It has taken the banks a decade or two to realise that they cannot continue to reduce the value of their service to their customers and do so unscathed.
Unfortunately, while they have made increasing value to the shareholders their singular priority, they have lost sight of those who pay the bills - their customers.
Banks - unlike insurance companies - seem to be slowly starting to realise that by increasing the quality of the service they offer, resulting in happier and more content customers, they will in the long term add value to their shareholders. Insurance companies should follow their belated example and do likewise, but unfortunately, there is little evidence that they are doing so.
Unfortunately for those of us in the restoration industry, the insurance companies are at the other end of the process to the banks. They are back at the start, where they think that adding to their shareholders value and customer service are mutually exclusive.
But they are not.
This intrusion by non specialists like builders is driven by the insurance companies desire to reduce their costs.
The problem is that insurance companies, like other major corporations, focus entirely these days on driving shareholder value and making that the primary goal of the management of the company. As a consequence, service to their customers (who are in effect their real ‘shareholders’) is at the bottom of the priority list - and making money for the shareholders who own shares is at the top.
This arrogant attitude, so often found these days in corporate Australia, translates to an obsession with pricing above quality. Examples of poor and/or falling customer service and skyrocketing corporate profits abound in all areas of our society - from the undermanned (often even unmanned), underresourced public transport system leading to a dangerous environent for many travellers, to the banking sector where fees are continually raised while services are continually eroded.
The insurance industry is no different. In an industry where their whole existence is due to policy holders wanting security if the worst happens, their obsession with maximising shareholder value conflicts directly with their stated company mission statements as professional insurance companies and good corporate citizens.
For those professional restorers out there who have invested time and money in geraing up to become a professional, the intrusion by underqualified builders into the restorers domain means that prices keep on being driven lower and lower.
Good news maybe for the insurance companies because their profits are growing, but bad news for both the restorer and the consumer, both of whom pay for this shortsighted approach which places shareholder returns above all else in the priority list.
The bad news is that while the corporate obsession with shareholder returns continues in certain sectors of our economy, the value of being a professional restorer will be diminished. Consumers will lose out as underqualified contractors try and cut corners to justify the quotes submitted, or ‘under-restore’ due to their genuine lack of industry training, knowledge and equipment.
The good news is that it is inevitable there will come a time when educated consumers will no longer settle for second best and the problems left behind by the underqualified and under resourced builders will come home to roost in a big way.
When this happens, insurance companies may finally see the error of their ways and start to focus on delivering quality to their customers, as some banks are now belatedly trying to do.
Let’s all hope it is not too late for all of us who consider ourselves as specialist restorers, when the insurance company’s finally come to their senses.