Customer service, we are constantly told, is a prime way to differentiate between insurance providers.
But without dealing first hand with a company it is hard to ascertain how good its service really is.
Reviews from colleagues and other industry sources are a good start, and can sometimes be the only opinion needed. However, bad experiences are often relayed twice as loudly as more positive ones, meaning even this method has its pitfalls.
Is your colleague's awful experience one unfortunate case, or the tip of the ice berg in continued poor customer treatment? This is where the authority of a regulatory body can really standout from all the background noise within a market.
Which brings us to this week's release of the latest Financial Ombudsman Service complaints data.
The task of the ombudsman is not an easy one given differences within the insurance market. When we then consider it has to spread its remit across the entire financial services sector it looks near impossible.
Unfortunately, that only serves to make my disappointment doubly deep when surveying the reams of data it does produce.
I admire what the FOS is trying to do, but it has the feeling of a job half done and in the end does no-one any real good.
Of course total numbers of complaints or percentage of those upheld make good headlines and provide somewhat of an insight, but the way the results are presented make it almost impossible to derive real meaning, particularly in the protection and health insurance sectors.
All protection and private medical complaints are grouped under the general insurance classification alongside the likes of buildings, motor and marine insurance. All that is, except whole of life policies, which are found in the life and pensions section.
The FOS already collects data on particular policy types which it presents at the end of every financial year, surely it is only one further step to marry that data with its parent company?
There is no need to break this down too far, maybe just into simpler classifications of ‘pure protection' for critical illness and income protection policies, 'private health' for private medical insurance and cash plans, and so on.
Not only would this provide clarity for protection and health insurance sectors, but benefit general insurance brokers too.
Sadly, it seems any development along these lines is unlikely to happen, with FOS rejecting a similar suggestion from its Complaints Stakeholder Group, saying: "Many members of the Group felt that a more granular breakdown of the published data by product line would be clearer and less misleading, but the ombudsman service said that the data would not be useful if too complex."
However, one measurement apparently not mentioned for consideration by the group was number of complaints per customer. Would this not eradicate many issues associated with market share and available resources?
This is only the third iteration of these figures and hopefully, as the process matures, both the industry and FOS can come to an arrangement that provides greater clarity to customers, advisers, and the providers themselves.
