Consumers buy insurance for a variety of reasons, ranging from property protection to a perceived investment in maximizing claim payments in case a hazard should occur. Either way, if and when disaster strikes, policyholders hope your company will be there to soften the blow.
While "softening the blow" is the end goal, a report from Bain & Companyshows that the claim experience makes or breaks the customer relationship. You either have a customer for life or a disgruntled policyholder who is open to a pitch from a rival carrier.
Not surprisingly, the J.D. Power 2014 Property Claims Satisfaction Studyfound that when insurance companies effectively communicate with claimants, those claimants are less likely to escalate their claim to a supervisor. When a supervisor becomes involved, overall customer satisfaction drops by more than 160 index points.
Building on these findings, here are five ways insurers can proactively "claim" customer loyalty by facilitating superior claims experiences:
1. Proactive notification: When disaster is imminent, policyholders appreciate receiving a heads up from their insurers with a phone number to call to file a claim. Plan to post warnings to social media, send text messages and emails, and consider using robo-dialers to deliver phone alerts. In severe cases, you may even want to broadcast television and radio announcements in the affected areas, or fly banners via single engine aircraft as appropriate.
2. First report of claim: Consider using call services to personally take first reports of a claim, help with compiling a contents inventory, and answer initial questions by phone, rather than asking claimants to complete their own forms, potentially delaying the process. This starts the claim process on a positive note with timely communication. Also consider using third party phone support services for field adjusters to offload the sometimes tedious task of creating contents inventories so they can focus on structure or other customer aspects of their job.
[Previously from Enservio: 3 ways insurers can capture and retain millenials]
3. Escalate claim response: Look for new ways to respond to claims faster. Some companies use telephone adjusters. Others use staff adjusters to inspect the damage onsite, write an estimate and leave a check – all in one visit. As an alternative to paper checks, consider issuing preloaded debit cards to speed the payment process when banks and ATM machines may not be readily available.
4. Streamline contents claims: Contents claims can be burdensome, typically requiring the insured to submit itemized lists and receipts. But what if you didn't require every receipt? Is it possible that the uptick in policyholder retention would offset any additional payments you may incur? Another alternative is to send trained professionals onsite to prepare detailed and potentially more accurate content inventories upfront, sparing your customers the stress during an already difficult time.
5. Use Big Data for Precision: More and more carriers are turning to big data applications to get a handle on what's inside people's homes. Aggregated data on zip codes, income, number of occupants and their ages, can tell you a lot about whether the home is filled with sports equipment or high-end electronics, for example. Big data can tell you about previous settlements in the neighborhood, and the average retail value of individual items as a means of flagging questionable claims. The end goal is greater accuracy with everyone benefiting from faster settlements and lower premiums.
The J.D. Power study also found that if the settlement terms are provided to the claimant within one day of first notice of loss, only 6% of customers escalate the claim. The rate of escalation increases to 13% if the claimant is informed within one week and increases to 18% if it takes more than one week.
As an industry, insurance has taken major steps forward in the quest for customer-first advocacy and policyholder retention.
About the Author: Christine Washburn is Senior Vice President, Marketing for Enservio.