No one purchases insurance from a carrier because he wants to. It doesn’t taste good, drive fast, make you thin, keep you warm or save time.
Nevertheless, many of the hardworking individuals who are engaged in the insurance business have been able to build trusting, supportive, mutually beneficial relationships with their clients. These insureds recognize risk transference through insurance products is vastly preferable to the alternative. They also recognize a risk management and insurance partner can decrease the cost of risk through his or her diligent efforts, just as a solid, well-capitalized, responsive carrier will pay claims in a timely manner.
While this is a very good start, the hardworking men and women working at carriers and brokers can go further by embracing the Customer Success Paradigm. One place to look for the genesis of this paradigm is the SaaS—Software as a Service—service model. Typically, with SaaS, customers pay monthly fees. Also typically, customers can end the relationship at any time. Because providers must win customers’ business each month, they are motivated to help customers successfully use their products and services.
Claims advocates represent the clearest example of how brokers and carriers can help clients successfully use the services for which they have paid. By staffing claims departments with trained, responsive claims advocates, insurers embrace the Customer Success paradigm by helping clients to successfully access their insurance coverage. When clients file claims, they depend upon providers to manage them quickly and efficiently. They also expect carriers to honor claims in a timely manner, without friction. By understanding and acting on these expectations, brokers and carriers prevent client defections.
InsurTech potentially holds the promise of elevating customer success in claims departments because insureds will vote “yes” for increased transparency and efficiency when placing claims. They will also welcome multiple channels for submitting and settling them. However, Insurtech will not replace the brains and EQ of skilled claims advocates. It can speed up the process but not fully deliver success on its own.
Web-based client portals also provide a way for customers to successfully use their insurance coverage. When forms are accessible 24/7/365, insureds can conveniently perform many tasks needed to successfully use their insurance coverage without any friction. Once again, client success generates good client relations.
Midterm Stewardship Reports are also effective ways of helping insureds to successfully use their insurance coverage. By issuing these reports, risk managers can audit insurance policy usage and recommend ways to improve usage. If there is a midyear policy correction, it can be made efficiently.
Netflix and Amazon are two companies that have successfully embraced the Customer Success Paradigm. We in the insurance industry can learn a great deal from them.
One of the ways Netflix manages success is by analyzing customers’ viewing habits with a sophisticated algorithm. This algorithm guides customers towards successful programming choices by issuing prompts. If left on their own, frustrated customers might opt out of the subscription service after failing to find programs matching their preferences. (I personally become frustrated before five minutes have passed.) Instead, Netflix preempts potential defections by guiding customers to success through programming recommendations.
Amazon helps to deliver customer success by including browsing and purchase histories on its website. Amazon also delivers customer success with helpful advice regarding product searches, including “Frequently bought together,” “Sponsored products related to this item,” and “Customers who bought this item also bought.”
The same amount of effort goes into winning a new insurance account, whether the client defects after a year has passed or remains a client for 25 years. The difference between one and the other can be the difference between guiding insureds to successful use of their coverage, and leaving insureds to figure it out for themselves.