Customer is key
Gaining and retaining customers is as important today as it ever has been. Milan Korcok looks at some of the ways – and the reasons why – the global travel insurance and related industries are keenly focussing their attention on developing their customer service strategies
First published in ITIJ 136, May 2012
Gaining and retaining customers is as important today as it ever has been. Milan Korcok looks at some of the ways – and the reasons why – the global travel insurance and related industries are keenly focussing their attention on developing their customer service strategies
Let’s face it: health insurance, for travellers or expatriates, is not a sexy product. Most people would rather not deal with it. It’s something you HAVE to have, not WANT to have. It’s not warm and cuddly. It’s not the stuff of dinner table conversation. Composers don’t rhapsodize over it. So how do you get customers to look at your product, consider it, make it a part of their lives? How do you develop relationships with them that will keep them coming back after you make the first sale? How do you develop loyalty about a product they possibly will never use and don’t really understand even if they could read ‘the instructions’?
Starter for ten
In an increasingly competitive and diversifying market, international health insurers serving tourists, expatriates, students, wealthy wanderers, missionaries, recently-arrived immigrants, and business people posted abroad must respond to customer sensitivities and needs. But given the nature of their products, it’s not easy – either in the travel insurance, or international private medical insurance (IPMI) sectors.
At the 2011 International Travel Insurance Conference (ITIC) in Lisbon, Rochelle Turner, head of research at Which? Travel (the travel publication of the UK’s consumer association), reported that Which? surveys have shown that the travel insurance industry generally scores low in consumer trust, that two-thirds of people surveyed find it difficult to accurately compare differences in policies from different insurers; and she concluded that the industry should strive to ease the way for customers to find the right cover for themselves. She added that of those surveyed, 83 per cent who bought travel insurance policies had the perception that they were covered for anything that happened from the moment they left their house.
Similar surveys carried out in other countries have shown that customers don’t understand travel insurance – with its restrictions and exclusions; and that they don’t have the time or the patience to take seminars to wade through fine print crafted to protect the insurer. They want to be covered, period. And they trust that when the agent who sold them the policy says ‘You’re covered’, they really are covered. But it doesn’t always turn out that way.
the relationship with a client should be for life and the insurer should constantly be nourishing the relationship
Also speaking in Lisbon, Robin Ingle, CEO of Ingle International, a Canadian broker of international insurance products, emphasised that insurers need to educate consumers so their expectations are more realistic and consistent with the products they are buying. Citing a need for travel insurance products to become more user-friendly and trustworthy, he said: “Co-operation between the various components of this sequence of services is key – between the insurer, customer, distributor, and healthcare provider. Insurers need to provide clear wording. Healthcare providers need to provide the right treatment, price, and communicate with insurers. Distributors can’t expect to get 30 to 50 per cent of the premiums in commissions and not take responsibility for educating customers.”
He said the customer gets more confused as the policy wording becomes more complex and harder to understand. As a result, he added, their expectations aren’t met, they want to complain, threaten legal action, and have regulators impose rules on insurers. And when they do complain, the results can be ugly.
Long-term investment
In March, CBC’s top-rated consumer advocacy television show aired a major segment about a British Columbia senior couple whose medical claim during a trip to the US was denied by Manulife for, as the show’s host characterised it, a few small mistakes on a medical underwriting application that was so complicated no reasonable senior could be expected to get it right. Despite the fact the same questionnaire
was routinely completed by senior applicants every day, millions of Canadian viewers were left with an impression of travel insurance as something to be approached with great caution, if not avoided altogether. Against such a backdrop, how does a customer develop a relationship with an insurer, or invest trust and confidence in the person or company selling insurance, or feel secure knowing that the services paid for will be there when and where they are needed?
Jim Krampen, CEO of Seven Corners, a US provider of travel and international medical insurance products tells ITIJ: “Insurance is an intangible product people pay a lot of money for and hope they never have to use. It’s a promise. The only way you can make your customer feel satisfied and comfortable is with service.” He says that most companies offer their services from the effective date of the policy to its expiration: that may be for short, episodic travel like 10 to 15-day leisure trips, or it may be for the longer term. “But service should be extended after the expiration date,” says Krampen, “so that the next time they have a need for your product they will purchase from you.”
He insists the relationship with a client should be for life and the insurer should constantly be nourishing the relationship: “You should always be serving the customer, even when they’re not your customer … when they are not covered.” As an example, he notes that Seven Corners offers a freely accessible website titled WellAbroad, which offers real-time travel news, warnings, and emergency health information, precisely to keep former customers connected and allow them to stay in touch with the market. “Offer them a free service,” he says. “Never have the client go away.”
Retaining customers over the long term, keeping their loyalty and repeat business is essential in this increasingly competitive and price conscious market, encumbered as it is by an unstable world economy. Constantly mining new customers and disregarding the old is a recipe for failure.
There are, however, differences in the attitudes and needs of short-term leisure travellers who enter and exit the insurance market episodically – for week-long trips to the Caribbean or five-month vigils in Spain – and expatriates, or students, who spend more time abroad than at ‘home’, who de facto ‘live’ in foreign countries for extended, but continuous periods. For the most part, short-term travellers still retain their comprehensive domestic health insurance, which provides their safety net. They go to the travel insurance market to supplement what their domestic insurance won’t cover.
Longer term or permanent expatriates, students, immigrants transitioning from one healthcare system to another, and business professionals posted abroad need more than a top-up to their government or employer funded insurance. They need a fundamental restructure of their health insurance to cover them from the ground up, in many cases.
Constantly mining new customers and disregarding the old is a recipe for failure
The relationships and interactions between customers needing travel insurance and those being fitted out for IPMI products will necessarily differ, as will the service demands. But the fundamental need for confidence and trust, for maintaining a relationship, remains. Ida Berg Schaldemose, head of corporate development for Denmark-based ihi Bupa, is a firm believer in the need to create lifetime relationships with consumers, or, in the case of ihi Bupa, ‘members’, since it is a mutual insurance company. She tells ITIJ that loyalty is about the long-term and must benefit both the company and the customer.
With increasing competition, the challenge today, says Berg Schaldemose, is to keep believing ‘that long-term value is more (important) for the customer and for us than short-term price competition where you might have quick wins, but lose out in the long-term because you leave customers with no cover’. “I believe, as a company, you have to decide whether you are in a market for life, for the short-term, or for as long as you can make money,” she says.
One of the key elements in ihi Bupa’s success in retaining the loyalty of its members, says Berg Schaldemose, lies in its organisational structure – what she describes as ‘end-to-end’: encompassing risk ownership (underwriting), product creation, development and marketing, customer enrollment, claims control and renewals. In effect, ihi Bupa keeps everything under one roof; a strategy growing among international medical as well as some travel insurers.
In-house adjustments
Ihi Bupa’s cohesive approach allows a flexibility of action when needed, explains Berg Schaldemose, such as when a customer with an emergency calls the in-house 24/7 emergency assistance service. “They call us … That’s the moment of truth … That is not outsourced,” she emphasised.
William Russell Ltd, a UK-based provider of international health, life and income protection for expatriates, is a family-run operation that is also predicated on maintaining total control of operations and services to clients under one roof. Managing director Inez Cooper says: “We always encourage clients to get in direct contact, and not just when they need to make a claim. Because international medical insurance represents such an important purchase, the client needs to feel certain that the plan they select will provide all the cover they need, thus the vast majority of expatriates choose to speak to an advisor, even before they complete their purchase.” The company has even rejected a telephone call centre approach in favour of direct contact, which may seem like retro engineering, but more and more insurers are eschewing the phone tree and call centre and are turning to direct calling as a means of injecting some humanity into a relationship they would like to make more personal. Cooper tells ITIJ: “We think people are becoming increasingly frustrated with having to communicate with a telephone keypad rather than a person, so instead we have an in-house team of advisors. When a client calls us, they can be put straight through to the person they want to talk to.”
Whether this highly personal approach could work in large-volume companies may be questionable, but it illustrates the value of being able to keep in touch with clients around the globe who may be in strange, challenging, perhaps even alien environments with needs they never anticipated. In such situations, off- the-rack responses may not help. They need bespoke care.
In the past, many providers of international health insurance products, especially travel insurers, have operated with a fragmented model – product creation at one point, risk underwriting another, product administration and sales another, emergency assistance and evacuation at another, claims and cost containment yet another. They were cogs: sometimes co-ordinated, sometimes not. But they were not seamless. Demands for better service by a public that has an increasing number of choices may change that.
Rob Upton, director of claims management and emergency medical assistance for CEGA Group Services in the UK, tells ITIJ: “Putting claims and assistance services (including air ambulance) under one roof and unifying case management can help a customer feel valued and cared for right from the start. It can enable him or her to access specialist help and advice – be it medical, loss or travel-related – through a single point, whilst also reducing the need for repetition, giving continuity of care and accelerating claim resolution times.”
Certainly, this helps case management, he says, ‘especially if technology can be harnessed to access a single, instant view of (the client’s) claims and assistance history … (and) real-time medical notes’. Upton adds: “Above all, a customer making a claim on their travel or international medical insurance policy will be facing an emergency abroad and will need to feel supported in every way: be that with a rapid and appropriate response to their situation, a knowledge of their claims history or a sympathetic understanding of their unique predicament.” He concludes: “It will be the attention to detail that will win their loyalty.”
Meeting expectations
A crucial element in the client/insurer relationship is the point of sale. How does a customer know what to buy; what is best for them? As Rochelle Turner told ITIC delegates last year, 83 per cent of surveyed respondents had the perception that their travel insurance covered them for anything that happened from the moment they left their house. That’s an unfortunate expectation, but the brochures and advertisements used to pitch different products do little to dissuade them. Images of carefree young families frolicking under the palms, or silver-haired couples meditating in Nepal appear to be effective in attracting attention. But they also create expectations, and the fine print hiding under these glossy images sometimes stands in the way of these expectations being met.
As Robin Ingle revealed at ITIC, ‘distributors can’t expect to get 30 to 50 per cent of the premiums in commissions and not take responsibility for educating customers’. But do distributors do enough to help customers understand the product? Do they educate them? Do they provide them a service? Do they draw enough attention to what policies do not cover?
Underneath the sales pitches and glossy images, most products in given markets are pretty well the same. They may have a few perks for specific sub-markets such as for snowbirds, or young families, or frequent travellers, but essentially they are the same. And though the premium prices may vary slightly here or there, they are not going to outrun their risk factor.
loyalty is about the long-term and must benefit both the company and the customer
Whether customers get their information from old-fashioned brochures, or agents, or online sites, or via tweets, what bedevils them, as Turner reported in her survey, is the difficulty of actually being able to compare a set of benefits and exclusions and limitations from one plan to those of another. It would seem simple enough. But though they both use legal jargon, they don’t use the same lawyers and each write and interpret the rules in their own way.
When a definition of a stable condition means one thing in policy A, and another in policy B, what’s the point of comparing prices between the two? And in the US and Canada, plain language appears not to be allowed. Fortunately, the Brits are more comfortable with the language and most UK policies are relatively user- friendly by comparison.
In Canada, where travel insurance is sold primarily for its medical benefits, there are no standardised definitions even for terms as common as ‘pre-existing condition’, even though that is the single most frequent cause of claim denials. If a customer with a pre-existing condition were to peruse policies from five of the major producers of travel insurance, he or she would come up with five different definitions, each of which may differentially affect that patient’s application, or in a worst case scenario, claim status. In effect, they’re not just different placements of a comma, they differ in intent. The same can be said for medical applications and medical underwriting submissions.
The personal touch
Increasingly, travellers are turning to new technologies to shop for insurance. They don’t have time to visit an agent personally so they apply by phone, which insurers and brokers encourage rather than losing a sale. And they turn more and more to cyber surrogates – online applications and even social media transactions – totally devoid of any direct human encounter.
Jim Krampen, of Seven Corners, offers 21 different programmes for his clients and he admits that it is possible to buy a policy designed to cover the applicant for full coverage – medical as well as trip re-arrangement contingencies, and never talk to a person. So, how do you develop a relationship with somebody you don’t talk to?
Krampen says there are many people who just don’t want to talk. “The younger they are,” he says, “the less they want to talk.” For them, he says, his firm provides a ‘chat’ facility so they can ask their questions in perfect solitude and with complete anonymity.
With new technologies based on anonymity intervening in the relationship between insurers and customers, the nature of service, customer satisfaction, personal relationships and trust may well be changed. Will it be for the better? And how will it be measured?
Ida Berg Schaldemose comments that at ihi Bupa, loyalty is about solutions and not product, about relationships and not transactions: “We measure loyalty not by annual customer satisfaction surveys, but with one simple question: Would you recommend us?” Maybe that will still remain.