James Moore: HomeServe has no room for boasting when it has so many problems to sort out

Outlook If you ever needed an example of why the insurance industry gets it so wrong so often HomeServe's chief executive Richard Harpin provided it yesterday. Some 94 per cent of HomeServe's customers are satisfied with the service, he declared.

Why, then, has the group has found itself in such a pickle?

The company sells insurance that covers people against all sorts of domestic emergencies – problems with the boiler, the heating, the drains and so on. They pay a monthly premium to HomeServe in the hopes it will sort them out quickly and painlessly. It sounds like a fine idea, particularly for people who can easily get ripped off by unscrupulous tradesmen, such as the elderly.

Trouble is HomeServe often uses contractors (rather than its own people) and they haven't always done the best of jobs.

But there's more. It appears quite a lot of HomeServe's policies have been mis-sold and when people have complained the company has been less than sympathetic. These problems are sufficiently serious to warrant the Financial Services Authority sending in the bovver boys. Which could lead to a hefty fine.

It might be true that 94 per cent of customers are happy, although given that these figures tend to be provided by market research companies, which are after repeat business, that has to be taken with a pinch of salt. But if, like HomeServe, you have 2.7 million customers, the 6 per cent of them less than impressed amounts to 162,000 people. Plus their family members. And all their friends they will be cussing the company out to right now.

HomeServe is an unusual insurer but it seems to have fallen into the sort of bad habits that plague the rest of the industry and are responsible for its rotten reputation. Such as putting all your energies into sales and thus ensuring that when people have to call upon you for help you compound their problems, while patting yourself on the back over rather meaningless numbers like that 94 per cent.

To be fair, Mr Harpin is addressing the problem. Yesterday he told the City that to look after his customers properly he's going to have to lose at least 300,000 of them in the UK. He plans to employ more in-house plumbers and heating engineers, whose performance he can more easily monitor, while incentivising staff to treat customers better. The City didn't like it much but the short-term pain ought to produce a long-term gain.

Mr Harpin's boast of 94 per cent customer satisfaction suggests while his UK business is going to be smaller, it isn't necessarily going to be any more humble. His radical prescription for the company might be the right one. But unless he gets it to a place where only a handful of clients have cause for complaint, and where those complaints are resolved quickly, it won't be cured.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...