Rising volumes of complaints have long been a challenge for insurance firms. The latest FCA complaints data released in October 22 showed that in H1 2022, the insurance and pure protection sector received over 820,000 complaints, signifying an 8% rise from the previous half.

There are many factors that could be causing this latest upturn in customer complaints, but one that’s hard to ignore is the ever-changing shift in customer expectations when it comes to factors such as service, speed of resolution, and convenience.

Nowadays, the customer experience is quickly becoming a key differentiator for businesses across all industry verticals, and insurance is no different. However, the complexity of the insurance industry — with its multitude of products, services, and different approaches to coverage — coupled with its traditionally slow-moving digital transformation has meant that customers have been left feeling neglected.

Why it is important to handle complaints effectively

Enhance customer experience to remain competitive

By improving complaint management, insurers have an opportunity to build trust and loyalty with their customers, leading to increased customer satisfaction and retention. Doing so may also provide a competitive edge in the industry, as customers seek out providers with fast response times and resolutions to their complaints.

Maintaining compliance with regulators

When complaints are not managed effectively, they can lead to costly investigations and even fines for insurance firms. Improving your complaint-handling process can help to reduce the risk of this occurring. With the FCA introducing its new Consumer Duty rules for open products and services in July 2023, it’s never been more important for insurers to ensure their complaint-handling processes are efficient and effective.

Preserve brand reputation

One of the most compelling justifications for improving complaint-handling processes is to protect and preserve your brand’s reputation. Not only can poor handling of customer complaints lead to negative press and reviews, but it can also damage your relationships with other stakeholders, including shareholders, partners, and regulators. Conversely, effectively resolving more customer queries in the front line (at the earliest stage possible) is a great way to demonstrate your commitment to customer service and satisfaction and will likely enhance your brand reputation in the long run.

Improve employee satisfaction and retention

Employees are typically the first point of contact for customer complaints, and if they don’t feel adequately supported when dealing with them, you may lose them. With workplace trends such as the Great Resignation and Quiet Quitting being felt across the industry, it’s more imperative now that you find ways to protect your customer facing staff by equipping them with all the tools, training and support they need to deal with customer complaints effectively.

Cost-saving

Effective complaint handling also brings cost savings to insurers. By preventing complaints from escalating and eliminating the need for additional investigations, insurers can save significant amounts of time, money, and resources.

How to turn customer complaints into loyal brand advocates

As they say, every cloud has a silver lining — and customer complaints are no exception. By turning customers’ negative experiences into positive ones, you can not only retain customers but also turn them into loyal advocates of your brand. Here are some tips for how to do this:

• Upskill your workforce – Make sure your team is equipped to handle customer complaints as effectively as possible by providing them with adequate training and resources. Apprenticeships, eLearning modules, and refresher courses can all be effective ways to ensure your team are up to date with the latest complaint-handling protocols.
• Data and analytical insights – These days, we are blessed with an abundance of data and analytical insights — why not use them to your advantage when it comes to customer complaints? Utilising tools such as speech and text analytics and sentiment/behavioural analysis can help you dig deeper into customer complaints, uncovering valuable insights that can help you improve your complaint-handling process and enhance customer experience.
• Automation of customer service – Automation can be a great way to reduce the time and resources spent handling customer complaints, as well as reducing the risk of human error. Investing in automated solutions such as AI-powered chatbots and virtual assistants drastically improves front-line customer service and free-up human resources to focus on more complex tasks.
• Customer feedback – Actively seek out customer feedback, whether it’s through surveys, online reviews or simply asking customers directly. Giving your customers a voice and implementing interaction analysis techniques will better equip you to refine your complaint-handling processes and identify areas for improvement.
• Resourcing – Sometimes, the best way to improve your complaint-handling process is simply by investing in your people to help you deal with customer complaints quickly and efficiently. In doing so, you can deal with backlogs and meet regulatory deadlines promptly.
• Root cause analysis – There is no use in just treating the symptoms. It’s important to investigate and perform root cause analysis in order to uncover underlying issues in your complaint-handling processes. This includes both the front-line and formal complaints process and making sure any insights are actioned accordingly

Taking the next steps

Firms should be prepared to take the initiative now and start implementing measures to improve complaint-handling processes and reduce volumes. At Davies, we offer a myriad of products and services that cover all the aforementioned tips, as well as additional consulting and bespoke technology services that are designed to help you deliver an outstanding customer experience across all touchpoints.

Get in touch with one of our team members today to find out how we can help you turn customer complaints into brand advocates. We look forward to hearing from you!