Why I Hate My New Insurance Company

I recently went through the process of getting a new individual life insurance policy, something that’s done thousands of times a day across the country.  My experience is a cautionary tale for leaders of insurance companies everywhere.  When the process was finally complete, and I signed the last policy document, I wrote beneath my signature, “P.S.  I hate you!”

If you like consumer frustration stories, read on and you’ll be entertained.  If you are in the insurance business, you definitely want to read my tale of woe as I also lay out how to easily delight customers and earn superior profits.

Life insurance is a very competitive market, thanks to the internet.  I started my search for a new policy on an insurance website that gave me quotes from multiple brokers.  The quotes included the insurance company name, their financial rating, and the annual premium I’d need to pay for the policy.  Like many others, I am now skeptical of financial rating companies as they appear to be at the heart of the whole sub-prime lending debacle.  That means I put little weight on financial ratings to help me make a safer purchase.  With no information other than price left to help me choose, I picked the lowest cost option after weeding out truly low rated companies.

Competing on price only works if you’re the low cost provider, so it is generally not a good path to profits.  Look no further than Apple for proof.  They didn’t amass a cash hoard of $76B by competing on price.  Apple uses their products, stores, and Genius Bar service to differentiate the entire customer experience.  This makes price comparison secondary… and arguably impossible.  If only an insurance company would think this way.

Here’s why I hate my new insurance company, in a nutshell.

  • The “3-4 week” process I was told to expect took more than twice as long
  • Everything was done in hand on paper forms; there were no options for electronic entry
  • I was asked to submit the same information by different people on more than one occasion
  • On my many calls to check on status, I was always told, “we’re just about done!

Given their performance to date, I’m certainly not going to recommend this company to anyone.  I’m also keeping EVERY piece of documentation to prove my coverage because, should my family ever need to claim the proceeds (heaven forbid), I predict an equal if not greater debacle.  The only thing that keeps me from switching is that I have no indication other insurance companies are any better.

There.  I feel better for getting that all out.  Now here’s a vision for how I could come out of this process absolutely delighted, happily paying a price premium, and eagerly recommending my new insurance company to everyone.

  • My quote comes with a link to start an on-line application process
  • I can upload required documents during the application process and verify they have been received
  • If additional information is ever required, I’m contacted via the method I request (no more voice mail tag!)
  • I can check on the status of my application at any time and see clearly what steps are left and if anything is required from me
  • I’m shown a graph that compares the time it’s taking to complete my application to the average for people like me so I have an indication if something might be wrong
  • What’s promised to take 3-4 weeks takes that, if not less

What I’m describing can’t just be window dressing.  It has to be an external view of a well-run internal process.  Not only would it delight me, allowing me to feel happy paying a price premium, it would lead to lower costs.  (For example, the company wouldn’t need to hire that extra person to call me for the same information the last person called me about.)  That’s two ways to increase profits in a price competitive business.

For anyone about to embark on a similar insurance quest, there’s some hope.  The new Information Week 500 list just came out.   This is a list of the 500 most innovative business information technology organizations.  There are 42 insurance companies on the list.  The CIOs of these businesses focus on using IT to improve the customer experience, not just back office operations.  In fact, in 30% of the companies on the list, the CIO has formal responsibility for innovation, a number that’s grown substantially in the past few years.

To CIOs, both those on and off the IW500 list, I want you to know that Appian’s ready to support your drive for innovation and improving the customer experience.  My “dream” insurance scenario above could be enabled quickly through Appian’s BPM software, including social collaboration and mobile process participation for even greater speed and customer delight.  Many insurance companies are already realizing this.  Our base of insurance clients is growing rapidly and we’re proud to count Crawford & Company, a member of the IW 500 list, as a client.

So, to insurance companies everywhere, I ask which one of you is ready to let Appian enhance your processes, give you a source of competitive advantage, and help you start piling up profits?  You’ll even delight me in the process.

Evan McDonnell

Vice President of Solutions