Business Law & Compliance

Keeping customers happy: The Insurance Act shake up

5 min read

23 August 2016

The Insurance Act 2015, billed as "the biggest change in insurance laws in 100 years", has come into force. It demands insurers to be more transparent and fair for customers in order to avoid the risk of misunderstanding caused by terminology and disjointed communication.

The onus is on insurers to engage with customers in a clear way at all times, across all channels. At the same time, the claimant will also be held to a greater level of scrutiny and transparency. With new expectations set for both the insurers and the insured, how will the Act change the experience that insurers’ offer?

At the heart of any insurance company is reams of sensitive customer data, meaning insurers have a huge amount of responsibility to keep it safe and organised. So it’s no surprise that data management is one of the areas that has seen the most change in this new iteration of the Act. Computerised record-keeping has been a feature of the insurance industry for decades, but as systems become ever-more automated the amount of data held by insurers has increased exponentially. Therefore, I welcome the new requirements for precision and transparency which means insurers will be lawfully obliged to manage data in a more efficient way.

Data is only as good as the means by which to interpret, utilise and deploy it. The law demands transparency, which means every customer-facing employee needs to have access to the same information, enabling them to respond quickly and efficiently to customer queries. The days of siloed data are (mercifully) nearing extinction, as the industry shifts towards data systems which store information in a robust and flexible way.

In both the B2B and B2C worlds, infidelity is rife amongst insurance customers who are more empowered, more social and more vocal than ever before. They are used to instantaneous communication and do not have the patience to be on hold to a call centre for hours.

The key to satisfying these empowered customers is by taking a human approach to customer service. A recent Accenture report found 76 per cent of consumers prefer dealing with human beings over digital channels to solve their service issues. Human interaction is essential for customer satisfaction, and although back-end data management is of course crucial, the “front end” experience is vital to customer satisfaction and, ultimately, loyalty.

Technology like CRM systems are supporting businesses to bring a human element to their customer experience. The technology takes data of multiple types, from multiple sources – and presents it to an employee in a manner that gives them all of the relevant information they need to better manage the full customer life cycle. Equipping employees with this information allows them to inspire customer loyalty through consistently delivering a relevant, personalised and frictionless customer experience.

However, recent research suggests the current level of customer satisfaction leaves room for improvement. The “UK Customer Satisfaction Index” revealed that, although the insurance industry is on an upward trend in terms of its ability to keep customers happy, the satisfaction score is 79.4 per cent.

The Act means customers are in an empowered position, with the knowledge that insurers have been legally instructed to improve the way they communicate with them. Insurers therefore need to ensure they are equipped for this challenge, liberating themselves from murky terms and conditions and disconnected customer service teams and developing a positive engagement with their customers. 

The raison d’etre for insurers is to provide reassurance to their customers. This Act is a big step forward for ensuring this is a value instilled in the fibre of their business, with the required new levels of transparency meaning customers do not feel that they are at risk of being ‘caught out’ and faced with unfair fees. I look forward to seeing how insurers respond to this new law – this could be a turning point for the industry, for the better.

Larry Augustin is CEO of SugarCRM.

Image: Shutterstock

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