting they may be.
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