Question

A customer service representative (CSR) receives a visit from an angry business owner whose premiums increased 75 percent from the previous renewal even though he had no losses. Which one of the following is the best way for the CSR to respond to this criticism while working to exceed the customer's expectations?

A. Explain that changes in premiums occur in cycles in the insurance industry and are out of the agents' control
B. Listen actively and reduce premiums by eliminating unnecessary coverage and increasing deductibles
C. Refer the customer to the agency manager, who is a long-time acquaintance of the customer
D. Listen empathetically and explain that there are no other alternatives, since prices are equally high if coverage is placed with another insurer

Answer 1

The CSR should actively listen and attempt to reduce premiums by cutting unnecessary coverage and raising deductibles. High copay policies are often offered to those preferring lower monthly premiums, while policies with a high premium and lower copay cater to those expecting frequent healthcare needs.

Step-by-step explanation:

The best way for a customer service representative (CSR) to respond to criticism from a business owner whose premiums increased by 75 percent is option B: Listen actively and reduce premiums by eliminating unnecessary coverage and increasing deductibles. This approach not only addresses the owner's immediate concern over the premium increase but also demonstrates a proactive effort to tailor the policy to the customer's needs, potentially even lowering the overall cost. While external factors such as insurance industry cycles affect pricing, tailoring coverage and deductibles can provide a more customer-centric solution. Insurance companies typically offer policies with a high copay to customers who prefer to pay less in monthly premiums but can afford to pay more out-of-pocket during a claim. Conversely, those willing to pay a higher premium for a lower copay might expect to need more healthcare services or prefer the predictability of more consistent costs over time. Various factors, including state regulations, can impact premium rates, and sometimes insurers withdraw from markets where they're mandated to offer low premiums, as seen in New Jersey's auto insurance market and State Farm's withdrawal from Florida's property insurance market.