You might think I’m preaching to the choir. Insurers always shout about their claims propositions and how they achieve superior results for clients compared to their peers in the market. I’m not disputing that this has always been a focus and a priority. Rather, I’m saying that, today, claims need to be more in focus than ever before – and here’s why.
Macroeconomic pressures such as inflation, a rising interest rate environment, ongoing supply chain disruptions (caused by the COVID-19 pandemic) and labor shortages are causing challenges for both personal and commercial insurance buyers. This follows years of relatively difficult market conditions, where many policyholders have to pay more to secure adequate (or in the case of complex commercial risks, often inadequate) insurance coverage.
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Nowadays, there is no guarantee that policyholders will be satisfied with the price of their insurance, or the coverage they have managed to obtain. The only thing that insurers can more or less guarantee is the experience of their policyholders in the claims process. This is one element of insurance where companies can really differentiate themselves.
Of course, no one wants to have a claim. But if a policyholder’s experience with their claim is smooth and they get the support they need (both practically and emotionally) through the process, then they are more likely to reach a favorable outcome for their insurer, along the lines of: “Something bad happened, and my insurer fixed it … with little stress.”
This result is significant after several years of difficult market conditions characterized by rate hikes, coverage limitations and a handful of “NO’s” from underwriters. The tough market didn’t do the industry any favors, but I believe insurers with successful claims operations will be the ones to repair relationships 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 who strike this balance, 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, police officers today expect an efficient virtual claims process through which they can access the benefits of human and technological support through a digital channel. During COVID-19, policyholders couldn’t always welcome loss 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 efficiency and accuracy in claims handling while reducing costly errors. This will result in a superior claims experience, which will come with other additional benefits. For example, a better operations in the claims department is likely to drive higher levels of customer satisfaction and increased brand loyalty, thus helping in customer retention and acquisition. Again, this reinforces why I think claims should be a top priority for insurers today.
Claims are the beating heart of the insurance promise. If insurers can deliver on that promise fully, quickly and sensitively, they will set themselves up for success.