Car insurers shouldn’t take policyholder loyalty for granted. Even if you offer competitive rates, you could lose customers due to a poor claims experience. To prevent policyholder churn and revenue loss, you need a car insurance claims process that puts claimants at ease. A lack of transparency and plain language could cost you.
Claimant Satisfaction Is Dropping
Accenture surveyed 6,754 auto and home policyholders who had made a claim in the last two years and found that 31 percent were not fully satisfied with the claims handling experience. Although this means that the majority of policyholders were satisfied, it also means that a substantial number – nearly one in three – were not. That’s a lot of unhappy customers.
The situation appears to be getting worse. The 2022 U.S. Property Claims Satisfaction Study from J.D. Power found that overall satisfaction scores have dropped. Even though insurers have been busy investing in tech upgrades, claims satisfaction hasn’t been this low in at least five years.
Billions Are at Sake
The whole point of buying insurance is to secure financial protection in case you have to file a claim at some point. For this reason, claims satisfaction is hugely important. If policyholders aren’t happy with the way their claims are handled, why would they stay with the insurer?
The answer, in many cases, is that they won’t.
Policyholder churn tends to increase after a claim, especially if the claimant is unhappy. Most people in the insurance industry understand this, but they might not realize exactly how much is at stake. Accenture crunched the numbers and found that $170 billion in insurance premiums could be at risk over the next five years due to poor claims experiences.
In any industry, it’s hard to stay profitable if your customers aren’t happy – and the insurance industry is no different. To boost insurance customer satisfaction, insurers need to take control of the claims process.
What Do Claimants Want?
Before you can boost claimant satisfaction, you have to figure out what policyholders want from the claims process.
A good payout is an obvious answer. Claimants don’t like it when you reject their claims or make a settlement offer of is less than they wanted. To back this up, Publicis Sapient surveyed people who had filed vehicle insurance claims and found that smaller-than-expected claims payouts and claims denials were among the top complaints. Likewise, Value Penguin looked at complaint data from the National Association of Insurance Commissioners and found that the most common complaint was about unsatisfactory claim settlement offers.
A fast claims resolution is another obvious answer. Claims tend to be stressful for policyholders – they usually just want to get the claims process over with as soon as possible. This is especially true when they’re waiting for vehicle repairs to be able to get back on the road and get on with their lives. Unsurprisingly, Publicis Sapient found that delays in claims payouts were another common concern, and Value Penguin found that claim delays were the second-most common complaint.
To summarize, policyholders want large settlement offers that are issued without delay. But insurance claim handlers can’t just automatically approve every claim for the policy limit. Sure, it would make a lot of policyholders happy, but it wouldn’t be sustainable. Claims handlers need to determine what coverage is available under the terms of the insurance policy. For more complicated claims, this can take time and it might not result in the settlement the claimants were hoping for.
If insurers can’t just give claimants whatever they want, how can they keep policyholders satisfied? The answer lies in good communication and transparency.
Why Good Communication Is at the Heart of Claimant Satisfaction
We’ve already covered three of the five biggest claimant frustrations identified by Publicis Sapient. The other two were a lack of information about the claims process and an inability to reach claims staff.
In other words, policyholders are frustrated with poor communication.
Previous research from McKinsey & Company backs this up. McKinsey identified five qualities that are key to driving auto insurance customer satisfaction – and speed of settlement makes the list. However, employee courtesy, the ease of communicating with the insurer, employee knowledge and professionalism, and the transparency and ease of the process are also key factors.
You Need to Set Expectations and Ease Fears
In 2020, there were 5,250,837 police-reported car crashes in the U.S., according to the NHTSA. That’s a lot of accidents, For claims handlers, car crashes are an everyday occurrence; however, for the average driver, car crashes are rare. Many people go years, even decades, without being involved in a crash. Although this is a good thing, it also means that when a crash happens, the average person might not know what to expect.
You need to put claimants at ease. They need to know you are handling their claim, what they should expect from the process, and how long the process should take. If claimants don’t receive this information, they may feel confused – they may even start to wonder if the insurer is giving them the runaround on purpose. You need your insurance customers to trust you: transparency is the way you earn trust.
Status Updates Should Be Available on Demand
First impressions are important, but what happens after the claimant has reported the claim and you’ve explained the process? This, of course, is when the claims handler gets to work – but from the claimant’s point of view, it can seem like nothing is happening.
You need to keep claimants in the loop. As their claim cycle continues, you should provide them with regular updates and prompt answers to their questions. They shouldn’t have to wait for normal business hours to play phone tag with their claims handler – their claims status should be available on demand, whenever they want it.
Plain Language Supports Transparency and Communication
Let’s say you’ve explained the claim process to the claimant and you provide easy, 24/7 access to claim status updates – but the claimant is still complaining about poor communication. What’s gone wrong?
The problem might be your vocabulary.
Insurance professionals typically know what FNOL, deductibles, actual cash value, third-party liability, and other common industry terms mean, but your policyholders might not. If you’re using jargon, you might think you’ve explained everything clearly, but the claimant might be more confused than ever.
Using plain language can improve communication. It’s a great way to avoid misunderstandings at every step of the process, resulting in improved claimant satisfaction.
Great News!
The right tech can help you bring your car insurance claims service to the next level. VCA is rolling out a new policyholder app this fall. Sign up now below to receive more information as it becomes available.
