December 13, 2010 by Joe Micallef
The insurance business in Canada has undergone significant shifts in recent years–the result of an evolving marketplace, economic upheaval and the introduction of new industry regulations. Yet despite these changes, certain imperatives remain constant: the need for the industry to grow, provide innovative solutions, and meet the demands of clients in an increasingly competitive environment.
Insurance industry players with access to any number of customer satisfaction surveys over the past few years will have noticed a shift taking place. Whereas price and rates were once the main driver of sales and repeat business, now the differentiator is service. As the cost variance from one company to another has narrowed, the public has decided it wants to do business with an active partner, rather than passive supplier.
Not everyone is getting the message, though. Some insurance companies still operate on a product model rather than a service focus. That is, they present their clients with a list of products, but don’t take a leadership role in providing strategic guidance as to how the various services can most effectively meet their needs.
The clear question here is: how does a service-oriented business model work in practice?
Macquarie Premium Funding’s experience in other jurisdictions may provide some lessons on helping others in the insurance industry succeed in the Canadian marketplace.
Step One: Listen
Listening needn’t involve expensive and time-consuming surveys. For example, Macquarie Premium Funding approached the task by having the company’s business development managers directly ask its brokerage customers what they wanted and needed. Naturally, this varied depending on whether the broker was independent or part of a national insurance house, the broker’s client base, geographic location, and other factors.
What Macquarie found was that despite these differences, there were two major themes common to everyone. First, brokers want to structure their business in a way that drives down costs, captures more revenue and carves out more profit. Second, they know they have to beat the competition by constantly improving their service levels.
Step Two: Act
Once armed with better intelligence about your customer base, the time comes to take action. With the feedback from Macquarie’s market surveillance, the company made immediate plans to adjust its service offering. The first change was to modify the sales support process in order to get a better idea right from the start as to how its brokerage partners want to be serviced.
Macquarie Premium Payments (MPP) provides a global example of the strategy in action. This service, developed by Macquarie Bank and Ebix Australia, is a software module designed to automatically reconcile payment of invoices through a daily batch download with the purpose of enabling brokers to free up staff, cut costs, reduce risk, and offer a broader range of payment options to their clients. It was specifically designed to be suitable for any size of firm, based on the understanding that all brokerages would benefit from this seamless and significant step forward in payment management.
The service largely eliminates the tedious task of banking and reconciliation, so it helps brokers focus on other priorities, like business development or client service. Brokers using the service report that their greatest relief is the sharp reduction in the volume of inbound telephone calls related to payments. That’s because the solution also works from a client perspective: MPP enables clients to choose online, telephone, credit card, or in-person payments–it makes their lives easier, too.
The best examples of service innovation demonstrate how customized solutions can help all sides win–brokers get ahead of their competitors by delivering a better service to clients and reducing their own administrative burden, while clients get more flexibility in the insurance products they select. The end result is a satisfied client on each end–whether it’s the broker or an insurance consumer.
Joe Micallef is Chief Executive Officer and Head of Sales at Macquarie Premium Funding Canada. He has over 14 years of experience working within the Macquarie Relationship Banking division of Macquarie Group in Australia.
This story was originally published by Canadian Insurance Top Broker.