CUSTOMER SERVICE

To stand out from the competition to attract & retain customers An Insurer can provide high-quality service to its customers using Customer Service. It is the broad range of activities that a company and its employees perform to keep customers satisfied so they will continue doing business with the company.

Insurance Company Customers

Apart from policy owners, many other people who’ve business dealings with the insurers are also customers.

External Customers

Any person or organization in a position to [1] buy or use the company’s products or [2] advice or influence others to buy or use the company’s products. Most visible external customers are policy owners, group policyholders, insured, beneficiaries, TPAs, Insurance regulators, Employee benefits advisers and applicants for insurance products.

Internal Customers

Is a company employee or department that receives service from another employee or department within the company.

Insurance Producers

Career agents, independent producers, and other insurance salespeople have characteristics of both internal and external customers. Producers are external customers because they’re in a position to advice consumers and organizational buyers. However, producers are also considered to be internal customers because they are paid by the company and receive services from company employees.

Who Provides Customer Service?

Any employee who interacts with a customer may be expected to provide customer service. There are certain depts. Whose primary responsibility is performing customer service activities are known as Customer Service department & Customer Service Representative.

Why is Customer Service So Important?

• Building long-term customer loyalty
• Attracting new customers
• Attracting & retaining customers
• Attracting & retaining high quality employees
• Increasing productivity
• Improving the company’s profitability.

Effective Customer Service – prompt, complete, accurate, courteous, confidential & convenient.

Performing administrative tasks has been and will continue to be an important part of a customer service representative’s job. But they’re also asked to recognize customers’ evolving needs and to arrange for customers to receive information about the company’s products and services that match those needs.

A policy owner who does not currently have a relationship with producer is called an orphan policy owner.

Policy owners sometimes decide to replace one policy with another. A replacement is the purchase of one life insurance or annuity policy using money received from the surrender of another life insurance or annuity policy. Replacements can be internal or external. In an internal replacement, the new policy is purchased from the same insurer whereas in external replacement is the opposite.

Section 1035 Exchanges

A policy replacement can result in unfavorable tax consequences to the policy owner. For federal income tax purposes in the US, a policy replacement can be treated as if the original policy were surrendered. If the net cash surrender value is greater than the cost basis of the original policy, then the difference is considered a gain and is generally taxable as ordinary income. The cost basis is the sum of the premiums paid for an insurance or annuity policy minus withdrawals. However Section 1035 of US Internal Revenue Code permits the tax-free exchange of specified types of insurance and annuity policies. A transaction involving the tax-free exchange of life insurance or annuity policies is known as Section 1035 exchange. Three types of 1035 exchanges are

• One life insurance policy for another LI policy where both policies insure the same person and have the same owner.
• A life insurance policy for an annuity.
• One annuity policy for another annuity policy where annuity benefits are payable to the same person(s).

Two types not allowed under 1035 are

• Exchange of annuity for LI policy
• The exchange of a policy insuring one life for a policy insuring two lives.

Some insurers use mystery shoppers, who are trained evaluators that contact CSRs and pretend to be customers. The mystery shoppers conducts a transaction with the CSR and evaluates the CSRs communication skills, etiquette, product knowledge, clarity of explanations, attitude, and so on.