Many people argue that insurance is not a need. Since we don’t necessarily need this to survive, some would skip buying insurance unless required. But some people recognize the importance of buying insurance and availing themselves of the right policies. They invest in insurance to cover the things they value, including their health, life, and investments. Even if more people are now investing in insurance, that does not necessarily make the job of insurance agents easy.
Insurance companies face a myriad of challenges. We are not simply talking about the usual issues every business faces, like cash flow problems and improving workflow efficiency and customer service. Here are four issues many insurance companies face and ways that can resolve each one.
Errors and Omissions Claims
There are times when insurance agents make mistakes that can dramatically impact their clients’ lives. One can get sued for all sorts of reasons, like the following.
- Administrative Errors. Communication errors, failure to enter the right client information, and failure to provide enough training can lead to a series of administration errors. It is your job to make sure everyone fully understands everything about the insurance products they offer so that they can relay the right message to your clients.
- Failure to procure the correct coverage. Your clients put their trust in your company, thinking you will provide guidance and monitor their insurance policy as you promised. But if something happens, and they end up being responsible for the financial damages, they can sue you for failure to protect their financial health.
- Failure to update clients with policy changes. Insurance agents are required to share policy changes with their clients through a series of notices. If you failed to do this and their ability to make a claim was impacted by such action, they can sue you and claim for the damages caused.
While there is no single formula to protect your insurance company against future lawsuits, you can invest in your own insurance to better protect your brand. For example, errors and omissions (E&O) insurance can help protect your company against costly lawsuits. The cost of E&O insurance for insurance companies and their agents can be a good investment, especially if you are working with new agents.
The Public’s Lack of Trust and Understanding
Insurance may help consumers protect their financial health. But many people still don’t trust insurance companies. As a result, some clients remain badly informed of their insurance policies, while others feel they received a bad insurance deal from their insurer.
Many people fear that some insurance agents are only after their own best interest instead of their client’s interest. They know that most insurance agents get paid on commission. Others feel like they won’t be getting what they will be paying for when they come to make a claim.
Don’t forget the contribution of media in projecting negative perceptions among insurance companies. Since negative stories sell more, they try to focus on the rare cases where insurance companies and their agents will surely get a bad reputation.
It is crucial that insurance companies focus on improving their communication skills to provide the public with a better understanding of what they have to offer. For example, using clear and simple language to explain policy terms and coverage will make it easier for people to understand their policies. It also helps that insurance agents be more transparent, so they can start rebuilding the public’s trust.
A Large Amount of Competition
Today’s market is never short of insurance companies offering the same services. However, when it comes to consumers wanting to avail themselves of insurance, they would rather go for existing insurance companies than put their trust in newer businesses. This is since they already managed to establish a reputation and a customer base that trusts their services.
Luckily, there are things you can do to stay on the game. You can use the following tactics for your insurance company to stay competitive.
Today’s consumers are more tech-driven than the past generation. Therefore, it is crucial that you use it as your strength in acquiring clients. Aside from offering innovative products and services, be sure to use technology to cater to their needs and offer a better premium to suit their needs.
Treat Existing Clients Better
Many businesses would prioritize client acquisition over retention. If you don’t reward loyalty, your existing customers will likely find another company who will treat them better. Always follow suit and prioritize your old customers to keep their loyalty and trust.
Use newer and better technology to reach out to your clients and answer their concerns. The faster you address client problems and concerns, the better their experience will be. This is enough to trust your brand more and recommend your products to their network.
Running an insurance company is challenging enough. The changing landscape only adds a new set of challenges that will test your company’s resilience. Exploring the possible challenges you may face will make it easier for you to prepare and avoid such issues from hurting your brand.