Delivery equals indispensability
The quiet agent or the insurance man who could get almost anything done—would even pay your premiums when the policy became due and for some reason you were likely to miss out renewing your cover. He would be out there ahead of your beck and call, God forbid, if you had a claim trigger under any of your policies. He could also get all your other avenues like tax-saving and other investments addressed, at your door-step. A seamless intermediation, an epitome of delivery rather than distribution. Far diverse in offerings rather than a mere transactional one-off relationship. Maturing with time like a good quality wine. In other words, near indispensable part of your financial risk management value chain. And what made it difficult to dispense was the value proposition, ‘Always there for you’.
For anyone today who tends to take the virtual anytime communication for granted, forever—the age and woes of landline phones would be far and wide out of bounds of their imagination. Particularly, in places where it was a luxury and not a commodity. All the gaps and snags were taken care of by this one man institution. It was certainly not terminated by advances either in telephony or the Internet.
Distribution is not equal to delivery
Distribution is but a small part of delivery and more fixated with the point of sale (PoS). We trade in the ‘business of trouble’. The woes of our trade commence only after a sale. PoS is only the first major milestone. Thereafter come the several test cases—sometimes unique to each individual every time— thereby very special Moments of Truth (MOT). It is actually going beyond realm of sale into the world of individual experience that makes our business uniquely diverse. Yes, it has its own downsides because we then impose Standard Operating Procedures (SOP) which do not allow the individual customer to be treated as special. Our call centres—whether onshore, off-shore or outsourced—further complicate it in their diverse ways. Generally, cultural in nuances.
The POS-MOT gulf
Having sold you a policy or any financial product for that matter, the focus of a financial services entity is on the next kill (sale). The ‘back office’ is faceless, notoriously prone to staffing churn, diverse in unacceptable ways and the customer is a king or queen of no consequence. The customer is confused and anxious, because distribution only drives sales. It wants to sell what it wants to sell. Neither what the end user desires or deserves, nor a solution. This can never lead to a true fulfillment across the spectrum. Be it retail, commercial or corporate in nature.
Distribution is about sales hence short-term. It is full of discontinuity thereby makes it harder to retain a customer. We all know it is more expensive to acquire a new customer than retaining one. It makes the entire arithmetic unsustainable.
Now look at what the language of distribution does to our business. We end up creating separate silos that end up contesting with each other. Take multi-channels of distribution for instance. Agents, brokers, bancassurance, direct, e-commerce, etc. A client is not a company’s property but that of the channel which first acquired him. Each of them has a separate protocol and no unified approach. Sometimes one channel cannibalises another channel’s business. Another time by going direct the company gobbles its own channel’s property. Not that there are no opportunities for a client to beat the system and maximise the benefits it derives while each of the channel strives to figure out respective ‘life time value’ of its customer! Imagine what happens to the brand value of such a company?
It is not just the sales arms fighting to finish. The rest of the organisation tends to be anarchic too. It is underwriting versus claims versus marketing versus operations versus geographic entities. If you are not treated as a company’s customer, the concerned brand is already diluted or contaminated. The dissonance will only make the jobs of those running and even supervising such businesses fraught with negative and even toxic energy.
Delivery on the other hand is service driven. It is about managing and sustaining the continuum of relationship. Thereby comes in bottom line value. Unfortunately and increasingly the insurance business is configured as a sales organisation. The behavior and personality mutate into something inherently contradictory. Not just that, some of them also tend to pose as role models for the bottom of the pyramid entities who owe their existence to pure service. In emerging economies this is embedding a bad DNA into the evolutionary cycle of the financial services architecture.
The insurance business need to really think hard and deep as to where must it head. It cannot afford to be naive in interchanging distribution for delivery. Having done so, it calls for a course correction. It must not allow itself to be conditioned as a sales industry. The POS mind-set needs to be reconfigured as MOT. Both are diverse in their own ways. Let us not forget that having chosen the current way; we have already invited upon ourselves the risk of unintended consequence. Before this risk becomes perilous enough to threaten our raison d’être let us bring back the indispensability of service that we all seem to be missing in the world of financial super-markets or the one-stop shops. The idea is not to simplify things as they existed way back in time. It is about keeping things simple in a unified and holistic way. Not only will it have positive implications for the physics of our networks but will also deliver the chemistry right. Let us make delivery the self fulfilling prophecy by minding our language.
The author is the MD & CEO of Raheja QBE General Insurance Co Ltd
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