Dissatisfied customers pose a major risk to future insurance premiums
As more P&C insurers offer insureds the opportunity to file claims online, policyholders have come to expect a speedy and seamless claims experience.
With claims on the rise and becoming more severe, P&C carriers are at risk of losing future premiums as a result of customer dissatisfaction with operational inefficiencies around claims handling. Identifying the major issues and finding practical solutions will be vital to maintaining long-term customer satisfaction.
What keeps P&C claims executives up at night?
A 2022 Accenture survey of U.S. insurers reported that “rising claims dissatisfaction is putting $170 billion in P&C premiums at risk.
According to insurance consultant Patrick Kelahan (The Insurance Elephant), if a claim is not settled in a month, customer dissatisfaction rises to 30%, putting the insured’s future premiums at risk.
“Even if insurance execs realize there is a deficiency in their use of technology, the issue comes down to whether insurers’ customer-facing staff have integration and training programs to keep pace with technology innovation and whether customer education initiatives are helping customers leverage service technology,” said Kelahan.
The need for speed in settling insurance claims
Other factors can also drive claims dissatisfaction, according to Kelahan. Key elements include clunky claim capture and a lack of digital servicing tools.
- Inadequate capture of claims. While customers are generating claims on their insurance company’s website, not enough information is collected, creating a ripple down effect of unnecessary calls between the customer and agent. This defeats the benefit of customer-generated claims.
- The customer gets lost in the claims information shuffle. While insureds want to digitally connect with their insurers, customers still rely on phone-based insurance agents for support. Since the status of claims investigations are currently not available online, insurance agents do not always have the same access to the information shared with insureds. This can lead to miscommunication between the customer and the insurance agent.
- AI and machine-learning models still need to mature. While many organizations are adding customer-friendly applications such as chatbots, rich text messaging and guided scripting, many insurance companies’ AI models haven’t had sufficient analysis experience for machine learning to produce accurate outcomes compared to humans. The models will need to mature more fully in order to truly improve the claim settlement process.
- Virtual estimates are powerful tools but still lack the ability to provide a comprehensive claims resolution to customers. Virtual estimating methods are effective in providing a settlement, but they are not comprehensive enough in damage capture. If there are issues with the original settlement, resolution often cannot be handled virtually, creating more delays and resulting in dissatisfaction.
In the end, the insurance business is all about paying claims.
“From my experience in insurance, claims people are all well-intentioned,” said Bryan Falchuk author of The Future of Insurance. “They want to pay claims and help insureds get back on their feet again. With all the constraints and headwinds facing claims operations today, the interface between tech, employees, and customers can be difficult to navigate. The best way to solve these problems is to build a community of experts and explore workable solutions.”
“With all the tech disruption in claims operations today, there is no one right answer and no one individual with all the answers,” said David Gritz, co-founder and co-manager of InsurTech New York. “The most effective way to learn what works and what does not is to share experiences with other P&C claims executives and build a community of peers where innovative ideas can bubble up.”
Indeed, when the right people get together, magic happens.
Phylip Jones is the head of business development for Auriemma Roundtables, which has connected consumer finance companies to help optimize operations and is creating a business intelligence network for claims executives in the P&C industry. Contact him at pjones@roundtables.us.