Customer ratings can be tricky for any business, but in the insurance industry it poses some unique challenges.
For legacy insurers, who are inherently local, customer reviews can be highly volatile – with some branches receiving much better feedback than others.
With insurtechs on the other hand, providing a unified customer experience across borders means that it’s much easier to get a better score – if you prioritise providing the best service.
That being said, there are some situations that are hard for any insurance business to avoid. After all, the need for insurance is due to a negative life event, so the stakes are already higher.
Here I discuss the truth behind some poor insurtech reviews my company has received, and what if anything, providers can do about it.
The three types of insurance customer reviews
1. Customers who take their frustration out on the insurer
Let’s start with the bad reviews that are unjustified. We all get frustrated by customer service sometimes. With insurance in particular, customers have experienced something negative and are looking for a fix.
Unfortunately the reality is that we can’t always help them. And then there are also those who try to take advantage of the system.
Example 1: The one that’s not covered
In this case, the claim is quickly rejected because it doesn’t meet the coverage requirements – the customer then complains that they’re not covered.
A classic example is that a customer’s bike was stolen because they didn’t take the right preventative measures. The bike was either outside with a very weak lock or unlocked inside in a public area such as a parking garage or building entrance – neither
of which are covered cases.
Why is that? Due to the prevalence of bike theft, insurance companies require that bikes be locked to a fixed point in the ground with a high-quality lock. Otherwise, too many bikes would get stolen and insurers would ask a crazy high premium to cover their
losses.
Let’s be clear: people that truly minimise and prevent risks should not have to pay more because others don’t do the same. Insurance is a concept of solidarity after all, so we should all be more cautious.
Despite the fact that these coverage requirements are very clearly communicated to customers at various points – in the bike purchase flow, their insurance contract, emails, etc. – and even if we answer them politely and diligently, we’ll still get 1 star
on Trustpilot.
While we certainly understand their frustration, this demonstrates the balance between price and coverage in the insurance industry. How many exclusions an insurance product has is not really driven by the insurance company itself, but by the willingness
of the market to pay a higher price for more comprehensive coverage.
If we were to propose car insurance for 10,000 or 1,000, which would you choose? The lower price of course! That means insurers will have to make trade-offs and therefore end users will face more exclusions on their coverage.
Example 2: The one with the outrageous claim
Some people will claim anything and everything. These types of claims are rejected simply because they’re absurd.
Here's one that may or may not be based on a true story: a customer has home insurance that protects their home and belongings in case of fire, flooding, earthquakes, etc. The customer invites a friend to stay over after a big party where apparently they
both consumed lots of alcohol. The friend sleeps on the customer’s brand new couch – and accidentally empties their bladder on the couch while sleeping.
The policyholder sends their insurance provider graphic images of the scene and claims that their fire insurance should cover the cost of a new couch. Clearly this situation is not covered, but they gave us a negative review anyway.
Example 3: The one that smells like fraud
Fraudsters use anything they can to pressure the company into reimbursing them. The tough part about investigating a fraudulent case is that you often avoid open communication with the customer until you're 100% sure that it's fraud, which leads them to
send follow up messages and become frustrated by a lack of response.
There are countless instances where a claimant sends evidence of a broken smartphone for their purchase protection insurance that can be traced back to Google – oftentimes it’s the first image that pops up when you search for ‘broken smartphone’. In another
lack of creativity, we often get fake invoices that were created in a Word doc with the claimant’s name as the creator.
In most of these cases, the client will try to contact us several times while we gather evidence. Sometimes they tweet about their frustration or even randomly email our management team to try to elicit a response.
This tactic is intended to put pressure on the claim handler so that they might decide to pay rather than take the time to thoroughly investigate. And in the majority of these cases, whether we’re still investigating or whether we’ve told the claimant that
we caught them trying to commit fraud, we’ll always get a poor rating on Trustpilot.
So what can insurers do about all this?
To reduce the amount of customers who are unhappy with their coverage, it’s important to create awareness that if people want to ‘pay peanuts, they’ll get monkeys’.
In B2B distribution, we can educate companies on the fact that the amount they’re willing to pay has a direct effect on the quality of coverage.
Still, as long as people are only looking for the cheapest price when it comes to insurance, there’s not much we can do.
2. Customers who are right to be upset, but the issue was due to human error
We’ve talked about bad reviews that are unjustified, but about when they are?
Sometimes, poor customer reviews are warranted. In some cases it’s due to poor quality service (more on that later), but in many cases, the complaint involves human error on the part of the claim handler.
Let’s face it: claims are managed by human beings, which means that everyone makes mistakes, whether you work at a tech start-up or a large corporate insurer.
But rather than directly communicating with us to resolve the mistake, some customers are quick to give a 1-star review instead.
The life of an insurance claims handler is not an easy one. Claims happen because a real human being is suffering, whether for material damage or their health. Every claimant wants to be compensated as soon as possible, which means that claims handlers are
under pressure to work as quickly as possible.
Not to mention that analysing the terms and conditions of an insurance product is extremely complicated. Even if we make them as simple as possible, insurance is still based on strict regulation, which leads to heavy legal documents that claims handlers
need to parse through.
Dealing with this on top of multiple countries, products, cases and requests means that there will always be mistakes. Sometimes claims that should have been covered are refused; sometimes customers are reimbursed less (or more) than they should’ve been;
and sometimes there are communication mishaps.
Here’s a recent example: one of our claim handlers refused to cover a flight cancellation because the flight was taking off in a country outside of their place of residence. Trip cancellation is meant to cover cancellations made before leaving on holiday,
with a clear exclusion for cancelled flights while the person is already on holiday (for example, if they wanted to extend their stay and rebook a new flight later on).
But in this case, the claim handler moved too quickly. It was actually a Belgian citizen who was taking off from nearby Amsterdam for logistical reasons.
Instead of complaining directly to our team, the customer took to Trustpilot and Google. Our team quickly picked up the complaint and reimbursed them, but the customer didn’t give us a chance to react first and we were still left with a low score.
Error is human, and having an open discussion is often the solution. Low scores like this can drive internal improvements such as process changes, product enhancements and increased guidance for claims handlers.
But in practise, no two claims look alike. So as much as we try to improve, there will always be new cases and sometimes new mistakes.
3. Customers who are right to be upset because they got bad service
There are also reviews that are simply due to bad service. This can be due to poor SLAs, a lack of them entirely or little incentive to fulfil them – which is usually a bigger problem for legacy insurers.
Insurtechs, on the other hand, have clear SLAs in place with their partners. On top of that, they also pay penalty fees if they don’t reach them, engage in real-time data sharing and focus on providing the best service possible.
This ensures that end customers receive not only a more satisfying claim solution but have a better experience in the process..
Conclusion
Both insurtechs and legacy insurers can fall prey to bad customer reviews. Some of them might be totally unfounded – such as in the case of someone trying to commit fraud or someone who’s simply not covered.
Other customers are frustrated due to natural human error or poor service.
In my experience, insurtechs have a better track record of being more customer-centric, having more transparency on service and leaning into tech-forward processes with automation and AI to create a comprehensive customer service across borders.