Let’s have a moment of silence for life and health insurers who do not listen.
We are all familiar with this dying breed: complacent carriers that seem more concerned with risk management than communication, with profit margins than people. The result is predictable: businesses that slowly bleed, one missed application opportunity or lost renewal at a time.
I consider myself blessed to have begun my career in life insurance in India. From my earliest days, I have been surrounded by great managers and mentors who helped me learn to listen to customers. About 20 years ago, a time when national and international phone calls were very expensive, my manager noticed me making such calls to our offices and commented, “Keep in mind that this is widow’s money.” Every policy that lapsed, and every claim that was repudiated, was subjected to intense scrutiny by this same manager, who always asked, “Are we being fair?” I learned an important lesson in treating the customer as a person, and not just a policy number.
Effective listening is not a passive activity. In life insurance – or any business, for that matter – listening is a discipline that requires actively engaging and evaluating the information we receive from customers, endeavoring to truly understand what they are saying – and not saying. It requires carriers to continually prioritize customer preferences, draw inspiration from feedback, and even anticipate demand and offer products and services customers didn't even know they needed.
Few businesses will freely admit to not listening to the customer, of course, and most life insurers will claim to “put the customer first.” The evidence suggests otherwise. Too many carriers still lack the infrastructure and incentives to effectively respond to rapidly changing customer needs and rising expectations. It is no surprise to me that one of RGA’s most popular services is the “Voice of the Customer” market research session, during which insurer clients work with RGA India’s team to develop insights into customer needs and use this intelligence to shape product development strategies. We have conducted exercises for critical illness and health insurance products and recently concluded another session involving more than 500 customers and two technology companies on tele-underwriting.
Listening to the customer is made doubly difficult by the way the human brain works. When someone speaks, the brain immediately begins processing the use of language, inflection, and perceived meanings. Rather than hearing one noise, we hear two: the noise of a voice and the noise in our own minds. I suggest something similar occurs in organizations. Companies miss the signal of the customer’s voice amid all the distracting noise of pre-existing assumptions, growing cost pressures, and high sales targets. Like individuals, institutions hear – but do not listen – to their own surveys, focus groups, and data analytics.
For proof, only consider the numerous industry discussions on why life insurance must “be sold and not bought.” We have all heard the so-called reasons for falling sales: “It is a fatalistic society and people do not want to think about death”… or … “Only savings or investment-linked life insurance products can be sold in our market.” Such common perceptions continue to prevent Indian carriers from moving into new product lines and expanding market share.
With a little effort, it is not difficult to dispel these myths. For example, when I led the India offices of a large insurer, I chatted over a cup of tea with a bright colleague, and together we arrived at the idea to introduce the first online term insurance in India. As part of our product launch, we pledged to spend every day listening to customers and build the product around what we learned. All employees, irrespective of their positions or departments, agreed to go out every month to meet customers. One enterprising employee created a WhatsApp group called “Selfie with Customers,” and very soon every employee was posting photographs of themselves with the customers they met (with permission, of course).
The employees, individually or in groups, met all types of customers, including those whose policies were continuing, lapsed, or surrendered, as well as those with grievances. The telling moment came when an employee visited the house of a claimant and shared the emotional experience at a town hall meeting, recalling how the claim amount from the term policy would help alleviate the family’s deep financial distress. The entire organization benefited from understanding the motivations, needs, and wants of customers, and applied that knowledge to structure more personalized online insurance solutions.
In the U.S. LIMRA research suggests that 19 million potential life insurance buyers become “stuck shoppers” – they intend to buy life coverage but find the purchasing process too confusing or onerous. In India, research by LexisNexis Risk Solutions found similar attitudes to the insurance buying experience: 23% of consumers said the application process was difficult and 29% reported that policies were too difficult to understand. To understand the scale of our missed opportunity, consider that up to 988 million Indians, or three-quarters of the nation’s population, lack any form of life insurance, according to according to a report by IndiaSpend, a public interest research initiative.
Innovators and disruptors in the insurance space argue that insurance can in fact be a “bought” product, if only carriers more effectively cultivated demand and created a superior customer experience. Indeed, many of these forward-thinking market entrants are gaining inroads on established insurers in India. It’s past time to put aside tired paradigms and overused excuses. We need to stop talking at and start listening to life insurance customers. Only then can insurers in India – and around the world – fulfill our important role in moving society forward.