The empathy effect: Do UK life insurance companies understand how their customers feel?

Do UK life insurance companies know, or ever try and understand, how their customers feel?

Following a recent family bereavement, I’ve been dealing with several product providers trying to make claims on life policies dating back to the 1980s. Of course, I know how the industry works, and yet even I was unprepared for the array of phone options, hoop jumping, running around, passing the buck and general lack of empathy I experienced.

Can you imagine what it must be like for a bereaved person who is not used to dealing with insurance companies?

The empathy effect: Do UK life insurance companies understand how their customers feel?

First hoop

My Dad took his policies out in the early 1980s. The original companies don’t exist anymore. Another insurer either bought up the back book of business or bought the company entirely and changed the brands. It took me a while to track down who was responsible for the policies today over 30 years later.

Second hoop

Once I’d found the right contact details I picked up the phone.

I sat on hold for 45 minutes listening to some bland music, interrupted by a recorded voice telling me they were experiencing a higher than normal volume of calls.

Are you like me? When I hear this message, and it seems to be every time you phone an insurance company, I wonder why they don’t employ some more people to answer the phone.

46 minutes later I get through to a bored-sounding “customer service agent”. He expresses a little genuine sympathy for my loss and then takes me through the expected security questions.

Him: Policy number?

Me: 12345678X

Him: Cool. Your Dad’s date of birth.

Me: It’s day, month year.

Him: Excellent. Now, what’s his address?

Me: Well this could be difficult. Since my Dad took out the policy he’s lived at 7 different addresses. I have no idea which one you’ll have on your system.

Him: Well you’ll have to give me one address otherwise we can’t continue with the process.

Me: What do you suggest. Should I just guess?

Him: Yes. But if you give me the wrong address I’ll get locked out of the system. It’s to prevent fraud. You know phishing?

Me: Can I email you the addresses?

Him: We don’t accept emails. Only written letters by snail mail.

Me: Okay let’s go with this address (and I give him address number 5).

Him: That’s the wrong address. I’ve now been locked out of the system. You’ll have to write to us.

Now I know this is all to prevent fraud or money laundering but there has to be a simpler way to do this surely? I ask him if he can help me.

Him: Well you could phone again and get a different agent and try a different address.

The thought of another 45 minute wait to listen to more crap music followed by another 1 in 6 chance of guessing the correct address didn’t fill me with much enthusiasm.

Me: So I could try phoning you up to another 6 times until we get the right address.

Him: Basically yes.

So I wrote to them. And waited 10 days for the claim pack to arrive. Filled in the forms and sent them in along with the death certificate, my Dad’s Will, and other necessary documentation. 

In all the payment process took over a month.

Each claim provided a similar experience. One company even lost the death certificate and Will and asked me to resend them. (They’ve since found the first originals I sent them and have returned both sets – but this added two weeks to the process).

Another company kept quoting it’s KPIs at me, “We aim to transact each transaction within 5 working days.” After waiting 10 days I phone them up to chase (and waited 30 minutes on the phone) only to find the policy was in the actuarial department and the KPIs don’t apply to them. “Actuarial just reply when they can”.

Well, that’s alright then.

Again, can you imagine what it must me like for a bereaved person who is not used to dealing with insurance companies?

Where’s the empathy?

Whilst all this was happening I came across an article by my friend Alasdair McGill of customer experience experts, Ashton Mcgill. It might have been one of the times I was on hold because the insurance company was, as always, experiencing particularly high call volumes.

Alasdair’s article laments the lack of empathy displayed by companies in all industries not just financial services. He mentions communications providers like BT and BA as examples of big corporates that just don’t show any sign they understand how their customers feel.

The experience made me think about empathy and its place in customer service and indeed marketing.

Empathy is, “the capacity to understand or feel what another person is experiencing from within the other being’s frame of reference, i.e., the capacity to place oneself in another’s position.” Do we understand how our customers feel?

I worked in the protection industry for many years on the marketing side. Company sales consultants talk about death disability and disease all the time. And you become immune to the actual enormity of what you are saying.

I’ve done it myself over the years. Standing up in front of an audience of financial advisers and quoting stats at them about the likelihood of a person getting cancer in their lifetime. It’s a marketing pitch. Giving them a reason why they should talk to their clients about critical illness cover.

Having a real work colleague discover they have cancer, or losing a loved one is when the enormity of what we are talking about hits home. That’s when you realise just what a big deal it is. 

It’s not numbers on paper or stats on screens. It’s real people facing life changing illness or dying. As big a deal as there ever can be.

How does the customer feel?

Do the CEOs of life companies know what it feels like to hang on the phone for 45 minutes waiting to report the death of a loved one whilst being reminded by a pre-recorded voice how important our call is to them? Can they imagine how upsetting it must be to have to jump through all their hoops and deal with a bored employee who sounds like they’d much rather be at home playing on their XBOX?

Many people in the financial services industry talk about the need to do more advertising to grow the protection market. To make the products simpler. To educate the customer.

The reality is they need to empathise more with their customers.

They must understand how customers feel about insurance companies and protection products.

How they feel about having to fill in a 32-page application form?

How they feel about being told their claim will be declined on a technicality?

Now, many companies just don’t get it. Granted some delegate empathy to external providers like Red Arc (a provider of emotional and practical support), if customers choose to use them, but the general experience is poor.

At a recent conference, some senior industry figures said financial services providers should stop publishing claims statistics. Perhaps this is because they don’t want customers finding out how bad their stats are?

Again, this shows a complete lack of empathy.

Customers think insurers don’t pay claims. They “feel” companies will find any way they can to weasel out of paying. Publishing claims statistics and trying to overcome those perceptions is one of the most important things insurance companies can do to convince the public what they do is good.

Suggesting they stop publishing demonstrates a worrying lack of empathy with customers and will do more to convince them they were right about financial services and the industy does have something to hide.

Alasdair’s article reminded me many companies across many industries lack empathy with their customers. But financial services companies deal with such emotional, deeply personal issues they cannot afford not to fully understand how their customers feel.

Finding real empathy is the only way they’re going to change the what consumers think of them.

Now it’s your turn:

A bit of a rant that. What do you think companies could do to better empathise with their customers? Please leave a comment below or share this on social media and invite your colleagues or friends to join the debate.

Cover Magazine published a shorter version of this article in 2016 – you can find it here.