Can your claims department add value to your product? Do people truly buy based on how your claims department functions? The answers to these questions depend on the metrics you utilize to measure performance in your claims department.
When someone is looking to buy insurance, do they really look to those things you measure? There is no question the failure to process a claim in a timely, fair manner (in the eyes of the insured) will be used as a reason to look elsewhere. But, when it comes time to buy, does a prospective insured care or even know about how your claim department has a 105 percent closing ratio, or that the average paid by line of business is down this year over last year, or that the average claims duration is 5 percent below industry average? I doubt it.
While the purchase of personal lines coverage is driven by price, this is not necessarily the case in commercial and professional lines. Instead, insurance buying decisions, just as most B to B decisions, are substantially impacted by product quality supported by a sustainable competitive advantage.
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