February 21, 2022

Suchi Rajendran

Despite their catchy commercials, insurance companies have a public relations problem. Numerous studies have shown that general perceptions of the industry are negative. Now, a team of Mizzou researchers have used their industrial engineering expertise to find out why.

In a first-of-its-kind study, Suchi Rajendran and Sharan Srinivas, assistant professors in industrial and manufacturing systems engineering, along with senior Emily Pagel, mined publicly available data to determine some of the root causes of public dissatisfaction.

“We were motivated to study this specific sector because it has not received as much attention as health care, manufacturing or other industries,” said Srinivas, who has a joint appointment in the Trulaske School of Business. “Insurance companies contribute about $600 billion to the U.S. gross domestic product and employ over 2.5 million people, but the overall perception of clients and workers in this domain is poor.”

The research team combed through online reviews and social media posts to determine specific complaints against the top four insurance companies in the country. While online reviews, in general, tend to skew negative, the researchers looked for specific themes and service quality aspects discussed in the reviews. They determined that customers are mainly unhappy about the assistance they receive, payment and claims processes, a lack of discounts and poor communication.

“From there, we were able to identify the underlying reasons for customer satisfaction and dissatisfaction pertaining to each aspect,” Rajendran said. “For instance, some root causes of dissatisfaction around client assistance were unreturned phone calls, long wait times and delayed inspections.”

Simple solutions such as implementing call-back systems or improving payment options could help boost public perceptions, she said.

Sharan Srinivas

Another factor impacting public perception is how satisfied and motivated employees are. The researchers found that long work hours, complicated training and low salaries have a negative impact on the insurance workforce, which sees a roughly 13% turnover rate each year.

“The voice of the employee is also important but often ignored,” Srinivas said. “Employees are the company’s internal customers, and it’s important they’re satisfied and motivated because they’re the ones who directly engage with the external customers, who pays for the products and/or services.”

Incentivizing employees with perks such as recreational services or mentorship programs could boost morale and translate into improved employee satisfaction, researchers found.

In the study, published in the January issue of Benchmarking: An International Journal, the team provided a SWOT analysis for the top four insurance companies. The analysis outlines strengths, weaknesses, opportunities and threats for each company.

“If companies were to adopt this as a decision support tool, they’ll not only understand the voice of customers and employees but will also be able to see what their competitors are doing well and how they can distinguish themselves from their peers,” Rajendran said. “We’ve provided some practical implications and recommendations for insurance companies on how to overcome the problems they are facing.”