Customer satisfaction within the insurance industry has decreased in the last six months, according to the Customer Respect Group, an international research and consulting firm based in Ipswich, Mass.
"The insurance industry seems stuck in a dilemma of whether to, or how to, improve customer-friendly policies," said Terry Golesworthy, president of group. "The industry has made the least progress of all major customer-focused industries. Moreover, companies continue to share information with third parties at a far higher rate. Our strong recommendation is that to avoid customer defections, insurers pay stronger attention to these issues."
Overall, the insurance industry's customer respect index slipped slightly from a CRI rating of 6.1 six months ago to 5.9 in the latest survey. This contrasts with the trend of slow but steady improvements being made in most industries, the group noted. The property and casualty sector had the best average with 6.2, followed by life and health with 5.9, and health-care plans with 5.4.
One of the aspects of customer service assessed was the "ignore rate." The insurance industry failed to response to 26 percent of e-mail inquiries, compared to an average of 16 percent for financial services as a whole. Although the quality of the responses improved slightly, the speed of responses decreased, resulting in only 16 percent of e-mails' receiving helpful responses within 24 hours.
The results were due to erratic industry performance, the study noted. Although 47 percent of firms responded consistently, 12 percent did not respond to any of the repeated inquiries sent to them. Responsiveness has declined overall over the past four reports, and insurance firms have lost considerable ground compared to other industry sectors, the study's authors pointed out.
Insurance firms also are as seen as less than concerned about their customer's privacy. Only 13 percent of companies provide privacy policies with a good structure that allows easy access to important information. This is nine percentage points below the 2004 average figure. Furthermore, 34 percent of insurance companies share data with business partners or third parties without explicit permission from customers, compared to 24 percent of all companies in 2004. Another 11 percent have unclear policies regarding data sharing.
The lack of structure and clarity contrasts with the trend of greater transparency demonstrated by other industries. Over the last four reports, there has been a steady decline in transparency, or clarity of policy, demonstrated by insurance companies.
The group also chided the insurance industry for being the only industry sector evaluated with no web site to have attained the standard of Excellent.
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