Insurance head honcho tackles customer treatment
Cedric Stephens, Contributor
I will use today's column to discuss an email that I received from the head of an insurance company. The message he conveys is of importance to insurance consumers, his company's customers and to the insurance market as a whole, even though we agreed that I would not to disclose his identity or the name of the company that he leads.
There are two things that I particularly like about the information that is shared.
The first is that the board of directors and top management of the company recognise that there is a need to improve the company's claims management process in order to enhance the experiences of customers. Nothing happens in a company without the approval of these two important groups. So, with their backing, I suppose, something is bound to happen.
The second thing is that the executive and board members appear to appreciate the need for his company to comply with international best practices. This was one of the key points made in the two-part article, 'Are insurance customers treated fairly?'
Compliance with international standards, he believes, is essential if the company is to continue to earn the trust and confidence of insurance buyers even in the absence of regulatory requirements to do so.
Am I making too big a deal about an email that I received from an insurance company CEO? I am not. This is the first time since I have been writing this column in nearly 18 years that the head of a major insurance company has written to me along these lines.
Further, if some of us in this country are demanding the world-class standards in cars, computers, smartphones and television sets, to name a few things, shouldn't the service providers in the insurance sector be following those examples?
CEO EMAIL EXCERPTS
He wrote: "It slips many of us as an industry and, internally in my organisation, that there is a need to enhance customer service especially as it relates to claims management. The fact is that we are not selling policies but peace of mind with our claims management service. This is a focus of our organisation, sponsored strongly by our board.
"With changes being a constant, we will be restructuring our claims management service over the next six months to ensure greater compliance with international best practices.
"As we note the error in the recent execution of our claims service as it relates to the file recently referred to, the appropriate actions are being taken to rectify such occurrences ... much of this behaviour is embedded in the training of adjusters in the industry, I believe much of such deficiencies are noted at the senior ranks, with investments being made to rectify.
"I hope in time not to see such articles being necessary regarding the industry, but in the meanwhile, our organisation will be working towards making such a reality."
The invitation that triggered the CEO's email read as follows: "I wish to reiterate my invitation to you. I would welcome your written comments about my article generally as well as comments on those parts of it with which you or your company disagree. I will undertake to publish what you write without making any editorial changes or without mentioning the name of your company - as is the norm .... It would therefore be unfair of me not to give you or your company the opportunity to challenge or question and or criticise premise of things that I write about. I look forward to hearing from you."
The CEO has estimated that the company's claims service will be revamped over the course of the next six months. I am very happy to hear this even though I believe that he has seriously underestimated the length of time it will take.
The insurance core principles of the International Association of Insurance Supervisors (IAIS) is, I believe, a very good place to start. I do not accept the argument about the training of loss adjusters for the reason that insurers pay them and therefore can directly influence how they behave.
The IAIS best practices recognise this. It says that "adjusters should be able to make recommendations independent of insurers' instructions on individual claims". Matters such as competence, technical and legal expertise and qualifications of the persons involved in the claims process are also discussed in the standards.
I am very pleased that the CEO decided to respond to my invitation, and with the contents of the response.
I look forward to learning more about the specifics of the revamping exercise after it becomes operational in July or August of this year. As the saying goes: The proof of the pudding will be in the eating!
Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: firstname.lastname@example.org