THE DICTIONARY defines "transformation" as a change in the structure, appearance or character of an entity. By this definition, there is no doubt that the insurance industry is undergoing a transformation, and not in just one of these areas, but in all three.
Consolidations and down-sizings are changing the insurance industry's structure and appearance, and customer demands are slowly beginning to alter the industry's stolid and tradition-bound character. Some of these changes are occurring slowly and painfully, but they are, nevertheless, becoming increasingly apparent.
The litany of complaints about the inefficiencies and poor quality service provided by the present system of insurance is all too familiar, and the complainers include heads of families, small business owners, corporate CEOs and members of the House of Representatives. Customers rightly criticize the industry for being complex, duplicative, wasteful and unresponsive. Often, there is little difference between insurers or their product lines.
Additionally, insurance industry executives tend to change firms like most people change their clothes. Many would say that a general and all-pervading level of mediocrity has become accepted as normal. In fact, in the last 10 years, the industry has I lions of dollars in premium volume as disgruntled customers have turned to alternative methods of risk financing.
However, the industry is beginning to respond to customer demands for better quality. Last year, companies representing all of the disciplines within the system of insurance came together to form the Quality Insurance Congress (QIC). This organization and its members are dedicated to the continuous improvement of industry processes, products and services. The QIC is presently conducting customer research, thereby promoting quality training and education, and working toward increasing awareness about quality issues. No doubt, many insurance buyers believe that it is about time that a group is striving to achieve improvements within the industry.
One of the basic tenets of the quality management philosophy is that insurance professionals must view the business as composed of interdependent parts. Whatever affects one of these parts ultimately has implications for all of the others. The system also includes the people involved with it: stockholders, management, employees, suppliers and, most importantly, customers. …