You might think I’m preaching to people. Insurers are always shouting about their claims proposition and how they achieve superior results for customers compared to their peers in the market. I don’t dispute that this has always been a focus and a priority. Rather, I’m saying that claims need to be in focus today more than ever – and here’s why.
Macroeconomic pressures such as inflation, a rising interest rate environment, continued supply chain disruptions (caused by the COVID-19 pandemic) and labor shortages are creating challenges for both personal and commercial insurance buyers. This follows years of relatively tough market conditions, with many policyholders having to pay more to secure adequate (or in the case of complex commercial risks, often inadequate) insurance cover.
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Nowadays, there is no guarantee that policyholders will be satisfied with the cost of their insurance or the coverage they have been able to obtain. The one thing insurers can pretty much guarantee is their policyholders’ experience with the claims process. This is one element of insurance where companies can really differentiate themselves.
Of course, no one wants to be pretentious. But if the policyholder’s experience with their claim is smooth and they get the support they need (both practical and emotional) through the process, then they are most likely to reach a favorable conclusion for their insurer along the lines of: “Cases something bad happened, and my insurer fixed it … with little stress”.
This result is important after several years of tough market conditions characterized by interest rate hikes, coverage restrictions and a series of insurer “NO’s”. A tough market is not conducive to the popularity of the industry, but I believe that insurers with successful claims will be the ones to mend the relationship the fastest.
So what makes a successful claims operation? It’s all about finding the right balance between the human touch (critical thinking, analysis, social interaction and empathy) and technology (digital first loss notification, data analytics, automation and digital processing). Insurers that strike this balance while adjusting claims quickly and staying true to their promise to protect policyholders from financial loss will have a successful claims operation.
After two years of pandemic conditions, policyholders today expect an efficient virtual claims process through which they can access the benefits of human and technology support through a digital channel. During COVID-19, policyholders weren’t always able to welcome claims adjusters into their homes or businesses due to pandemic restrictions, so the value of virtual and video-driven claims processes really shined.
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By combining a virtual claims process with advanced data analytics capabilities, insurers can increase claims processing efficiency and accuracy while reducing costly errors. This will result in a superior claims experience that will come with other added benefits. For example, a best-in-class claims operation is likely to result in higher levels of customer satisfaction and increased brand loyalty, thus helping with customer retention and acquisition. Again, this reinforces why I believe claims should be a top priority for insurers today.
Claims are the heart of the insurance promise. If insurers can deliver on this promise fully, quickly and empathetically, they will be setting themselves up for success.