2009 breakouts identify consumer concerns

Among the most popular and productive components of every Exchange are the breakouts during which attendees can explore the key consumer relations issues and challenges of the day, both from provider and regulatory perspectives. The 2009 St. Louis edition was no exception, as members identified key challenges facing consumers in both the life and health and property/casualty sides of the business.  The life and health session was facilitated by Carol Crosson, Guardian Life Insurance Company, and Angela Nelson of the Missouri Department of Insurance. The property and casualty sessions was facilitated by Mike Hammond of Fireman’s Fund and Joy Hatchette, Maryland Insurance Administration.

Life and Health insurance – Key concerns

Among some of the key concerns in the life and health insurance arena were:

•  Education – Both producers and consumers, a continuing challenge.

Possible solutions (producers):

• Mandated producer training
• Refresher courses
• Specific product training
• Ethics training
• Legislative updates
• Producer-company responsibility

Possible solutions (consumers):

• Online information from companies
• Online checklists of questions to look up
• Continuing education for phone reps

•  Suitability – A perennial concern when marketing insurance to older consumers.Possible solutions:

• Call customer during free look period – company
• One set of guidelines for all
• Consumer must provide all financial information

•   Complaint benchmarking – Techniques for accurately measuring complaint data.

Possible solutions:

• Independent 3rd party to provide information to company
• Define “A complaint”
• Specialized problem team (SWAT)

•   Stranger-Owned Life Insurance (STOLI) – While there are legitimate purposes for this type of coverage, it remains open to misunderstandings and potential abuse.

Possible solutions:

• Consumer education
• Huge risk
• Legislation
• Define STOLI & IOLI = unfair trade
• Define insurable interest

•   Replacement – Another ongoing concern, especially during a tough economy when agents are seeking business opportunities.

Possible solutions:

• Improved consumer and adherence to suitability
• Better disclosures
• More company monitoring

•   Internet/social networking – Growing questions about how emerging technologies will affect consumer complaints and company reputations.

Possible solutions:

• Better monitoring
• Obtain approval to use
• Develop a written policy
• Improved consumer education

Other concerns:

• Barriers to health insurance – Difficulties that many consumers may have accessing the traditional health insurance markets, including affordability, increasing costs and the gap between ages 60-65 when individuals are eligible for Medicare.
• Long Term Care – Concerns of consumers on fixed incomes surrounding rate increases and the challenges of explaining those increases.

Property & Casualty insurance – Key concerns

Issues and potential solutions identified by the property & casualty breakouts trended in similar directions, including:

Pricing

• Affordability remains an ongoing concern among consumers.
• Resale value versus insurance value is not well understood in the current environment – Just because a home’s value had decreased on paper does not mean that the cost to rebuild it will be significantly impacted.
• Education/policy review – Educating consumers about the workings of their insurance policies remains a persistent and ongoing concern.

Underwriting practices

• Tightening of rules has the potential to increase consumer complaints.
• A greater number of underwriting factors makes the education process even more challenging.
• In some respects, narrowing and more specific underwriting factors are making it harder for agents to explain what is contained within policies.

Repeat complaints

• Repeat complaints are increasing.
• Requiring multiple follow-ups.
• Consumers are trying to squeeze every dollar, making complaints more likely.

Social media (not Internet)

• New technologies such as Twitter & Facebook may transform the complaint process.
• Blogs & MySpace present the same issues, with reputation risk for insurance carriers.
• If a posting is identified as a complaint, who will handle it and how do you continue the contact?
• How does a company protect its brand in a new environment of iPhones and other technologies?
• What privacy issues may result from these new technologies?
• Will the immediacy of new technologies affect consumers’ expectations regarding the timeliness of responses?
• Is reaching out through these new technologies a positive trend, or will it open up new legal issues?