Connecting with Consumers

Provide information, leaven it with consistent follow-ups and then throw in a
little empathy and you have a recipe for good customer service

By Sally Praskey

It’s a familiar litany. Insurers, faced with
skyrocketing claims costs, meager investment returns and a growing incidence of fraud, are
responding by raising premiums and tightening underwriting requirements. Consumers, for
their part, are reacting with anger, frustration, and bewilderment. As usual, the main culprit is auto.

While rates are up across virtually all lines of business
— particularly commercial property post-Sept. 11 — it is auto that dominates the scene
for consumers and industry alike in most provinces.

As Don Forgeron, Atlantic vice-president of the Insurance
Bureau of Canada (IBC), puts it: “The three biggest issues, for the IBC at least and
Atlantic Canada for the coming year, are auto insurance, auto insurance, and auto
insurance.” The IBC has called for a comprehensive review of auto insurance reform
for those provinces, a process that has already begun in Newfoundland and Labrador.

The IBC is lobbying for a form of no-fault insurance that
would restrict the amount that could be claimed for pain and suffering for minor injuries.
Not surprisingly, the lawyers have mounted their own opposition campaign. Consumers,
caught somewhere in the middle, agree that premiums are too high but they don’t want
to give up their right to sue for pain and suffering.

According to a poll done by Corporate Research Associates
and reported in The Globe and Mail, 58 per cent of 801 people questioned
said they wanted to keep the right to sue for pain and suffering and minor injuries even
if their premiums were to keep rising. Most are – understandably — just plain
confused by the whole affair.

Case in point: Robert Sexty, Newfoundland provincial
president for the Consumers’ Association of Canada (CAC), declined to comment, citing
a “lack of expertise to assess the issue in terms of what is best for consumers.”
Other CAC Atlantic-area representatives did not respond at all to requests for interviews.

Auto insurance reform presents a huge communications
challenge that few other issues pose, admits Forgeron. “You have to take consumers
from a position of not really knowing much about auto insurance to a position where they
understand the current model and what’s wrong it, and then you’ve got to get
them to understand the whole range of options that are available for how to deal with that.”

So far, he says, there has been a broad cross-section of consumer reaction, “so
it’s difficult to gauge where the public is.” A poll will be taken later this spring.

Meanwhile, on the west coast, auto insurance also grabs the
spotlight but in a more positive vein. As Dennis Prouse explains, “there are two
[consumer] issues: What we currently deal with and the elephant in the room” –
in other words, the government’s proposed move to private auto.

“The ebb and flow of our day-to-day calls kind of
pales in comparison to the looming changes in B.C. auto, i.e., bringing in competition and
choice and eliminating the government-controlled monopoly,” says Prouse, government
relations manager for IBC’s British Columbia and Yukon regional office.

So far, he says, there have been more questions from the
media than from consumers about the proposed change, but there is an “overwhelming
sense that people want this to happen” and “how that unfolds is going to be the
dominant story line of 2002 out here.”

Prouse expects the government to provide more details in
the next few months. “This is positive news for consumers and positive news for
economic freedom, because governments ought not to be in the business of fixing
people’s bumpers,” he says with a chuckle.

Likewise, in Ontario, auto insurance concerns —
specifically, rising premiums and accident-benefit frustrations — are top of mind for Jim
St. John, head of the insurance committee for CAC (Ontario). To keep costs down without
jeopardizing accident benefits, he urges the industry and government to focus on damage to
vehicles rather than to “human bodies.”

For example: Examine the possibility of raising
deductibles, make the direct compensation cover optional rather than mandatory, and review
“whether to allow companies to offer lower premiums to drivers who will agree in
advance to take their car to an insurer-approved repair shop.”

Perhaps surprisingly, Eve Patterson, regional manager, Ontario division, reports
few calls about rate increases — yet — at the Ontario Consumer Information Centre of the IBC.

“We anticipated we’d be getting a fair number of
calls from consumers about increased premiums at renewal and, to date, we are getting some
but not what we expected,” she says. “However, we figure that premium increases
at renewal will be one of the major concerns of consumers.”

Both Patterson and Prouse say many calls come from
consumers seeking information, rather than making complaints.

“One of the major ones we get in claims is people not
understanding the fault determination rules,” she notes. Other common questions,
according to the most recent report from the centre, focus on rights/entitlement with
regard to personal auto claims, and rating of auto policies.

“Since we started the Consumer Centre over 15 years
ago, I find that we have a more educated consumer now,” says Patterson. “The
questions are not the same. But one of the things that people are not always sure of is
what coverages they have and what is available.

“They need some explanation of the coverages that are
provided, whether it be auto or property. You don’t want to have somebody worrying
about the coverage after the claim.”

Consumers also need more clarification as to limits on a
property policy, says Patterson, a comment echoed by Joyce Feinberg, a member of the board
of directors of the Consumers Council of Canada (CCC). While we all know that insureds
rarely look at their policies until they have a claim, Patterson suggests that insurance
representatives at least point out limits for higher-value items when the policy is sold.

“You don’t have to spell out everything,”
she says. “What you need to do is point out where all the information is that they
need to review — policy deductibles, special limits of liability for particular items.
You need to help the individual know where the information is. Then it’s very simple
to say ‘we also have endorsements for XYZ. Do you need any of these?'”

While Feinberg emphasizes that she is not speaking in an
official CCC capacity, she identifies a need for value-added services to help busy
consumers with things like endorsements.

“People may own various items that they might like to
insure through a rider, but companies always ask for appraisals,” she explains.
“I don’t have a clue where to go to get an appraisal, and it probably is a big
hassle to do so. So there are many cases where I don’t insure things like art, where
I might otherwise if it were easy to do.

“I would think it would be in the insurers’
interest to come up with an easy way for people like myself to get riders attached to
cover these items,” perhaps by arranging for an appraiser to come to the home, she suggests.

Nor should insurance representatives underestimate the value of a “high touch”
approach, even if it’s something as simple as picking up the phone.

“It would be nice if the insurance representative were
to call every so often, not just to say hello and be friendly, but to say ‘these are
various things that you could take advantage of’,” says Feinberg, referring to
discounts that consumers may be entitled to but are not necessarily aware of, and changes
in a policyholder’s circumstances that should be reflected in his or her coverage.

And, despite efforts by insurers in recent years to replace
insurance-speak with plain language, Feinberg believes policies are still too difficult to decipher.

“It’s very hard to understand policies and figure
out what is and isn’t covered,” she says. “I think if insurers need a
paragraph of legalese to satisfy the lawyers, then they could have some summaries in plain
language that make it clear to people essentially what your policy covers and doesn’t
cover.” Consumers could then refer to the fine print for details, she adds.

In the end, communicating more effectively with consumers
comes down to upfront education, regular follow-up, and, oftentimes, a sympathetic ear.
Sometimes, disgruntled consumers just need to blow off steam, says Patterson.

“Some of them just want to air their beef and then you
can talk to them,” she points out. “Sometimes, those who are really irritated
can be the best consumers to deal with in the end because they’ve had somebody who
was willing to listen to them and that makes a difference.”

Come July, dissatisfied consumers will have another avenue
of redress with the launch of the National Financial Services OmbudService (NFSO)
established by the five major industries of Canada’s financial services sector —
banks, life and health insurers, property and casualty insurers, investment dealers and
the mutual fund industry.

The new service will provide a central contact point —
through a toll-free phone number and a Web site — and will include independent, impartial
ombudsman services for consumers whose complaints have been dealt with at the company
level and who wish to pursue them further.

“It’s one-stop shopping to resolve consumer
concerns,” says Ann Walker, manager, of corporate communications at the IBC.

But where there are brickbats, there are also bouquets —
like the consumers who call the Information Centre to thank the staff for advice given
five years previously that has, in the long term, saved them large amounts on their premiums, says Patterson.

And like Joyce Feinberg, who, while acknowledging there is
room for improvement in the industry, stresses that she has been completely satisfied with
the way in which her two comprehensive auto claims were handled. “My insurance
company was wonderful,” she enthuses.

Now that’s what you call a consumer connection!

Sally Praskey is editor of the Web
site, a portal for insurance-related information for consumers and professionals.

We’ve Got Mail!

The top 10 p&c topics of concern for consumers on the ConsumerInfo
Web site ( in the past year:

  1. Claims frequency penalties

  2. Request for specialty markets*

  3. Settlements in write-offs

  4. Auto insurance implications in moving to or from Canada

  5. Difficulties obtaining insurance for a rental or seasonal property

  6. Rising rates/the effects of Sept. 11

  7. Career information

  8. Teen driver/occasional driver complications

  9. Water damage claims/disputes

  10. Cancellation/non-renewal of policies (by both consumer and company)

*Our favourite: The entrepreneur who was seeking product liability insurance for a package of
information on how to catch a cheating partner, beginning with the “Pre-relationship Check List” and
leading up to the, er, climax – the sting operation.