Handling Customer Complaints

A customer’s case against an insurer may not always be valid. The legal entitlement to payment of a claim or an argument over the validity of a notice of cancellation are two examples of common disputes under a policy. Effective customer complaint handling is not just about rights or positions. It has more to do with responding to interests. Unlike positions or rights that are governed by the objective criteria of rules, regulations and contractual terms and conditions, interests belong to the customer – the insurance consumer.

These interests may extend beyond the substantive issues arising from a policy of insurance and are influenced by the customer’s perceptions of the insurance office or financial institution with which they are dealing. Perceptions are subjective and are inextricably linked to a sense of being treated fairly, responded to quickly and, most importantly, being heard. Examples of communication from an insurer that create poor perceptions vary from lack of clarity in explaining the grounds for declining a claim to improper use of voice tone, pitch or volume on the telephone to poorly worded, ambiguous correspondence.

NOT LISTENING

One of the most problematic issues is the perception by consumers that the people they register their complaint with are hearing them but not actively listening. Insurance officials may see their role as simply a requirement to properly communicate and explain policy terms and exclusions in a clear and diplomatic manner. That, of course, is the traditional positional approach and, whilst it may work in some cases, more often than not, it will only serve to increase anger or frustration. This frustration is expressed in different ways: angry, time wasting letters and calls to managers and other higher ups, expensive and often frivolous litigation and/or cancellation of business and bad publicity. This, in turn, may create a poor company image to consumers and low morale amongst staff members who may have to respond to frequent, unpleasant and time consuming complaints, which encroach on their other work duties and accountabilities.

INTEREST APPROACH

On the other hand, an interest-based approach embraces a balance of assertiveness and cooperativeness, otherwise known as integrative orientation. An interest-based approach to complaint handling is not just about hearing the insurance consumer and what they have to say in a given instance, but rather, getting the message across in a way that leaves them feeling that they have been heard. The latter is a subtle, but very important, difference. If applied effectively, it has the power to take the “sting” out of the complaint and reduce the level of tension and conflict in a given situation. This sets the stage and clears the way for dealing with the more substantive issues under a positional approach.

Customer complaints are a fact of life in this “people industry” and plague even the most conscientious, customer focused insurance companies, agents, brokers or independent adjusting offices. The source of a complaint often extends beyond consumers and includes staff, contractors, suppliers, markets and anyone you do business with.

INTERNAL OMBUDSMAN

Initiating a complaints response program (CRP), which includes the appointment of an internal ombudsman, tackles the issue of complaints head-on, and sends a clear message to everyone that the complaint will be heard. It also allows an insurance business to control, focus and channel complaints through a properly designed mechanism that is in sync with its everyday flow of business activities.

There is a myth that advertising a CRP is “asking for trouble”. In fact, the opposite is true. With such a program in place, the customer is more likely to cooperate by dealing with the department where the problem originated, knowing that the matter can be taken to an independent higher level if the matter is not resolved at source. Staff morale is also boosted because they have the initiative, opportunity and satisfaction to handle their own complaints without interference from management.

OMBUDSMAN ROLE

The ombudsman is an example of that “higher level”. An ombudsman is trained and appointed as the internal neutral in any organization, large or small, whether part time or full time and often, in conjunction with other duties. The term “ombudsman” comes from an old Norse word meaning the “king’s man,” one dispatched to investigate complaints against the government. Over the years, “ombudsman” has been redefined to refer to individuals who check out concerns and complaints and help resolve them.

The ombudsman investigates complaints from a fresh perspective, removed from the politics and attachments of the parties or department involved. The ombudsman is typically trained to be a skilled active listener, assertive speaker and, when necessary, a mediator. He or she has the power to make decisions or recommendations, reporting directly to the president of the insurance organization involved, whether this is an insurance company, brokerage or adjusting company. Quite often, the resolution of the complaint will create a learning experience that results in changes in company policies and procedures. Healthy businesses treat so called “bad experiences” as catalysts for positive change.

The ombudsman must be an effective communicator and understands how best to approach different individuals. As a complaint response program is most effective through an integrative, interest based approach, an understanding of different personality styles and the way each style functions best is an important asset to resolving disputes. Knowing the needs and stressors for each person’s style is an important resource and tool for seeking cooperation and achieving positive results.

LOST GROUND

In my experience, the insurance industry is behind other sectors in customer complaint handling dynamics yet, outside of the banking community, it is the sector in which it is most needed. If you visit any bank website, you will find reference to different models of complaint handling and ombudsman procedures.

A CRP, if properly implemented, brings substantial, but often hard-to-quantify, benefits to business: greater customer satisfaction, enhanced levels of customer service, increased staff morale, more effective team work, less waste of management and staff time, avoidance of costly disputes and litigation and heightened overall corporate image.