The differentiator for independent insurance agents has always been the quality of the customer service they provide to their clients. Unfortunately, in today's challenging market, that focus on clients can fall to the wayside.
The standard of customer service varies from agency to agency and, in some cases, from agent to agent. Those making strides to improve their customers’ experiences are more successful than those who simply say: “This is how we’ve done it for 50 years; this is how my father did it,; and this is how we're going to continue do it.”
So what does superior customer service from insurance agents look like today? What trends have forced changes upon agents in terms of customer service, and what best practices can they follow to set up their agencies for success?
See also: Customer Segmentation Is Key
External Factors Affecting Customer Service Norms
Digital transformation
Technology has transformed how agents and clients communicate. Younger insurance buyers have different expectations than prior generations. They expect self-service, for example, paying bills and filing claims online. Older generations, however, might eschew some claims automation tools while believing they understand the products available and do not need assistance.
These generational differences can create huge opportunities for agents to play more of a consultant role when it comes to advising clients on their risks as well as introducing more tailored insurance products. For example, agents can position themselves as educators, introducing and explaining new products and services, such as usage-based insurance. Some clients in a usage-based insurance model will resist having their vehicle report driver data while others will appreciate the ability to lower their premiums. As a result, agents have an opportunity to map out the pros and cons of the usage-based model and position themselves as valued advisers rather than simply selling.
Agents must also recognize that the differing needs and preferences of insureds extend beyond product offerings and can even include how they want to communicate. Some want to be emailed, while others prefer a phone call and still others are more comfortable with text messaging. Although these forms of communication may feel less personal, they can actually be more engaging and help insureds to understand, in many cases, what they do not know they don’t know.
Artificial intelligence (AI)
AI is one of the latest and most important tools for customer service. AI can also intimidate some agents. We need to understand that AI does not have to replace agents. Rather, it should support and enhance the customer experience process and the agent/insured relationship. Agents should not fight AI; they should embrace it. Take advantage of chatbots, virtual assistants, self-service portals and mobile apps as much as possible. Agents can also work with their carrier partners and investigate what technology they have available. Not only will doing so help their client relationships, adopting these tools will make agents more competitive.
The reputation of the insurance industry
Relationship building remains paramount, so understanding your client base is critical. Insurance is a product clients know they need but do not want to purchase. It is a product used mostly when the client has a loss and needs to make their business or personal financial circumstances whole. In fact, clients do not even know whether the policy will work as intended until they file a claim and speak with their insurer.
In part, this is why the insurance industry has earned a negative reputation through the years. It may be that agents did not ask enough questions of their clients during the buying process to understand the client’s needs and insure the property and its contents to value. Agents likely did not spend the time necessary getting to know their clients. In a situation like this, a claim can lead to an unfortunate experience for the policyholder. And in today’s litigious environment, unhappy clients are more likely to file a lawsuit.
See also: Customer Success Is Key, but Where to Start?
The Keys to Better Customer Service
Agents can overcome the industry’s reputation as well as challenges introduced by digital transformation and AI to achieve superior customer services by using the digital tools available and by spending more time understanding their client’s situation. Specifically, agents should confirm how the customer wants to interact with the agent, managing customer service from the beginning by asking the following questions:
- How often does the client want to communicate with the agent?
- What renewal increase with the client accept before the agent decides to market the account to other carriers?
- When does the client not want to hear from the agent?
- How comfortable are they with certain technologies?
If agents are not truly spending the time to understand the coverage issues their clients face as well as how they like to communicate, then agents may not be able to give their clients the best advice and customer service.
Despite the direct-to-consumer trends prevalent in the marketplace, clients still want an insurance agent they can call who will understand them and provide personalized guidance. Technology must be part of the formula for superior customer service, but it can’t be the only component. Customer service, built on relationships and in-person as well as virtual interactions, will be key to the future of the independent agent.
