Since customers are central to your success, it makes sense for your claims experiences to be customer centric. Accenture says insurers could lose $170 billion in premiums by 2027 due to poor claims experiences. To stop the post-claim churn, leaders need to figure out how to give claimants the experiences they want.
What Are Insurance Companies Currently Delivering?
The insurance industry is in a race to digitize. Digital claims tools have been a key part of this. According to McKinsey & Company, 60% to 70% of insurers in the U.S. say they are adopting digital claims tools.
However, in the rush to digitize, insurers appear to be losing sight of what claimants actually want from digital experiences. The J.D. Power U.S. Claims Digital Experience Study found that overall customer satisfaction dropped by seven points in 2022. This was the second year of declining satisfaction.
Billions of dollars could be on the line. According to a 2022 report from Accenture, 31% of claimants were not fully satisfied with their auto and home insurance claims experiences over the last two years. When you consider the fact that many dissatisfied claimants switch insurance carriers, a 31% dissatisfaction rate is alarming.
What Do Policyholders Expect?
Clearly, current digitization efforts are not meeting claimant expectations. To improve customer experiences and boost claimant satisfaction rates, you need to understand what claimants want.
- Speed: According to Accenture, 60% of dissatisfied claimants cited settlement speed as an issue. Claimants want their claim settled and their payout issued as fast as possible. Any delays – even if they’re caused by factors outside of the insurer’s control – are likely to bring down satisfaction rates.
- Visibility: According to ValuePenguin, 68% of insurance customer complaints involve the claims process, the most common complaint being an unsatisfactory settlement or offer. Claims handlers apply the terms of the policy to determine the payout, but claimants who don’t know the ins and outs of insurance might not understand why they’re receiving less than they expected and might feel cheated. Although claims professionals can’t always give claimants what they want, they can provide visibility into the process transparency to help claimants understand the outcomes.
- Value: Before insurance leaders invest in something, they want to make sure they’ll receive a good return on investment. Claimants want the same thing – they’ve invested in their insurance by paying monthly premiums; now that they have a claim, they want a return on their investment. This doesn’t necessarily just mean a financial return. In addition to receiving a reasonable claim payout, claimants want reassurance that they’re in good hands: they want their insurer to help them get their life back on track. By helping claimants get through a difficult time, insurers can add value.
How Can Insurance Companies Stand Out?
Technology is a tool – a means to an end; it is not the goal itself. When carriers, MGAs, TPAs, and adjusting firms invest in new technology, they need to focus on technology that will improve customer satisfaction.
Communication is at the heart of how insurance companies can create customer centric claims experiences.
- Claims handlers need to set expectations. Digital tools can be convenient, but if claimants don’t receive the information they need, these tools can become a source of frustration. According to JD. Power, expectation management has become key to customer satisfaction. The 2022 U.S. Auto Claims Satisfaction Study found that satisfaction scores were lower when repair cycle times exceeded three weeks, but the average satisfaction score jumped 71 points when customers were given accurate time estimates beforehand. Even when claims cycle times are long due to factors outside their control, claims handlers can boost satisfaction by keeping communication open and setting expectations.
- Claims professionals need to provide human empathy. Digital tools may seem cold and impersonal. That may be fine for policyholders with minor claims who just need a quick and convenient solution, but claimants going through a difficult time may need some human reassurance. Digital tools should support human claims professionals to deliver an empathetic experience.
- Insurance leaders need to listen. Customer surveys and net promoter scores can provide valuable insights into what claimants expect from insurance experiences.
Insurers Are at a Turning Point
Gartner says insurance digitalization initiatives in 2023 will move away from growing revenue and focus more on improving customer experiences and operational efficiency. The insurers that succeed in providing superior customer experiences stand to boost retention and gain a larger share of premium in the process. Insurers that fail will fall further behind.
VCA provides claims management software that supports customer centric claims experiences. Learn more.
