New research shows customers want claims resolved quickly

For most insurers, the claims experience is an opportunity to highlight their value to policyholders. However, technology is changing how that process is handled as well as customers’ expectations of insurance in general.

While not traditionally viewed as rapid technology adopters, for many insurers the pandemic and the emergence of insurtechs have encouraged a more rapid technological evolution in the industry. Technology now plays a significant role in selling insurance (think online companies like Lemonade, Next, and Corvus Insurance) and binding policies. It’s made it easier for policyholders to comparison shop by price and coverage, follow their claim through the process, and in some cases, get paid more quickly.

Companies like Amazon and the ease with which consumers can order or find anything on a mobile device have changed delivery expectations for many products. A new study from Sprout.ai surveyed over 1,000 consumers who had purchased an insurance policy in the last two years and found that 21% expect their claims to be resolved in hours. Interestingly, they also found that 100% of the 18-24-year-olds surveyed expected their claims to be resolved within a week. The survey showed the reality to be slightly different with 43% of the survey participants sharing they waited over two weeks for their claims to be resolved across multiple lines of insurance.

Insurance has long been a business that values relationships, however, the study found that nearly half of the respondents who have purchased from traditional brands would consider buying insurance from a challenger brand. One-third of the respondents said they already purchase their coverage from both traditional insurers and challenger brands.

The research showed a definite correlation between customer service and customer loyalty with 62% of the claimants reporting a “good” or “very good” experience with their insurers and choosing to remain clients of those companies. Alternatively, of those who had a “bad” or “very bad” experience, only 19% were still customers of their insurer and 89% said they would use another company in the future.

In a press release, Sprout.ai CEO Roi Amir said, “Insurance companies should be laser-focused on customer experience — as measured by transactional net promoter scores (tNPS) — but have traditionally been slow to recognize rapidly evolving consumer expectations, particularly when it comes to the claims process. The relationship between customer service and loyalty is particularly prevalent amongst younger people who are less loyal to traditional insurers and are switching to digital challenger brands. Traditional insurance providers hold the lion’s share of the market for now, but need to focus on automating their claims process or risk losing out to digital-first competitors.”

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