An Open Letter to Everyone Writing About “Disrupters” and the Insurance “Customer Experience” and Citing “Industry Experts” and “Top Insurance Executives”
For the love of God, please, please, PLEASE stop comparing buying insurance to buying a consumer product on Amazon!
Case in point from an “industry expert”:
“What’s holding most insurers back from meeting the speed and performance of a customer experience leader like Amazon? In a nutshell, siloed legacy systems.”
No, siloed legacy systems are NOT why the insurance industry doesn’t meet the “customer experience” speed and performance of Amazon. The reason the insurance industry doesn’t meet the “customer experience” provided by Amazon is because WE DON’T SELL WHAT AMAZON SELLS! Amazon sells consumer products. “Insurance” is not a “product.” If you’re compelled to label it, insurance is a process, not a product.
Another case in point from a recent Reuters article that quoted Ajit Jain, Berkshire Hathaway’s “top insurance executive” as saying:
“Amazon.com can deliver something to you in four hours. If people can buy paper towels on the internet, why not insurance?”
Sorry, sir, but buying insurance is NOT the same as buying paper towels. Yes, technology can and should be used to improve the effectiveness and efficiency of the insurance process, but phone apps and “big data” are not going to make a silk purse out of a sow’s ear. (BTW, there are some great silk purse bargains on Amazon right now if you hurry, and the good news is, choosing the wrong one likely won’t bankrupt you, as can happen if you choose the wrong insurance “product.”)
Not every buying transaction can or should be reduced to an Amazon-like “1-click” purchase. If I want to buy paper towels, does Amazon need to ask me to explain what I’m going to use them for? Or who is going to use them? Or where I’m going to use them? Or…? The insurance PROCESS starts with assisting individuals, families, and organizations in identifying their many, and often unique, exposures to financial loss. That information is then used to determine what is the best combination of insurance policy forms and risk management techniques to minimize the likelihood of a serious or even catastrophic financial loss. And if there is a loss occurrence, the process continues in both a financial and emotional way.
“Insurance” is not a commodity product. It’s a regulated, service-oriented process where the “product,” if you will, is a complex, detailed legal contract that is highly litigated. To compare it to paper towels or any other online consumer purchase is infantile. How many bad Amazon purchasing decisions can lead you to financial ruin?
“Technology is a tool and a means to an end, the ‘end’ being protecting individuals, families and organizations from financial catastrophe.”
Why do we listen to and enable people that lack historical perspective and clearly are fundamentally clueless about how the insurance industry works and why it works that way, who really don’t understand the overriding mission of this industry? Technology is a tool and a means to an end, the “end” being protecting individuals, families and organizations from financial catastrophe. Unless it’s the product “disrupters” and consultants are selling…then it’s the end in and of itself. Caveat emptor.
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Bill Wilson
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Love this Bill!
From a reader:
I recently bought a Subaru. The most exciting part was the closing with the manager. His desk was a flat screen. With a touch, the desk top rotated so I could read it. He went through many options which I could accept or reject (I rejected them all) via touch screen. If the option was complex, he touched the screen and a video came up to explain the benefits (a well-crafted, visual, company vetted presentation). All this fed into his sales system which included all my data. I asked more questions about his “docuPAD” system than about the car. He said, “What used to take 40 minutes now takes me only 10 minutes and that makes both the customer and me happy.” Agreed.
It pained me to think auto dealers have better tools than insurance professionals. I felt I was viewing the future of insurance (every company, agent, CSR should have a tool like this). Talk about reducing an E&O exposure! I totally agree with your article Bill!!! We need well trained professionals. I would also say we need to embrace high quality technology to make the process more understandable to clients, and far more efficient. I have no doubt we’ll get there. Insurance professionals must be highly skilled (product knowledge, tech savvy, people skills) and kiss technology on the lips. Amen?
Great article from Don Riggin:
http://insurancethoughtleadership.com/can-we-really-disrupt-insurance-4-ideas/