Life companies forget about customers

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Accuro has bucked the trend of falling health insurance cover, seeing quarter-on-quarter growth for the last three quarters, and chief executive Bruce Morrison believes he knows why.

Monday, June 13th 2011, 4:46PM 2 Comments

by Benn Bathgate

He says it's all about focusing on the customer. Often he says the insurance industry forgets about that.

"I think we're all focused on, and have been, on how do we get the stuff out of the door, how do we flog it to the best effect, and I don't think we've focused on the right place."

"I don't think that everybody thinks about the customer when they do something, when they build product, when they design the definitions, when they service the claims.

Figures released by the Health Funds Association (HFANZ) showed that while health insurance claims in the 12 months to March 2011 rose 6.3% on the previous year (up to $828 million), the number of lives covered fell by 5,500 in the three months to March and 13,000 over the year.

This lack of customer focus is the main reason Morrison believes there has been a reduction in the number of people taking out health insurance.

HFANZ chief executive Roger Styles cited the recession as one factor for the fall in numbers, something Morrison also believes has played a role, though for him customer focus and communication also play an important part.

When it comes to issues facing the industry, Morrison highlights medical inflation as one of the key challenges.

"You do see big increases of cost without hugely corresponding gains from the claims or the people going back to work earlier. You're now spending $25,000 on something that used to cost $10,000 and the client gets back to work a day quicker which is great for the client but hellishly expensive on the insurance."

He also said not having to answer to shareholders gave Accuro an edge when it comes to the customer service they can deliver.

"It comes back again to customer focus. I have to admit we're in a nice position to be genuinely member focused, as opposed to shareholder focused as our members are the shareholders. I know it sounds corny - the old mutual thing - but there's some value in that."

"I think we're all focused on, and have been, on how do we get the stuff out of the door, how do we flog it to the best effect, and I don't think we've focused on the right place."

"I don't think that everybody thinks about the customer when they do something, when they build product, when they design the definitions, when they service the claims.

Figures released by the Health Funds Association (HFANZ) showed that while health insurance claims in the 12 months to March 2011 rose 6.3% on the previous year (up to $828 million), the number of lives covered fell by 5,500 in the three months to March and 13,000 over the year.

This lack of customer focus is the main reason Morrison believes there has been a reduction in the number of people taking out health insurance.

HFANZ chief executive Roger Styles cited the recession as one factor for the fall in numbers, something Morrison also believes has played a role, though for him customer focus and communication also play an important part.

When it comes to issues facing the industry, Morrison highlights medical inflation as one of the key challenges.

"You do see big increases of cost without hugely corresponding gains from the claims or the people going back to work earlier. You're now spending $25,000 on something that used to cost $10,000 and the client gets back to work a day quicker which is great for the client but hellishly expensive on the insurance."

He also said not having to answer to shareholders gave Accuro an edge when it comes to the customer service they can deliver.

"It comes back again to customer focus. I have to admit we're in a nice position to be genuinely member focused, as opposed to shareholder focused as our members are the shareholders. I know it sounds corny - the old mutual thing - but there's some value in that."

Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz

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