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Insurance Claim Cycle Times: Why Policyholders Are Frustrated

Insurance companies are failing to keep up with claimant expectations. That’s the takeaway from two recent studies, one by J.D. Power and the other by Publicis Sapient. Claim delays are frustrating policyholders, and that’s bad news for any insurer that’s worried about insurance customer retention after a claim.

The J.D. Power Study

The J.D. Power 2022 U.S. Property Claims Satisfaction Study found that overall satisfaction scores had reached a five-year low. It wasn’t just a matter of a few insurers bringing down the averages, either. Nearly all insurers experienced a drop in satisfaction scores.

There are a few reasons for this decline, but it largely comes down to slower claims cycle times. Policyholders want their claims to be resolved fast, but the study found that the average time needed to have repairs completed was 17.8 days, an increase of 2.9 days compared to the previous year. Increasingly complicated claims processes and communication challenges also played a role.

Claimants who used fully digital channels experienced shorter cycle times and high satisfaction scores. However, some claimants ran into frustrations when using digital channels, especially when they submitted photos but then still had to arrange for an in-person inspection. This redundancy resulted in slower cycle times, processes that seemed more complicated and scores that were 47 points lower.

The Publicis Sapient Study

In case you needed more evidence showing that claimants are frustrated with slow processes, there’s another study from Publicis Sapient.

The survey found that auto insurance claimants are most frustrated with delays in claims payouts, a lack of information about claims progress, smaller than expected claims payouts, claim denial and an inability to reach claims professionals.

Many of these problems come down to two key issues: long cycle times and a lack of communication. Claimants are unhappy when it takes too long for their claim to be resolved and a payout processed. They also get angry when they can’t reach their claims adjuster or don’t understand how the claim is progressing. Even issues like a smaller than expected payout or denial might be mitigated with better communication to help the claimant understand the reasoning behind the decision.

The Solution to Claimant Frustration

Low claimant satisfaction is a problem that can easily result in higher customer churn. The solution lies in technology that improves the claims process, but it’s important to embrace the right technology and claims systems, not just technology for technology’s sake.

We’ve seen that the insurance industry is embracing digital tools, and these tools can improve the policyholder experience and the claims process. However, these recent studies show that simply having an app or other tech tool doesn’t necessarily translate into higher claimant satisfaction. In fact, when applied in a way that’s disorganized, these tools can actually increase complication and add to frustrations.

Insurance companies and claims handlers need to rethink their approach to claims management. It’s time to embrace an efficient, streamlined approach, and the system you use can make a big difference.

  • The right claims management software can improve communication by automating updates and alerts and by providing claimants with the ability to message their claims handler or access their claim status anytime. This helps manage expectations and lets claimants feel in control.
  • The right claims management software can also facilitate a faster resolution and immediate digital payment. This directly addresses what’s arguably the biggest claimant complaint – claim delays.

Do you want to see how much an investment in state-of-the-art claims management software could end up saving your company? Request the VCA Software cost benefit analysis.

Also, be sure to download our new white paper: “How Technology Can Dramatically Improve Claims Experience and Policyholder Satisfaction.”

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