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Can bad claims experiences cause customers to leave their insurer?

News item

Publication date:

12 January 2021

Last updated:

12 January 2021

Author(s):

James Moorhouse

Examining how claims data can improve the relationship between a customer and their insurer.

When customers make an insurance claim, they are generally looking for a speedy and positive resolution. The use of data has been able to accelerate the resolution process, as well as provide insurers with more accurate analytics. This data can be used to predict and calculate a risk. But how else could this data be used?

 

Customers and vendors

A customer experience is more than just making a claim and hoping for a payment. From the originally purchased policy, through the resolution process, to multiple suppliers assisting with restorations. There are many different stages and personnel involved.

Instead of focusing solely on the payment, claims handlers should be looking at the entire claims journey as they will be the ones who have to resolve any queries as well as be the ‘face’ of the entire process. Claims handlers can better understand the processes and number of customer touches by capturing these data points during the claims journey. This will allow them to understand the different stages, how these interactions take place and what expectations result from this.

Partnering with multiple vendors will prevent an echo chamber where no new insights are captured. It may be that some processes are robust, but this does not mean that expectations and interactions will remain the same. Consider how the quality of data has changed over the past few years. And are any of these data points being missed by insurers? Insurers should be asking suppliers what insights they’re capturing to help them understand customers better.

 

Claims resolution process

Speed is often a determining factor when it comes to how customers value their insurer. If insurers cannot come to a resolution quickly, this leaves the customer with a disappointing experience. While it is important to be fair during the decision-making process, being fair and slow does not make the customer happy. There is a correlation between the length of the claim and the expectations of the customer. However, the type of claim also needs to be considered as the speed in which a property and casualty (P&C) claim will be resolved will differ to that of a life and health (L&H) claim

Claims handlers can obtain a better understanding of customer experiences during the claims process with a net promoter score (NPS) survey. This will help to learn how customers are interacting with vendors and suppliers, not just with their insurer. Providing customer experience surveys at the end of the resolution also gives the customer an opportunity to provide a more personal insight to their experience, highlighting any issues they may have faced during the claim.

 

AI vs. human behaviour

Service providers should use their data to show value in the claims resolution process, as better data can make them more knowledgeable about their customer. Insurers still need behavioural perspectives on how to treat the customer effectively, such as building an accurate customer profile, recognising what type of approach would be best or how to apply empathy.

A mobile application that has a simple and transparent claims process where everyone can see what has been claimed, any evidence submitted and what the current status is would be mutually beneficial to everyone involved. This data shows everyone the same information in real time, preventing confusion or delays. Lines such as motor and home could benefit from this where customers could upload information, photographic evidence and other details at the touch of a button. As long as the questions and processes are specific and clear, this should make the customer feel reassured and help progress the claim at a rate that is reasonable and fair.

AI can also be utilised to help detect fraud. While customers obviously do not want to be treated suspiciously, data can monitor transactions to detect any unusual patterns or transactions.

The misconception about data is that it is used to spy on and trick customers. However, the more data insurers have the better. This allows them to have a wider perspective and therefore better understanding about how and why things happen. By reaching out into the data ecosystem, insurers will be able to see a much larger picture than if they are relying on their own captured customer data. This can help to inform better and quicker decisions as well as provide a better insight into the reasonings behind them.

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), Society of Claims Professionals or Chartered Insurance Institute, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the Society or Chartered Insurance Institute.

 
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