Using the service encounter to facilitate regulatory change

John Wiley & Sons Ltd.
Publication Type:
Journal Article
Strategic Change, 2006, 15 (3), pp. 145 - 152
Issue Date:
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The recent spate of corporate collapse and compliance transgressions has increased the amount of regulations that organizations must implement successfully. This paper examines the challenges of implementing regulatory change using the example of the introduction of Financial Services Reform (FSR) for general insurers in Australia specifically considering the impact on customers. FSR introduced a consistent framework of consumer protection across the general insurance industry. However, it also shifted responsibility for decision making about the purchase of insurance to customers in varying degrees. The question was how to engage customers positively when: first, they were required rather than invited to change; second, they had increased responsibility for decisions about purchasing insurance; and third, when regulatory change in general is considered by the customer not to add value. A case study is provided of how Insurance Australia Group (IAG) successfully used the service encounter as a vehicle to educate the customer about FSR, assist them with their new decision-making responsibilities and support the realization of the intended value.
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