The Importance of Measuring the Insurance Claims Experience

Do you offer a positive claims experience? You may think you do. Your company has probably put a lot of time and money into the claims experience, so it should be good, right? Not necessarily. The claims experience has to be satisfying from the claimant's point of view, and you cannot know that without measuring it.

Claimants are dissatisfied

Satisfaction with claims has fallen. The J.D. Power U.S. Property Claims Satisfaction Study recorded overall satisfaction at a five year low, with longer cycle times a contributing factor and the average time to complete repairs up by nearly three days year over year. Supply chain problems and labour shortages were part of it. Claims professionals cannot put all the blame on outside forces, though. Another finding was that new digital processes often introduced redundant steps that slowed the claim down, such as submitting a photo and then still having to schedule an in-person inspection. That kind of friction is exactly what a well-designed claims management system is meant to remove.

The plain truth is that claimants may be predisposed to dissatisfaction. It is not that they are unreasonable or looking for reasons to complain. They are going through a difficult experience and they want fast solutions and clear answers. When they do not get them, dissatisfaction follows.

It is no surprise, then, that ValuePenguin's analysis of National Association of Insurance Commissioners complaint data found that more than two in three insurance complaints are about claims handling.

Claims are, by their nature, a negative experience for policyholders. They are also a high-stakes one. The claimant is dealing with a loss and trying to recover from it, and that alone raises the stakes, but it is not the only reason. The claimant is also about to find out whether all those premium payments were worth making. If insurers do not make the process as painless as they can, and restore the policyholder to whole, that policyholder may decide to try their luck elsewhere.

What makes a positive claims experience?

Before you can measure the claims experience you need to decide what to measure. What do policyholders actually want from a claim?

Research from Hi Marley found that the largest drivers of claimant satisfaction are timeliness, communication, process effectiveness, and adjuster attitude. A survey from Publicis Sapient identified the opposite side of it: delays, a lack of information, smaller than expected payouts, claim denials, and an inability to reach staff were the frustrations claimants named.

Those two lists give you four things worth instrumenting: how long the claim takes, how well you communicate, how many times you make the claimant do something, and what they say about it afterwards.

Time to settlement

Time to settlement is arguably the most important measure of claims satisfaction. When the cycle gets shorter, satisfaction tends to rise. The reverse holds too: when settlement is delayed, satisfaction drops.

Measuring how long it takes to settle a claim is therefore not a reporting chore. It tells you whether your cycle times are improving, and it tells you what is driving the delays you are seeing, whether that is a bottleneck at first notice of loss, a slow assignment process, or claims sitting in a queue waiting on documentation. The claims processing workflow breakdown covers where each of those delays is created and where it can be measured.

Assessing communication

Good communication matters just as much. Hi Marley named communication as a top factor, and Publicis Sapient named lack of information and inability to reach staff as two of the main frustrations. Even the complaint about smaller than expected payouts often traces back to poor communication and expectations that were never set.

Communication is harder to measure than elapsed time, but a few questions get you most of the way there. How many channels can a policyholder use to reach you? Can they reach someone outside office hours? How long do they wait for a response? Is the process explained clearly at the outset? Are updates pushed automatically, so policyholders hear about progress as it happens rather than having to ask? A system that sends status updates on its own answers most of those by design rather than by policy.

Counting touchpoints

Hi Marley's research and the J.D. Power study point at the same sore spot: when claimants have to submit the same information twice, frustration builds fast. Policyholders want good communication, but that does not mean they want to be dealing with their claim constantly.

Removing unnecessary touchpoints is one of the more effective ways to improve claim efficiency, and it improves the policyholder's experience while reducing the handler's workload at the same time. The steps worth attacking first are the ones that exist only because information was captured in the wrong place, or not captured at all.

Using customer surveys

If you want to know about your customers' experience, ask them. Surveys are the most direct way to measure satisfaction and find what needs work. Getting people to respond is the hard part, so keep the survey short and send it while the experience is still fresh.

The Net Promoter Score is a popular option built around one question: how likely is it that you would recommend this brand to a friend or colleague? The answers sort respondents into promoters, passives, and detractors. Other surveys ask more, or leave room for open-ended responses so customers can write out an opinion and name a specific complaint.

Monitoring the internet

Your internal data can measure much of the claims experience, but it is worth looking outside your own systems too. When policyholders are unhappy, many of them say so in public.

The National Customer Rage Study from Customer Care Measurement and Consulting found that dissatisfied customers tell roughly twice as many people about their experience as satisfied customers do, and that a meaningful share want to raise public awareness of the problem. Digital channels have become the preferred outlet for that frustration, with the share of complainants using them roughly tripling over a few years.

So watch what people say about your company on social media, which reviews are showing up in search, and which specific complaints keep resurfacing. A pattern that shows up across dozens of reviews is worth more than any single angry comment.

Customer churn

Churn is one of the clearest signals that something is wrong with your claims experience. If a high number of policyholders leave after filing a claim, that is rarely a coincidence.

It may be too late to win back the customers who already left, but you can still find out what went wrong and fix it before it costs you more. Track how many policyholders leave in the months following a claim, whether that rate is trending up or down, and what correlates with it, such as whether the people who leave tend to have had longer than average cycle times.

Frequently asked questions

What do claimants want from the claims experience?

Research from Hi Marley found that the largest drivers of claimant satisfaction are timeliness, communication, process effectiveness, and adjuster attitude. A Publicis Sapient survey found the frustrations claimants named were delays, a lack of information, smaller than expected payouts, claim denials, and an inability to reach staff. Together those point to four things worth measuring: how long the claim takes, how well you communicate, how many times you make the claimant do something, and what they say about it afterwards.

Why is time to settlement such an important claims metric?

Time to settlement is arguably the most important measure of claims satisfaction: when the cycle gets shorter, satisfaction tends to rise, and when settlement is delayed, satisfaction drops. Measuring it tells you whether your cycle times are improving and what is driving the delays you see. The cause may be a bottleneck at first notice of loss, a slow assignment process, or claims sitting in a queue waiting on documentation.

How can insurers measure claims communication?

Communication is harder to measure than elapsed time, but a few questions cover most of it. Useful checks include how many channels a policyholder can use to reach you, whether they can reach someone outside office hours, and how long they wait for a response. It also helps to check whether the process is explained clearly at the outset and whether updates are pushed automatically, so policyholders hear about progress as it happens rather than having to ask.

Are you providing a good claims experience?

Every company wants to believe it does. Customer feedback tells a different story more often than most insurers would like. Ideally you find the problem and act on it before you are fielding bad reviews and watching customers head for the door.

VCA Insights, the platform's analytics and reporting add-on, reports on the areas above from the claim records themselves: cycle time, touchpoints, and the movement of claims through each stage, for carriers, TPAs, and independent adjusting firms alike. Once those are standing numbers rather than a research project, the claims KPI set is the place to decide which of them each team should be watching.

If your claims benchmarks are not where you would like them, it may be the platform rather than the people running it. Request a demo to see how the reporting would apply to your own claims data.