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 actually measuring it.
Claimants Are Dissatisfied
Satisfaction with claims has dropped. According to the 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 nearly three days year over year. Supply chain issues and labor shortages may be at least partly responsible. However, claims professionals can’t put all the blame on outside forces. 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 lead to claims delays and frustration, the exact kind of friction a well-designed claims management system is meant to eliminate.
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 Commissioners and found that more than two in three insurance complaints are about claims handling.
Claims are, by their very nature, a negative experience for policyholders. They’re also a high stakes experience. The claimant is dealing with a loss and trying to recover, and that alone raises the stakes, but it isn’t the only reason. The claimant is also about to find out whether all those premium payments were worthwhile. If insurers don’t step up and make the claim process as painless as possible, restoring the policyholder to whole, that 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 actually want from the claims process?
Research has been done on this topic. Research from Hi Marley found that the biggest drivers of claimant satisfaction are timeliness, communication, process effectiveness, and adjuster attitude. Meanwhile, a survey from Publicis Sapient identified delays, a lack of information, smaller than expected payouts, claim 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 reverse is also true: when the claims cycle gets longer and settlement is delayed, satisfaction drops.
Measuring the time it takes to settle a claim is critical. It helps you see whether your cycle times are improving, how they compare to industry standards, and what’s actually driving the delays you’re seeing, whether that’s a bottleneck at FNOL, a slow assignment process, or claims sitting in a queue waiting on documentation.
Assessing Communication
Good communication is essential too. Hi Marley cited communication as a top factor, and Publicis Sapient cited a lack of information and an inability to reach staff as two key frustrations. Even the complaint about smaller than expected payouts can often be traced back to poor communication and a failure to set expectations early.
Communication is a little harder to measure than time, but a few questions get you most of the way there: how many channels does a policyholder have to reach you, can they reach someone after hours, how long do they wait for a response, is the process clearly explained at the outset, and are updates automated so policyholders hear about progress as it happens rather than having to ask. A claim tracking system that pushes automatic status updates answers most of these questions by design rather than by policy.
Counting Touchpoints
Hi Marley’s research and the J.D. Power study both point to the same sore spot: when claimants have to submit redundant information, frustration builds fast. Policyholders want good communication, but that doesn’t mean they want to be dealing with the claim constantly. Eliminating unnecessary touchpoints is one of the most effective ways to improve claim efficiency, and it creates a better experience for the policyholder while also reducing the claims handler’s workload. This is where mobile claims management and digital claims payments tend to make the biggest visible difference, since they remove entire steps rather than just speeding up the ones that remain.
Using Customer Surveys
If you want to know about your customers’ experience, ask them. Customer surveys are one of the most direct ways to measure satisfaction and identify areas that need improvement. Getting customers to respond can be the hardest part, so keep surveys brief and send them while the experience is still fresh.
The Net Promoter Score is a popular option built around one critical question: how likely is it that you would recommend this brand to a friend or colleague? The results sort respondents into promoters, passives, and detractors. Other surveys ask more questions or leave room for open-ended responses, letting customers write out their opinions and voice specific complaints directly.
Monitoring the Internet
Your internal data can help you measure the claims experience, but it’s worth looking outside your own systems too. When policyholders are unhappy, many turn to the internet to voice it. According to the National Customer Rage Study from CCMC, dissatisfied customers tell roughly twice as many people about their experience as satisfied customers do, and 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 just a few years.
Keep an eye on what people are saying about your company on social media, what reviews are showing up on Google and Yelp, 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
Customer 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’s rarely a coincidence. It may be too late to win back the customers who already left, but you can still identify what went wrong and fix it before it costs you more. Track how many policyholders leave in the months following a claim, whether that churn rate is trending up or down, and what factors correlate with it, like whether customers who leave tend to have had longer than average claims cycles.
Are You Providing a Great Claims Experience?
Every company wants to believe it provides a great customer experience. Feedback from consumers tells a different story more often than most insurers would like. Ideally, you want to identify problems and take corrective action before you’re inundated with bad reviews and watching customers head for the door.
VCA claims management software includes an analytics suite built to help you measure the insurance claims experience across every one of the areas above: cycle time, communication, touchpoints, and churn. You get continual insight to optimize the claims journey rather than guessing at what’s working, whether you’re a carrier, a TPA, or an independent adjusting firm trying to keep every client program on track.
If your claims benchmarks aren’t where you’d like them to be, it may be time to look at your claims management softwareplatform itself rather than just the people running it. Request a demo to see how VCA’s analytics suite could apply to your own claims data.
