Life Insurers Fail to Follow Through on Customer Service
Rob McIsaac | February 10, 2014
We live in a time of remarkable convenience and incredible advances in the technologies which permeate our daily lives. The once unimaginable stuff of science fiction quickly comes to us now in ways that are hard to fully comprehend.
The iPhone is now approaching its sixth birthday. With the current state of smartphone technology, an individual can now pocket better computing power than a state-of-the-art desktop PC circa 2005. Many people carry two. And the Mac which arguably revolutionized the last generation of computing with its user interface? This week it will turn 30.
Some industries have capitalized on this, creating smooth and easy-flowing business processes that make information access nearly transparent and gratification immediate. Companies such as Amazon and Zappos have forever changed customer expectations around what good service looks like and what expectations for timely delivery should be. In the financial world, banks, investment firms and personal lines P&C carriers are finding ways to deliver service that delivers what the customer wants, when they want it, and through the communication channel of choice.
And then there's life insurance, which seems to be mired in a sales and service paradigm that is more in synch with the Eisenhower era than our own. A recent, personal, experience punctuated just how much of an issue this can be.
As part of my own life insurance portfolio, I recently embarked on the replacement of a 10-year term policy that was at "end of life." This provided a remarkable “Mystery Shopper” opportunity as I traversed the options in front of me.
My first touch was with Google, who took me to an aggregator. Less functionality than I remember from 2004, with a call to action of "we will call you." They eventually did, quoting a rough price and outlining a six to ten week process involving more questions, needles, fluids and very little proactive communication. Somewhat disappointed (but not surprised) at the described process, I green-lighted it. And then they went dark.
Somewhat concerned by how this was going by week two, particularly since I'd "only" budgeted three months for the effort, I started searching for options. I decided to apply to a true direct carrier and with a large national brand with a traditional agency force. Both provided quotes, but with somewhat odd warnings about "this might not be the real price." The only possible call to action was to be through telephone calls.
Now fascinated, I allowed all three carriers to go forward to see who could come up with the best offering in terms of features and price. It ultimately took two to three weeks for the lab to do blood work my doctor got done in two to three days. All three carriers insisted on wasting money on the para-med work, even though my doctor had done the same tests only a week before I applied. Thankful, all three used the same para-med service, which minimized the number of times I had to grapple with an unnatural fear of needles.
About two months into the effort? Longer than some wars have lasted, I've achieved my objective of a new policy. The results were mystifying.
The first carrier I went to, via the aggregator, has simply fallen off the face of the earth. No communication other than that they seemed to be having trouble with getting the para-med scheduled, and a request that I be more proactive in trying to drive this interaction. This seemed particularly odd, since I’d already spoken to the para-med who was too busy to do things quickly, yet somehow incapable of scheduling things outside of a prospective two-week window. We finally got it done, concurrently with the same work for the other two carriers, but this company shows, literally, no signs of life.
The direct carrier was quicker on the uptake, but warned me that the rate they quoted was, effectively, a “come-on” rate that few people could actually get. Despite this warning, we proceeded and, after what seemed an inordinate period of time, they came back with a quote that was 50 percent higher than the quote I got via their website. That seemed extreme, particularly in light of what the third carrier accomplished.
Armed with a traditional career agent who received the lead from my website query, this company got off to a slow start and was completely dependent on hard copies and wet signatures to get anything done. Since the agent lives four hours away from me, all transactions had to be done via overnight mail. Still, seemingly devoid of any technology more complex than a FAX machine, they concluded their work faster than anyone else … and managed to deliver the lowest-cost product for the desired coverage. At this point, as a middle of the pack Baby Boomer, I am reasonably satisfied with the outcome. I'm also secure in the knowledge that I am unlikely to ever have to do this again.
Which actually may be the real problem that carriers will face in the future. While some younger Boomers and older Gen X prospects may be willing to endure the prototypical life underwriting process, their numbers and tolerance will both wane. Even more painfully obvious: younger prospect groomed on Amazon and iTunes, will never be willing to go along with a process that is as arduous, inexplicable and arcane. Life carriers have talked about the need to find a better sales and service model for years. It's time to stop talking and start doing, lest they risk falling into irrelevancy.
(Rob McIsaac is a principal with Novarica.)
- Now Accepting Nominations for the 2019 ITA Bridge Awards
- It's time to register for ITA LIVE!
- Registration is Now Open for ITA LIVE 2019!
- What to Expect from a Digital Experience Platform Implementation
- ITA Pro Magazine September Edition is Now Available
- It's National IT Professionals Day
- Save the Date for ITA-LIVE 2019
- OneShield Software and UrbanStat Work Together to Improve Real-Time Analytics and Risk Decision-Making
- ITA LIVE 2019 - SAVE THE DATE!
- Insurance Technology Association Announces New Editor-in-Chief
- August 2018 Edition ITA Pro Magazine is Now Available
- Enterprise Architecture in an Agile World
- Top 10 Tips for Securing Your Mobile Devices and Sensitive Client Data
- Industry Insight: 4 Global Insurance Trends in Digital, Data, Content Services and Security
- Diving Deeper into Prioritizing Your Strategic Digital investments
- Why Content Rules
- How Mass Personalization Will Open the Small Business Benefits Market
- At Year End 2017, Will Your Organization Be Protected from Cyber Risks?
- Do Insurance Bots Dream of Mitigating Risk?
- Conditioned to Respond
- Managing & Mobilizing Insurance Data in a Connected World
- Race to the Finish Line
- New Tools, New Opportunities in Claims
- ITA LIVE: Reaching Insurance Industry Crossroads
- Advice to Insurance IT Leaders: Keep Your Eye on the Ball
- New Date, Venue for ITA LIVE 2017
- Guidewire Makes Major Push to Small and Midtier Market by Acquiring ISCS
- Insurance Disruption is Happening Right Now
- Insurity Adds Strategic Investment Partner, General Atlantic
- Beyond Transformation: The Convergence of Finance, Risk, and Actuarial Functions
- The Rapid Evolution of Consumer Protection Regulation
- Talent Hunt: Finding, Attracting, Retaining Top People
- Insurers Flexing Their Distribution Models
- Technology Driving Disruption in Insurance
- Fear of ‘Next Bubble’ Challenges Life, Annuity Carriers
- Technology Allows Commercial Lines Insurers to Stand Out
- Single Sign-on Viewed as Biggest Tech Challenge for Agencies
- ISCS Observes 20th Anniversary; Scurto Predicts Major Changes Ahead
- Policyholders and Their First Impressions
- Progressive Making Progress on the UBI Front
- High and Dry: Insurers Search for Disaster Recovery Plans
- Insurers Sign The (Un)Dotted Line
- Reflections of a Retired Insurance CIO
- Mobile Device Management Just One Answer to BYOD Issue
- Lessons from GEICO and Progressive on Winning the Critical Buying Stage
- You Are a Target for a Cyber Attack
- Web-based Systems are the Next Evolution in Claims Technology
- Gaining a “Wow” Experience from Web Users
- Time to Shift from Business/IT Alignment to Business/IT Alliance
- Healthcare Insurers Changing to Consumer Model
- Organization is the Key for Selecting Software Vendors
- Analysts Expound on the Needs of the Mid-tier Insurance Market
- Finding the Cure for Obamacare’s Website
- New Software Solutions Benefit Insurers on the Inside and Outside
- Products, Market Impede Investment in Systems for Life Insurers
- Combatting Cyber Threats: Predict, Prevent, Persist
- The Future of Telematics Heads Beyond Insurance
- The Shame in Cyber Security Lapses
- Building Policy Administration Systems for the Future
- Insurers Look Into The Eyes of Their Policyholders
- It’s a New Dawn for the ITA
INSURANCE IT NEWS
- Hippo Insurance Secures $70M Series C Investment Led by Felicis Ventures and Lennar Corporation
- Cloverleaf Analytics Announces Version 2.0 Release
- AmWINS selects ClarionDoor’s Digital Distribution Suite to Power Underwriting Platform
- Ask Kodiak Connects TrustedChoice.com Carrier Appetite to TechCanary Agency Management System
- Seth Bostock Joins Lucens Group as CTO with Vision to Simplify the Disability Insurance Experience
- Life Insurers Enhancing Claims Systems, Novarica Profiles Six Prominent Providers
- HazardHub Releases Frozen Pipe Score, Ice Dam Score and enhanced Weather Variables
- Big Gains & Big Bets in the Independent Insurance Channel
The Email Chat is a regular feature of the ITA Pro magazine and website. We send a series of questions to an insurance IT leader in search of thought-provoking responses on important issues facing the insurance industry.
ITA is pleased to present the 2014 Webinar Series. We have many topics for you to choose from and attendance is open to all ITA members. The webinar topics are current and exciting — ranging from predictive analytics to telematics and will focus on the direction insurance carriers need to follow for the future. All webinars are presented by insurance IT professionals along with some of the leading analysts and consultants in the field. There is no cost to attend an ITA webinar. For more information and to register for the webinar, click the “title” of the webinar below.
BLOGS AND COLUMNS
The Insurance Technology Association is pleased to announce that ITA Live 2019 is scheduled for May 5-7, 2019 at the Marriott Harbor Beach Resort and... READ MORE
It has become a common refrain over the past few years to view the practice of enterprise architecture (EA) as something that time has passed by, much... READ MORE
You have surely heard it said that small businesses are the growth engine for America. Today, the phrase has a special ring to it for benefits... READ MORE
With stagnant growth and lingering low interest rates, the life insurance industry faces a challenging future... READ MORE
Finding insurance carriers willing to write commercial lines risks has always been a challenge for producers... READ MORE
As Guidewire Software prepares for the start of Connections, its 11th annual user conference that begins on Nov. 2, Brian Desmond, chief marketing... READ MORE
Fraud detection has always been and will continue to be a critical component of claims management. Learning the lessons from current claims Straight... READ MORE
- Vendor Views