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40 years in insurance and 20 years specialising in conduct and customer service. Find out more about me. 

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What does the future of insurance look like?

22nd June 2020

What does the future of insurance look like?

I think we are all starting to wonder about the future of insurance. In recent years it has evolved to a point where there is less face-to-face contact and more automation. 

People often buy cover direct without thinking about whether the cover is best for them. So many people rely on the best deal through comparison websites, but, as we know, you have to read the full policy to know what product you are buying.

When I worked for Eagle Star Maidstone in the 1990's, our desks were behind reception but we could be seen by all visitors. People would come in to buy and pay for their insurance. Many would be familiar faces. That doesn't happen any more. Even the high Street broker is less common than it was 20 years ago.

We lost that face to face contact because we wanted to reduce costs and the best way to do that is to take people out of the process. 

Why cheapest doesn't work

Those of us trying to make travel claims or business interruption claims are seeing that cheapest wasn't best. Let's look at why that is.

  • You don't get good advice unless you pay for it. 

Simple fact, an insurance broker who will give you good advice cannot afford to do this if you will only pay £50 for the cover and their advice. These cheap and cheerful products are usually bought without the benefit of advice.

  • A company that keeps costs at the bone is likely to be treating it's customers and staff unfairly. 

This will not lead to a good customer experience. 

  • Cheap cover often means less cover. 

For example, many people will have bought travel insurance and found themselves without cancellation cover should a trip be cancelled due to foreign office advice. As a regular traveler to Turkey, which experienced a near coup some years ago, I always check this cover is included. 

The future

I think we are looking at a future where customers are going to want good value but they are going to to be much more mindful of checking they have the cover they need and looking at how insurers perform in providing service.

We could see a resurgence of the role of brokers. OK they couldn't have predicted the pandemic but they will learn from that and can provide more guidance on the risks to a business and what protection it needs. We are going to hear many stories, over coming months, of businesses that cannot recover. 

People may not remember the detail of how these firm's behaved but they will remember how they made them feel. I remember speaking to a sobbing friend who was at the end of her tether after two months of trying to get an answer from her AXA about her travel claim. I am not insured with AXA (and doubt I will ever want to be) and she told me "what is the point of insurance? I am so tired of trying every day to get an answer". I wanted to go and see her to hug her, sadly not possible at that time due to COVID-19 lockdown.

Doing the right thing and treating people with respect is what people will remember and appreciate. Your culture is key. Once people feel respected, they will respect you and most importantly, trust you and your name.

Author: Sally Pearce (Conduct Matters Ltd)

Sally Pearce started Conduct Matters in 2014 after 35 years working in the insurance industry. She was originally an underwriter, but since 2000 has worked in dispute resolution and helping Insurance firms understand how to treat their customers fairly. Her experience includes working for the Financial Ombudsman, in the Lloyd’s market and dealing with regulators. Sally is ACII, a qualified mediator and yoga teacher. She is also available for public speaking.

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