Mail is a 4 Letter Word

Last week I received 6 letters from the same insurance company. It was for one single travel medical policy (one letter addressed to each member of my family). The letters were informing us, individually, to please contact our insurance broker to renew our policy (which we did purchase on line, originally??). The really sad part of this is that the policy was for a total annual premium of less than $300.

Just like mail usually does in our household, these sat unopened on the front hall table for the whole week. Funny thing though, during the week I received 4 more Insurance documents. One was a standard auto policy, one for a renewal “notification” of a collector automobile policy and 2 policies from my broker (both policies were from the same insurance company but one was for auto and one for my homeowner’s insurance – yet I get a “package discount”). This was way too much to resist writing about.

I meet brokers and insurers on a regular basis, I have been both. There is something broken when I have to get so much “snail” mail. Even worse than the service was the cost; 7 X 77¢ + 2 X $1.20 and 1 X $1.75. Brokers and insurance companies have to find a better way to service their clients. I know I would rather get an email notification with all relevant documents. If a payment is required, it should present me with a link where I can pay securely on-line.

Before I could even publish this article, I have received 6 more renewal reminder notices from insurers to contact my broker and 1 reminder from my broker that I have a policy about to expire in 3 days (which, thankfully, I can go on-line to pay), which was actually sent to the broker by email and they forwarded to me. Broken is the term I would use.

In a world where even governments are becoming less and less dependent on the postal system and going to more and more internet based service delivery, the insurance industry is ensuring that the postal system never dies! Just in one week alone, I received insurance documents in the mail costing (for postage only!) almost $10. Or $9.54 to be exact.

I know there are going to be those that don’t think that this is much. However, this is happening annually, for millions of insurance customers. The total cost of postage is only the most obvious cost in the equation. How about the cost of insurance courier to get the policies from the company to the broker? What about the cost of the mail room staff that have to prepare the mail? How about the cost AND waste of all of the paper and the ink and time to prepare those documents?

Unfortunately, I know that there are certain insurance documents that will require old fashioned delivery. And, there are people who need to have paper mail delivery (although that segment of the population continues to dwindle every second).

I was asked at an industry forum recently, “What should brokers (and companies that deal with brokers) be most worried about?” My answer was simple; be worried about what you haven’t seen yet. It is the unknown who will eat your lunch tomorrow. In this technological age, how can any company afford not to invest in the right technology just to stay competitive? I am not even suggesting that is competing.

Electronic policy delivery, notification and payment are pretty standard fair, yet why are there so many insurers and brokers clinging to a paper model? A telltale sign came from a 4 year old study from a major consulting firm uncovered that more than three-fourths of respondents (79%) rate themselves as “average” or “among the weakest in the [Insurance] industry” in their abilities to provide their customers with multichannel access to their services. More than two-thirds (70%) rated themselves as “average” or “weak” in their capacities to tailor products and services to customer needs. Nearly two-thirds of insurers (64%) gave themselves similar marks in their abilities to provide innovative products and services. Food for thought, or spark to ignite a firestorm?