Trust is a fragile thing
Article

Trust is a fragile thing

Insurance products are complex. People need to trust the insurers before becoming their customers. Ways to gain trust include making an effort to understand customer needs and history, offering products that are easy to understand, and ensuring customer interactions are free of errors. Trustworthy insurers can afford to compete on quality, not pricing, which is a competitive advantage.

Insurance policies and contracts are very complex, and most customers are unable to navigate on their own. Before entrusting decisions to providers, customers need to trust these providers. Oftentimes, customers tend to find providers trustworthy after they experience a great service from them.

Trust is a fragile thing. Minor clerical errors such as a misspelled name or a failure to resolve an enquiry erode trust, and prompt customers to consider other providers. Businesses that depend on trust must excel at delivering great and error-free customer interactions.

Gain customers’ trust

People in general don’t trust the financial industry these days. Interestingly, a lack of trust also presents an opportunity for insurers which make an effort to show customers that they care and are trustworthy.

One way to gain people’s trust is to make your products as simple as possible. People don’t trust what they don’t understand, and very few people actually understand insurance. Simple and easy-to-understand insurance products assure customers that these insurers understand what is best for them. Once trust is established, people’s desire to “understand” fades because they have already entrusted the decisions to the insurers.

Only 31% of European customers trust their insurance company

Know your customers

It means understanding the common challenges facing the customers and listening to them. Claim history, big data and the record of customer interactions are key sources of insights. Customers feel personally engaged when you make an effort to understand them. It shows that you care, and they reward you with loyalty. Therefore, never treat customers as policy numbers, because they will punish you by leaving you.

Remove minute irritations

Large systems are prone to small errors. Most customers accept and expect small cracks in any service experience. However, if minor errors recur, they can be added up to a disastrous experience. Businesses that have a relentless focus on removing these small irritations can gain trust from customers, who are increasingly confident in the organisations.

Compete on quality, not pricing

Trustworthy companies can afford to compete on quality instead of pricing. Insurers that are proven trusted partners can gain competitive advantage and get positive word of mouth.