Insurance has always been built around trust. Our consumers take out an insurance policy with us buying into a promise that in the unlikely event that whatever risk they are insuring against did occur, we as the insurer would “have their back” by paying the claim as promised. As a result, they would benefit from peace of mind knowing that their risks have been managed.
For life insurance, the peace of mind of the insured is that their family will be taken care of after they are gone; for disability insurance peace of mind is that if they become disabled, they still get an income; in health insurance, peace of mind is that they will not have to decide between a critical medical procedure and food on the table.
Still the question begs; can one have peace of mind without trust? Once our consumers insure with us, do we inspire trust and therefore peace of mind?
The insurance industry has overtime experienced various challenges key among them that of poor public perception, one of the reasons that have led to low penetration levels. The main reasons often cited for failure to purchase insurance covers are that;
• Insurance is too expensive,
• They overheard negative talks on insurance or know of someone who had a bad experience,
• No good understanding of insurance due to jargon, hidden clauses and small print,
• Lack of information about insurance products available
• Lack of trust in insurance companies.
These reasons result into negative perception of insurance which then inform consumer purchase patterns. Whether it is the allegations of fraud or mis-selling, or of unscrupulous individuals seeking to defraud an unknowing consumer, the feeling most consumers have after purchasing
insurance is not one of peace. Those who have benefited from insurance exist but may not speak out as often. Besides, it takes just one negative case to damage public perception of the industry.
Where then is the opportunity? While there is no single solution or quick fix to building trust, there are opportunities focused on improving consumer experience therefore enabling insurers to begin fostering trust with existing and prospective consumers. These include;
• Simplified Products and Communication;
while terms like sum assured, lien scale, excess or premium are common for insurance
professionals, they are not obvious for our consumers. If consumers do not have a clear
understanding of the insurance products being offered to them, trust will continue to be an issue. The language we use needs to be clear, written in plain language and transparent. Without this, misunderstanding and confusion can occur and further result in suspicion and mistrust.
• Leveraging on technology to create superior consumer experiences;
from the first time the consumer engages with you, it should be an experience that projects reliability, competence and sincerity. Today’s digital solutions provide insurers with a multitude of ways in which to become more transparent right from;
o Easier access to policy documents and information, make policy documents,
underwriting criteria, and disclosures available online.
o A seamless self-serve user experience for purchase as well as service.
o Flexibility in product customisation. Instead of a pre-packaged, one-size-fitsall approach to products and product bundling, give consumers the ability to
modify plans according to their perceived needs.
• Hook products that introduce consumers to experience insurance;once they come on board, treat them right and give them a reason to stay every single day.
The more they have a good experience, the more they trust us. Mobi-loans are the banking industry’s hook product. What should that be for insurance?
• Shorter term opportunities for ‘Moments of Truth’;
for a typical life insurance client, the moment of truth on the promise will either be on
death or policy maturity which is often anywhere between five years to 25 years. This takes away the opportunity to make a positive impression as well as referral business. Should we then, consider creating opportunities for ‘moment of truth’ sooner allowing clients to test the promise and as a result continuously build trust, for example a component of the benefit available in six months, one year?
• Real versus perceived value;
people want their insurer to understand what is important to them. We as insurers are often very good at telling the world what we do, but do we really understand what our consumers really want or need? Most insurance products available for sale offer real value from the eyes of the insurer. For example; a product with various death benefits offers protection for their loved ones. Do they offer real value based on the consumer’s perception? Product
design, features and packaging should consider the consumer’s perceived value of choice and seek to strike a balance between real and perceived value.
There can be no peace of mind without trust. Consumers want to be able to trust that
their insurer will be there when they need them and act in the consumer’s best interest
rather than their own. There is an obvious dividend to be gained from building trust with consumers and creation of any uplift in consumer trust. Deliberately developing trust could very well be that competitive edge.
The writer (Njeri Jomo) is the Head of Retail Products at Britam Life Assurance Co Ltd