Insurers may be pleased to hear that 86 percent of insurance customers who submitted a claim within the past two years were satisfied with the way it was handled. However, they will be less happy to learn that of those who submitted claims, 41 percent are still likely to switch to another insurer within the following year.
This data comes from a recent study by Accenture, which surveyed almost 8,000 automobile and home insurance customers across 14 countries. Results indicate that policyholders expect higher levels of service and are willing to exchange personal data in order to receive it.
“While a customer who is dissatisfied with the way his or her claim was handled is almost certain to defect, a satisfied customer will not necessarily remain loyal,” says Michael Costonis, managing director in Accenture’s insurance industry practice and global head of claims services, in a news release. Insurers must provide a differentiated claims experience that delivers exceptional service and maintains appropriate financial discipline.
Costonis explains that merely the act of filing a claim increases the likelihood that a customer will transfer, regardless of how happy they are with the handling process. Survey results indicate that customers who submitted a claim within the two-year timeframe were almost twice as likely to switch insurers within the following year as those who did not submit a claim.
The speed of settlement and transparency of the process are the most critical contributors to customer loyalty. Each was cited by 94 percent of respondents as a key component of claims processing interactions.
Customers have certainly altered their expectations for service, but they are also willing to help improve it by sharing personal data describing their homes and cars. Respondents were open to providing information on the condition of their cars (56%), driving habits (52%), and GPS locations (39%). Three-quarters of homeowners indicated they would share information collected by smoke, carbon monoxide, humidity, and motion detectors; and more than one-third would share footage from security video cameras.
More than three-quarters (77%) said they would share information in exchange for lower premiums; and more than half (59%) would do so to speed up the claims process. Almost 30% would share their data to receive personalized recommendations that may help them better manage risk and avoid loss.
“Customers are willing to share information, and insurers that are able to use this information to help customers manage risks and reduce the number of claims will not only lower claims costs but may gain an advantage in terms of customer loyalty,” said Thomas Meyer, managing director of Accenture’s insurance industry practice in Europe, Africa, and Latin America, in the release.
Insurers should consider how connected devices and other digital technologies could help customers better manage risk and reduce the frequency of their claims, says Costonis. Two-thirds of customers said they would prefer using digital channels to check claims status. Half said they would never recommend an insurer that did not offer digital channels, and 44 percent would leave insurers that lacked digital offerings.
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Kelly Sheridan is Associate Editor at Dark Reading. She started her career in business tech journalism at Insurance & Technology and most recently reported for InformationWeek, where she covered Microsoft and business IT. Sheridan earned her BA at Villanova University. View Full Bio