The Importance of Measuring the Insurance Claims Experience

Do you offer a positive claims experience? You may think you do. After all, your company has probably poured a lot of time and resources into the claims experience, so it should be good – right? Not necessarily. The claims experience needs to be satisfying from the claimant’s perspective, and you can’t know that without measuring the insurance claims experience.

Claimants Are Dissatisfied

Satisfaction with claims has dropped. According to the 2022 U.S. Property Claims Satisfaction Study from J.D. Power, overall satisfaction reached a five-year low. Longer cycle times appear to have been a factor, and the average time needed to have repairs completed increased by 2.9 days over the last year. Supply chain issues and labor shortage may be at least partly responsible. However, claims professionals can’t put all the blame on others. Another issue was that new digital processes often required redundant steps that slowed down the process, for example, submitting a photo but then still having to schedule an in-person inspection. These redundancies may lead to claims delays and frustrations.

The simple truth is that claimants may be predisposed to dissatisfaction. It’s not because claimants are unreasonable or looking for reasons to complain. It’s just that claimants are going through a difficult experience, and they want fast solutions and clear answers. When they don’t get what they need, dissatisfaction follows. It’s not surprising that ValuePenguin looked at complaint data from the National Association of Insurance Commissions and found that more than two in three of all insurance complaints are about claims handling.

Claims are, by their very nature, a negative experience for policyholders. Claims are also a high-stakes experience for the claimant. The claimant is dealing with a loss and trying to recover. That’s one reason the stakes are high, but it’s not the only reason. The claimant is also about to find out whether all the premium payments that they’ve paid have been worthwhile. If insurers don’t step up and make the claim process as painless as possible and make the policyholder whole again, the policyholder may decide to try their luck with another insurer.

What Makes a Positive Claims Experience?

Before you can start measuring the claims experience, you need to figure out what, precisely, to measure. What do policyholders want from the claims process?

Research has been done on this topic. According to research from Hi Marley, the biggest drivers of claimant satisfaction are timeliness, communication, process effectiveness and adjuster attitude. Meanwhile, a survey from Publicis Sapiens identified delays, a lack of information, smaller than expected payouts, claims denials and an inability to reach staff as the biggest frustrations.

Time to Settlement

Time to settlement is arguably the most critical KPI for claims satisfaction. When the claims cycle gets shorter, claimant satisfaction tends to increase. The reserve is also true. When the claims cycle gets longer and the settlement is delayed, satisfaction drops.

Therefore, measuring the time it takes to settle an insurance claim is critical. This data can help you see if your claims cycle times are improving and to compare your numbers against the industry standards.

  • What is the average claims cycle length?
  • What are the common causes of delays?

Assessing Communication

Good communication is also essential. Hi Marley cited communication as a top factor, and Public Sapiens sited a lack of information and an inability to reach staff as two key factors. Even the complaint of smaller than expected claims could be linked poor communication and a failure to set expectations.

Communication can be a little harder to measure than time, but there are key questions to consider.

  • How many communication channels are available to policyholders?
  • Can policyholder reach someone 24/7?
  • How long do policyholders have to wait for a response?
  • Is the claims process clearly explained at the beginning?
  • Is communication automated so policyholders receive updates as they occur?

Counting Touchpoints

Hi Marley says that claimants care about having an effective claims process. The J.D. Power study also showed that this can a sore point. If customers have to submit redundant information, they can get frustrated fast.

Policyholders want good communication, but this doesn’t mean they want to have to deal with the claim non-stop. Eliminating unnecessary touchpoints is a great way to improve claim efficiency. That creates a better experience for the policyholder. Efficient claims systems also reduce the claims handler’s workload.

Using Customer Surveys

If you want to know about your customers’ experience, ask them. Customer surveys can be a good way of measuring satisfaction and identifying areas that could use improvement.

There are different ways to go about customer surveys. Getting customers to respond can be the most challenging aspect, and to help with this, surveys should be kept brief. They should also be timely, so customers complete them when the experience is still fresh in their minds.

The Net Promotor Score is a popular option that’s based on a critical question: How likely is it that would recommend this brand to a friend or colleague? The results can be used to identify your brand’s promoters, passives and detractors.

Other surveys may ask more questions or even allow for open-ended responses where customers can write out their opinions and voice specific complaints. HubSpot has more information on customer satisfaction survey best practices.

Monitoring the Internet

Looking at your company’s internal data can help you measure the insurance claims experience, but you may want to look outside, as well.

If policyholders are unhappy with the claims experience, they may turn to the internet to voice their displeasure. According to the 2020 National Customer Rage Study from CCMC, dissatisfied complainants tell twice as many people about their experience as satisfied customers do, and 17% want to raise public awareness of their negative experiences. More and more, these dissatisfied consumers turn to digital channels to air their grievances. In 2017, only 12% of complainants used digital channels. In 2020, 43% did.

  • What are people saying about your company on Facebook, Twitter, TikTok and other social media sites?
  • What are reviews are people leaving on Google, Yelp and other review sites?
  • What common complaints crop up again and again?

Customer Churn

Customer churn can also indicate a problem with your claims experience. If a high number of policyholders leave after a claim, something is clearly wrong. Although it may be too late to convince those customers to say, you can take action to identify what went wrong and make changes before you lose even more customers.

  • How many policyholders leave in the months following a claim?
  • Is customer churn increasing?
  • What factors can be linked to customer churn? For example, do customers who leave tend to have longer claims cycles?

Are You Providing a Great Claims Experience?

Every company wants to believe they provide a great customer experience. However, feedback from consumers shows that this simply isn’t the case. Ideally, you want to identify problems and take corrective action before you’re inundated with bad reviews and your customers start to flee.

VCA software includes an analytics suite to help you measure the insurance claims experience. You receive continual insights to optimize the claims journey. Request a demo.

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