15 May 2013
Faced with thousands of policy choices and limited time to study the array of cover offered, people ultimately buy from the provider they trust.
It’s therefore a smart move for any insurer to make earning policyholder’s and prospective policyholder’s trust the number 1 priority. Trust will promote sales growth and increase policy persistence. Reduce marketing costs as favourable word of mouth diminishes the reliance on advertising for new business growth. Ultimately increased levels of trust correlate to increased profits.
“Trust is good for profits” is indisputable but does this pose a philosophical conflict of interest?
Put differently, if in order to gain a policyholder’s trust an insurer acts in an ethical, reliable and dependable manner. The real purpose of the insurer is to drive profits which serve selfish interests. Does this question the honesty of the trustworthy motive? Can a focus on trust in this way be dishonest?
I don’t think it matters from a policyholder’s perspective. That is, whether an insurer operates with a sincere desire to do what’s right or if these actions are driven by a profit motive. Either way, the policyholder’s are better served. It’s the actions that that the policyholder’s see and experience that count and not the intent.
A big proviso is that it’s improbable that policyholder’s trust can be won without the unified effort of all employees.
For an insurer, there can be thousands of interactions that take place internally and externally every day. This will impact on the policyholder’s trust. There is no rule book that will adequately cover all these scenarios to ensure policyholders are treated in a trustworthy way. The only way to create this outcome is to rely on culture and ethos. Unwritten rules that will drive trustworthy behavior. So, as it turns out honesty, dependability and trustworthiness cannot be faked. All employees in an insurance company need to share a desire to treat clients in the same way they would like to be treated if they were the policyholder.
Insurers need to energetically pursue the ideal of policyholder trust as the most important deliverable to policyholders. When these efforts lead to higher profits, they should be free of any guilt to enjoy these rewards as they are well deserved.
The information contained in this communication, including attachments, is not to be construed as advice in terms of the Financial Advisory and Intermediary Services Act of 2002 (“FAIS”) as the writer is neither an appointed representative of Zestlife, nor a licensed financial services provider as contemplated in FAIS. Please consult your Financial Adviser or Zestlife should you require advice of a financial nature and/or intermediary services.