Be Fair to CSRs

Let’s not blame CSRs for insurance fraud. Press ‘1’ if you think that is unfair.

Insurance customer service and claims representatives may not have realized it but when they fail to do their jobs, they are contributing to the insurance fraud problem.

According to a survey by Accenture, more than half (55 percent) of U.S. consumers say poor service from an insurance company is more likely to cause an individual to retaliate by committing fraud against that company.

“The potential increase in the likelihood of fraudulent claims is driven by both the consumer’s desire to recover monies and as retaliation against poor service,” said Michael A. Costonis, executive director of Accenture’s Insurance practice in North America.

According to Costonis, this should be a wake-up call for customer service reps and departments. “This creates a significant challenge for insurers to examine every aspect of claims service delivery, including the way they review and analyze potentially fraudulent claims and the service touch points with their policyholders. Doing this correctly will help insurers stay competitive and attract and keep customers in this tough economic environment.”

Wait a minute. Let’s not blame claims and service reps for insurance fraud. Press “1” if you think that is unfair. CSRs are not the ones who created impersonal call centers, invented speech recognition software or designed those wonderful menus that direct callers though a maze of options and then disconnect them when they get close to speaking with an actual person. CSRs are also not the ones letting customers file claims over the Internet, which is becoming more common.

Instead, CSRs are the ones who have to calm these agitated customers in their time of need and tell them their payout will likely be lower than they had hoped.

Digging deeper into the survey casts doubt on how much customer service contributes to fraud. Fraud occurs because of peoples’ need for money (cited by 60 percent of respondents), or because they believe they paid too much for insurance (42 percent). One-third said that those committing fraud do so in order to make up for their deductible. More than three quarters (76 percent) said that people are more likely to commit insurance fraud during an economic downturn than in more normal times, up from 66 percent in 2003. In addition, more than two-third of respondents (68 percent) said they believe insurance fraud occurs because people believe they can get away with it, up from 49 percent in 2003.

The survey does not appear to weigh the relative importance of the factors it identifies as contributing to fraud. Is a phone call returned late as big a factor as an insured’s own financial situation or ethics? Is being put on hold as significant as how much the deductible is? Does anything else matter if the payout is seen as too low?

CSRs are in no position to control their customers’ need for money; what the deductibles, premiums or other policy terms are; the public’s love for the insurance industry, or the condition of the economy. Everyone in the industry can do more to prevent fraud but let’s not put the burden on customer service. Let’s recognize how much CSRs are already asked to do and let’s be fair about just how much they can do.