5 tips for mastering customer service in insurance

Consultant John Goodman shares insights on the best practices he’s derived from other industries for serving insureds.

Customers want to be engaged, educated and communicated with clearly so they feel valued and understood by their insurer. (Photo: 13_Phunkod/Shutterstock.com)

Many in the insurance industry have noted that the best practices in service and technology usually do not originate here but instead are carried over from other industries. For example, many InsurTech founders brought technology innovations they had applied elsewhere over to insurance to achieve breakthroughs that are now changing the industry. Think Lemonade, Hippo, Neptune and many others.

In customer service, this is true as well. John Goodman, the author of the books, Customer Experience 3.0 and Strategic Customer Service and a noted global consultant on customer service and customer experience, shared his thoughts on the Digital Insurance Leaders series podcast.

Here are five key insights from that discussion.

Tip #1: Customers that complain can become your best customers

Let’s face it, the insurance industry does not have the best reputation. Claims issues, an intangible product and complicated legalese do not help.  Goodman’s research discovered that if customer complaints are handled quickly and effectively, the complainers become the MOST loyal customers you have and are the most likely to tell others how great you are.

Tip #2: Educate your customers about what is covered in their policy

Goodman says, “The biggest problem in insurance is that customers do not understand what they bought.” Most bought because they had to, not because they wanted to, and very few actually read the policy language, let alone understand it. One large insurer client sent a post-bind letter to the policyholder explaining “the most misunderstood areas within their policy” and what is and is not covered. The insurance company found that the customers who received the letter were more likely to add more coverage and less likely to complain or even sue. In auto sales, Tesla won’t sell you a car without your first watching a video about how to use it.

Tip #3: Be human

Remember the Delta Airlines safety videos? Nope, no one does, until they changed them to be humorous. Then everybody watched them, and at the same time started to think more highly of the airline overall.

Using conversational language in your communications and on your website makes a difference. When customers want to engage, provide them with a way to communicate with another person. Increasingly, customers prefer chat, email and text to a phone call, and recently have shown a preference for video chats. However, Goodman’s “National Consumer Rage Study” shows that when customers are truly angry, they prefer a phone conversation 7:1 over any other option.

Tip #4: Generate engagement with your policyholders early

Many insurance relationships consist of a subpar sales process and then, perhaps, a contentious nerve-wracking claims process. How can a company overcome this headwind? Goodman talks about how highly engaged customers have the highest lifetime value and identifies the best practices to create engagement:

Tip #5: Control the service experience

Many insurers outsource their operational support. You have more control over the experience and outcomes if you keep it in-house. In addition, some customers prefer voice interaction, some self-service, some email, text or chat. Have all of these options available and measure the results and outcomes of each channel. What gets measured gets managed.

For those in the insurance industry, taking these real examples from other industries and applying the same lessons to insurance will deliver better service and better relationships with our customers and business partners.

Trevor Burgess is president & CEO of Neptune Flood. Contact him at trevor@neptuneflood.com.

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