In the first of a series of monthly analysis, where personal lines products are subjected to the scrutiny of mystery shoppers, Cynthia Ellis reports on the performance of the home insurance market
The customer experience is the new differentiator in today's crowded and standardised marketplace, and being able to gain insights into customers' experience of a business or service provides companies with that extra competitive edge.
Direct Excellence produces competitor benchmarking studies for the insurance sector - the most popular report being Monitor, a regularly researched study of insurance prices, sales capability and customer servicing across most general insurance categories. More than 35 brands are mystery-shopped on a quarterly basis for motor and home policies against high, medium and low profiles that are representative of the UK population. Monitors are also run for the travel, pet and health sectors. These exercises provide clear, comparable data on how companies perform in nearly 100 attributes during a live sales call.
When a test basket of 40 household risks was mystery-shopped in November, significant differences in average premiums emerged. As the resulting tables illustrate, Direct Choice came out £150 cheaper than the average - and over £250 cheaper than the most expensive company.
There was far less difference, however, in the default excess levels in household insurance - with companies typically choosing £50 or £100 as their starting point.
Interestingly, the quicker calls for getting to the quote - or for completing the entire call - did not typically score well on the customer service index, indicating that agents would be well advised to spend some time making the customer feel more comfortable and trusting towards them.
The exercise also revealed huge differences in companies' interest in cross-selling other products during the household insurance quotation process. RIAS, for example, tried to cross sell in two out of three calls while others, such as Prudential, Help the Aged and Admiral did not try at all.
When it comes to the effectiveness of companies explaining their excesses, there is evidently room to improve. Some companies, such as Co-operative Insurance Services and Admiral, seem to score only 35% to 38% in this area, while those at the top of the list like Cornhill, Churchill, Royal Bank of Scotland and Virgin all scored 78%.
Finally, the scoring for 'clearly asking for the sale again' demonstrated significant differences in performance. For example, 83% of Direct Line's calls included clear closing statements, whilst Saga managed a score of only 33%.
- Cynthia Ellis is business development manager at Direct Excellenceclick here to view the pdf
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