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Ever wonder why your customers don’t trust you?

Two years ago I wrote on this page that insurance companies have a lot to think about. They face profound disruption. You might think this is for the usual reason – digital technologies – but you would be wrong. Yes, accelerated technological change is shaking every sector up, dramatically; but insurance faces a special problem all of its own making.

That problem, in a word? Trust.

Surveys will repeatedly reveal: the majority of insurance consumers simply do not trust their providers. The trust ratios in global surveys are very low for this industry. And when more than half of your customers simply do not trust what you tell them, you have a serious problem on your hands.

Without trust, customers do not engage and they do not listen; and they are ready to leave you at the first sign that their suspicions were justified. You will only sell them your products if those products are driven by overwhelming fear, or are required by law. Which sounds exactly like the traditional insurer: gather fear-based or legally mandated premiums; then invest those premiums in real estate or stock markets. It’s a game, one which increasingly won’t be tenable.

Where does this lack of trust in insurers come from, though? From the providers themselves, and their observed behaviour. If you have bought a lot of insurance in your lifetime, what is your experience? Are obligations generally upheld, or wriggled out of?

I observed a recent example: an elderly couple had held a local medical insurance product that they had been told would be honoured until the age of eighty-five. They were then suddenly told that due to a policy change, the product would now only cover those younger than seventy-five. Caught between the two ages, the couple were unable to renew the product when it expired.

Please understand: what do you do to the old when you suddenly cut them off from medical insurance? You pretty much deliver a death sentence. Where else will they find insurance at that age, and how will they find the income to pay their own medical bills? The whole idea is to be with one trusted provider who sees you through your life.

In this case the insurer suddenly decided to unilaterally break this contract of trust, and broke it for existing clients – not just new ones. What could be a greater breach of faith?

Sure, this behaviour can be justified in the boardroom: we have to manage risk versus cost; we are losing money on this scheme; we did not break any regulation; we have the right to change the terms, blah, blah. The real point is different. Does conscience ever enter your discussions? Is digging every dollar out of clients the only point of your enterprise? Do concepts like word of honour, commitment and faith ever feature in your business model?

Or, from a hard business perspective: don’t you want deep relationships with your clients? Losing a bit of money staying true to them now and again could reap you much more in future.

This is not an indictment of an entire industry. I know many insurance people who try hard to do good; who feel personal shame at some of the practices happening around them. Some are trying to reform their boardrooms and reposition their brands to stand for truth rather than artifice. Some are even starting their own fresh ventures, powered by new mobile and digital technology and guided by decency and good practice.

At the end of the day, if you are in any business you need to ask yourselves: how big is our deal? What is our purpose, and what do we actually stand for? What lines would we not cross? What would shame us? What would we not want etched on our gravestones?

All businesses need to make money, but making money is not a purpose, it is merely a necessity. It is what you do in order to do more. If you wish to run a better business than mere profiteering, instil some genuine values in it. Values that you can believe in and live by; values that bring some common good to the world; values that your customers can believe are true; values that allow your short life to have genuine impact.

(Sunday Nation, 9 December 2018)

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