We live in a 2.0 world - from the array of social networking sites to the vast power of the Internet, technology is constantly evolving and impacting the way we do business. In the insurance world, advancements in technology mean more opportunities to enhance the claims experience for customers and carriers alike. A major part of this enhanced experience is due to innovations in contents claims, or Contents 2.0.
The State of Contents Claims Today
The current contents claims process often leaves insureds feeling confused and overwhelmed when faced with a loss since property owners are generally responsible for conducting content inventories themselves. Carriers are then left with incomplete or inaccurate contents inventories. Carriers also lack systems, data and analytical capabilities for accurately determining the valuation of lost items. Additionally, the contents replacement options available for insureds through carriers are generally limited to wholesalers who might not have the brands they want or need.
Furthermore, settlements are issued through checks to the claimant. Although this seems like a natural step, this process is problematic in that it's costly to carriers and difficult for insureds who often have a pressing need for funds. Additionally, if the insured has a supplement to the claim, subsequent checks need to be issued--costing carriers more money and holding up the process for the claimant.
The end result is an unpleasant customer experience for the insured, often at a time of crisis when they need the best service possible from their insurance provider. Carriers also lose out due to delays in the claims process and inaccurate contents valuations.
Thankfully, there are new contents claims technologies and comprehensive solutions available that alleviate these pains. The payment process particularly is benefitting from such solutions - moving away from checks toward a system of pre-paid debit cards.
The Contents 2.0 Way - Plastic Makes Perfect
Pre-paid debit cards are an ideal solution for the pitfalls of the current check settlement system. As mentioned previously, transactions costs around each check are significant, often with multiple checks per claim. Claims can also be held up due to financial institution check processing and approval requirements. Cards, on the other hand, are significantly less costly to produce and reload - reducing wait times and eliminating the need for a bank account. Insureds also have the freedom to use the card in actual stores, not just online. Insureds can even use the cards to withdraw cash from ATMs if they decide it is cash they need rather than a particular replacement item.
Research has shown that consumers actually prefer the use of a card and online shopping platform in the replacement process instead of a check. It's easy to understand why. Pre-paid debit cards in conjunction with an online shopping platform provide the insured with flexibility and options for personal choice that aren't possible with paper checks. Insureds can use an electronic list of their lost contents in a discounted online shopping environment and receive their settlement on a prepaid debit card.
A Winning Scenario
There are clear benefits to carriers when utilizing pre-paid debit cards in conjunction with online shopping environments. This approach makes the replacement process easier and faster for insureds who have experienced a loss. These portals are a one-stop shop - offering comprehensive selections from participating merchants in addition to benefits like exclusive deals and coupons. Another benefit is the ability to add supplements directly on to the same card, with no need to reissue.
The sites are convenient and secure for claimants, allowing them to check their balances and purchase history, and offering flexible solutions like dual activation. For example, in the event that a husband and wife are divorced, dual activation allows for safeguards against unequal distribution of funds.
Both the online shopping environment and the pre-paid debit cards integrate seamlessly with existing carrier methods. There are easy, multiple activation methods and significant reporting available. Most importantly, no system changes are required.
For these reasons and more, the time for Contents 2.0 has arrived.
Jon McNeill is the CEO of Enservio, which provides software and services to property insurance carriers and their policyholders nationwide for contents inventory creation, valuation, analytics and elective replacement.
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