The customer-acquisition strategy, the way a prospective customer is briefed about a product that he buys and information on the channels available to interact with the insurer for all his future needs determine the basic framework for a long and mutually beneficial experience and relationship for a policyholder.
Buying life insurance is just the beginning. Subsequent interactions may go even beyond generations, and even life. Such a relationship, therefore, must have a strong foundation.
In the business of life insurance, factors like knowledge shared at the beginning, dynamics of evolving needs of customers over a period of time and commitment to fulfill promises when the moments of truth arise contribute to building such a foundation. How to treat and retain the customers thus acquires greater significance than how to acquire customers.
Life Insurance Corporation (LIC) has done exceptionally well in empowering its intermediaries to render doorstep service to the customers. This is the secret of LIC?s wonderful reach even in the remotest areas of the country and this is reinforced by the fact that it has regained its market share in worst of the times for the industry.
But a close scrutiny of common causes of complaints as registered with various companies, the Insurance Regulatory and Development Authority (Irda) and the offices of the ombudsman do point to an indisputable fact that policyholders are generally not treated fairly. Being treated respectfully remains a far cry for most of them who pay to run the industry.
During my recent encounters with a few policyholders and even claimants, I have observed that even though systems are in place in almost all the companies for monitoring quality of customer service, what derails the whole lofty objective is the insensitivity on the part of the front-office employees who treat the policyholders as retail customers and who are themselves deficient in knowledge for rendering satisfactory service. They are influenced by the call centre or BPO culture. But life insurance requires building relationship at all levels.
Most complaints filed with the regulator or any such forum are sequel to one frustrating experience: ?no body is listening?.
The insurers will have to review from time to time such dysfunctional teams headed by myopic managers. They bring bad name not only to the company but also to the industry and drive away a large number of customers to other financial instruments. The insurer?s corporate ethos regarding dealing with the policyholders or nominees has to be very passionately drilled down to the lowest level.
Some kind of ruthlessness is warranted to weed out those who do not imbibe and practice the nuances of this highly emotion-oriented business.
In the November 2011 Irda journal, the chairman remarked that in insurance, the deal is closed between parties who are ?unequal in understanding and strength?. One side has all the knowledge and information, but the other side has only a need that also he may not fully realise. The insurers willing to treat customers fairly need to put in place a system that does not exploit the aforesaid inequality only for chasing short-term goals of raising the top line.
The ground reality today is a shameful saga of misselling and exploitation of several thousands of innocent customers.
Offices of all ombudsmen are flooded with such cases. On the other hand, there are instances when customers are denied prompt service in the name of half-yearly and yearly closing.
In such situations, the urge for window dressing prevails upon quality service practices. Even those insurers who claim best claim settlement record worldwide suffer from these frailties. I am sure that no corporate policy supports such unscrupulous means for improving year-end results. But deviations of this kind deny the customers a fair deal for reasons irrelevant to them.
This primitive attitude must be discarded immediately so that excellence is recognised by the market and not only by the board.
Feeling of excellence within the four walls serves no purpose in this fiercely competitive market. Former Irda chairman Hari Narayan further stated in the same message, ?The achievement on paper even on an ongoing basis may still be possible for several service providers. However, whether one has really rendered the service with the best of intentions and with the real sense of genuine customer service orientation is the million dollar question.?
Life insurance is a contract and the principle of utmost good faith applies to the transaction between the proposer and the insurer.
Violation of this principle is often cited by insurers to deny benefits to policyholders or claimants. But I am sure that
no proposer ever understands these legalities and the factor
of ?utmost good faith? while buying a policy. Hence, to be
fair to the customers, insurers must spend on customer education in a big way.
*The writer is former MD & CEO, Star Union Dai-ichi Life Insurance