For going on 30 years now, executives have complained about being "Amazoned": Even though they work for companies that aren't even remote competitors of Amazon, the executives are held to the same high standards for customer service that Amazon has trained people to expect.
In Amazon's annual letter to shareholders this year, CEO Andy Jassy goes on at length about how Amazon keeps raising those standards. Some of the letter is boilerplate that anyone who's cracked open a management book has seen, and some isn't readily applicable to the insurance industry, but I think two of his points could help the insurance industry greatly. They relate to having a "why culture" and figuring out what NOT to do.
Let's have a look.
Jassy's letter includes the obligatory bragging about recent accomplishments and projections of future wins but has a middle section that I found quite smart, on framing decisions. He says Amazon has long divided choices into "two-way and one-way door decisions"—decisions that you can walk back and decisions that you can't.
He writes:
"But, both of these constructs assume the door is unlocked. A lot of invention is about trying to open doors that have historically seemed bolted shut. And, over the past 30 years, we’ve found one of the most important keys to unlock these doors has been a simple question: 'Why?'
“'Why does this customer experience have to be this way?' 'Why can’t it be better?' 'What are the constraints—why must we accept them?' 'Why can’t we invent around that?' 'Why will it take so long to get to customers?' Why?"
Jassy says Amazon focuses on always improving its "WhyQ."
Insurers can't be as nimble as Amazon. Regulation means there aren't as many "two-way door decisions" in insurance. Even if you can reverse a decision, it may take years to unwind, say, the issuance of policies as part of a move in a new direction.
But there are still an awful lot of things in insurance that are done a certain way because they've always been done that way, even though they're inefficient and customers dislike them. Insurers should be asking: Why do we still use so much paper? Why has our "digital transformation" just moved us to digital versions of those paper forms? Why do claims take so long? Why does underwriting take so long? Do we really have to ask all those questions? Why, why, why?
Insurers have been asking lots of those questions over the past decade and have made progress, but "why?" is a question that has to be asked constantly, and we have a long way to go.
The second point in Jassy's letter that I think could greatly benefit insures relates to the first. It's about continually asking what you should stop doing because it gets in the way.
Jassy writes:
"Last fall, I asked teammates across the company to send me bureaucracy examples that they were experiencing. I’ve received almost 1,000 of these emails.... As leaders, we don’t always see the red tape buried deep in our organizations, but we can sure as heck eliminate it when we do. We’ve already made over 375 changes based on this feedback.... We are committed to rooting out bureaucracy that ties up time and dispirits our teammates."
I'd bet a similar exercise would net all kinds of gains at any company of any size in the insurance world. When I started taking week-long bicycle trips and was wondering how much clothing to carry, I read a slogan that made a huge difference: "If you take care of the ounces, the pounds will take care of themselves." The same is true of bureaucracy. There doesn't even have to be a huge aha! moment for the exercise to surface a host of seemingly benign practices that add up to real frustration for both employees and customers. (I wrote at length on this sort of exercise two years ago.)
I'm by no means saying Amazon is a paragon in every way. Many employees have complained about how they're treated. Lots of companies that sell through Amazon have sued it, alleging a variety of unfair business practices. Customers gripe about how the site has been junked up with ads. Amazon and its founder, Jeff Bezos, have drawn flak in some quarters for business decisions that seem to be designed to curry favor with the new Trump administration.
But Amazon built a massive business through a relentless focus on the customer, and insurers could learn from Jassy's advice.
Cheers,
Paul
P.S. Two other recent articles make useful points on improving the customer experience.
In "Why 54% of Customers Are Disappointed: 5 CX Mistakes Your Business Can't Afford," Bernard Marr says companies these days can capture data on every touchpoint with a customer and tend to use the data well in sales and marketing but often don't have clear insights and a real strategy for using the information to improve the customer experience. Marr also says companies make a mistake by restricting employees' authority. "This is one," he writes, "that most of us have probably experienced – a receptionist who can't offer a room upgrade because they aren't authorized to, or a retail assistant who can’t offer a refund without permission from their manager."
In "Human-Centered, Mission-Driven: What Insurers Can Learn from the Hospitality Field," Ralph Mucerino and John Bruce Tracey write that insurers should adopt a Ritz Carlton sort of mindset toward service. We won't get all the way there. Insurance is too different a business. But we can make a lot of progress.