Insurance & Technology is part of the Informa Tech Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Data & Analytics

11:59 AM
James M. Kerr, Best Practices Enterprise Group
James M. Kerr, Best Practices Enterprise Group

Impeccable Service Delivery Is The Strategic Differentiator

Carriers can no longer tolerate any behavior that is inconsistent with the delivery of world-class customer service. If you don’t put the customer’s needs ahead of your own, you simply don’t last.

Related: Kerr's previous article for I&T: P&C Policy Admin System Replacement: Be Careful Whom You Trust

It’s clear that something has changed in the P&C carrier space. Long gone are the days when an insurer could name its price and get it. Customers have become more demanding. They want what they want when they want it – and they’ll accept nothing less. In response, many carriers are evolving to specialty product customization models as a way to extend reach and volume. It has been a matter of survival. After all, if you can’t figure out how to meet your customer’s specific needs, they will find someone that can.

But, product design isn’t the only element of the value proposition that needs to be tailored. The delivery of impeccable customer service has become one of the key differentiators for today’s insurance enterprise. Carriers can no longer tolerate any behavior that is inconsistent with the delivery of world-class customer service. If you don’t put the customer’s needs ahead of your own, you simply don’t last.

But, this is really nothing new; it’s well understood that a satisfied customer rewards an insurance company with loyalty. Every bad customer experience, on the other hand, not only leads to loss of future business, but, severely impacts an insurer’s reputation in the marketplace. Somewhere along the way, it seems we may have forgotten this basic truth: thrill your customer and they’ll thrill you.

In a time of unparalleled competition, where all of the rules have been broken and the contestants are looking for new ways to devastate their rivals, it’s refreshing to recognize that an important part of the solutions sought can be found in this basic fundamental. But, the current paradigm must shift away from product and pricing in order to place a renewed emphasis on service as the differentiator.

How To Drive the Paradigm Shift

Understanding this dynamic, carriers must make a deliberate choice not to engage in the pricing war that seems so prevalent in the marketplace at the moment. Instead, re-double the investment in the delivery of impeccable customer service. In the end, it is this very strategy that can earn a company unequaled status within the industry in the long run.

A Service Delivery Program is executed in four phases. As described below:

  • Executive Interviewing Phase. By engaging the executive team in the discussion from the onset, a carrier hedges the bet against the management resistance that can sabotage the program. Each senior executive interview centers on discussing existing departmental challenges and ideas for how to best compete in the changing marketplace. The data and insights gathered is then synthesized and used to inform the Baseline Characterization Phase of Service Delivery Program.

  • Baseline Characterization Phase. Where the Executive Interviewing Phase aimed to engage the executive team, the Baseline Characterization Phase garners staff level participation. Departmental workshops are held to identify where the firm is currently in regard to customer satisfaction and service delivery.

    The work done at this time is focused on characterizing the firm with all of its warts and blemishes. This serves as a catharsis for staff members and helps to connect personnel to the Company’s planning effort as the proverbial “dirty laundry” gets aired.

  • Visioning Phase. It is here that we paint a picture of what we want the Company to become over the next few years in regard to its Service Delivery Model. It’s done by developing a vivid and exciting story that each and every employee can read and understand. Written in future tense, the Service Delivery Vision Story describes in detail what it is like to work at the carrier and deliver impeccable service to the company’s customers.

  • The Planning Phase is the last piece of the planning program to be performed. Comparing the baseline to the target vision, firms are able to typically identify over a dozen initiatives that are needed to be staffed and funded over the coming years in order to bridge the gaps between where they are today and where they want to be tomorrow in regard service delivery.

    Each project comprising the plan must be scoped out with interdependencies defined. Once this is done, the projects can be spread across a timeline for execution based on their interdependencies and strategic significance.

What’s In A Plan

Every Service Delivery Plan will be different depending on the size of the carrier, its customer-base and the current state of service delivery. The projects and programs that comprise all plans will focus inevitably on people, process and technology. Some plans may identify efforts dedicated to forging new strategic partnerships, others will define data mining and CRM programs, most will place a unwavering emphasis on self-service delivery (that require extending web-based and security applications).

Regardless of the content of the specific service delivery plans, rest assured that carriers are positioning, now, for continued success by using service delivery as the differentiator.

About the Author:James M. Kerr has worked in and around the insurance industry for more than 20 years. He has held executive positions within AXA Financial and Mitsui Sumitomo and has provided consulting support to many other firms within the industry, including vendors like LexisNexis and Insurity.

Register for Insurance & Technology Newsletters