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Delivering complaints excellence in the insurance sector

Research recently conducted by Huntswood has revealed a large disconnect between customers’ expectations of the speed of complaints resolution and what businesses are actually managing to achieve.

These concerns around efficiency are addressed in Huntswood’s ‘Complaints Outlook 2019’.

Data for the Outlook was collected from interviews with over 30 leading financial services and utilities firms and survey responses from over 5,500 customers. This data paints a clear picture of the success (and failures) of the industries’ complaints handling operations.

The insurance industry, specifically, faces a series of complaints challenges, ranging from complaints about medical, motor and travel insurance to complications in warranties, home and building cover and legal expenses. The complex nature of insurance products certainly adds to the pressure already heaped on firms.

Customers have the right to complain if they are unhappy with the way their claim has been dealt with, of course. Surprisingly, though, customers today are less likely to make a complaint. Instead, they are much more likely to vote with their feet and simply switch providers.

This means the stakes are even higher for insurance complaints departments.

So how can firms drive more valuable relationships with customers?

We have calculated that firms could increase their long-term customer retention rates from a little under 50% to as much as 75% by delivering a speedier, more effective complaints experience.

Firms can improve their interaction with customers, ensuring they feel valued, by:

  • Reviewing the complaints target operating model with a focus on identifying opportunities to reduce the time to resolution
  • Completing a ‘training needs assessment’ on their staff with a focus on soft skills and relevant specialist knowledge
  • Carrying out a ‘mystery shopping’ exercise to test how well issues are logged through all customer contact channels and refining training and / or the complaints definitions

The key challenge firms are now facing is not only understanding and ensuring good customer outcomes, it is continuing to deliver good outcomes in line with rapidly changing customer expectations.

Customers expect firms to show “humanity” in their approach to complaints handling, displaying high levels of empathy and understanding. This is actually easier said than done in rush or overstretched departments.  

If firms manage to meet these expectations, 1 in 3 customers will share a positive complaints experiences. In turn, half of those who listen will make a purchase from the business. There’s obviously a strong business case here for delivering ‘complaints excellence’.

The ‘Complaints Outlook’ provides firms with many of the tools they need to transform their operations and to meet the evolving standard. Our calculation model enables firms to quantify the potential financial impact of providing a better complaints experience.

Good complaints handling does not only drive deeper relationships with customers but also gives firms the knowledge and data they need to make improvement to the products and services they provide.

Last updated 13/09/2019