3 ways carriers can improve the catastrophe claims experience
Friction during the claims process following a catastrophe can strain customer satisfaction and cause a sharp decline in renewals.
In 2022, hurricanes, windstorms and seasonal catastrophes caused an estimated $165 billion in economic losses. But these catastrophes can also be measured in frustrated, disappointed policyholders at a moment when they need human support the most.
According to the J.D. Power 2023 U.S. Property Claims Satisfaction Study, friction during the claims process following a catastrophe can strain customer satisfaction and cause a sharp decline in renewals.
An insurer’s obligation to policyholders should go beyond indemnity when they’ve experienced a loss. Every loss is an opportunity to deliver on the promise of a prompt, proactive and empathetic claims experience. A solid pre- and post-natural disaster claims strategy can enhance customer satisfaction and enable insurers to leave a lasting positive impression as they help policyholders recover their homes, businesses and lives.
No. 1: Allow customers to reach you on preferred channels.
Communicating with customers via their preferred channel is a best practice within any customer-service function, but especially in a claims operation post-catastrophe, when policyholders are prone to stress and frustration. While many companies try to shorten wait time and resources allocated to fielding phone calls, post-catastrophe isn’t an ideal time to push policyholders to digital communications if that’s not their preferred mode of communication.
According to J.D. Power, denying customers access to phone communications in favor of digital ones like text or email can erode customer satisfaction. Moreover, enabling policyholders to connect with a live representative during a trying situation allows for compassionate support in the wake of catastrophe.
However, digital communications and automation have their place in a claims function, such as for proactive outreach to customers in catastrophe-exposed areas. These streamlined communications can alert policyholders in the projected storm path and provide best practices for mitigating risk. After a catastrophe event, automated communications can also prompt loss reporting to digital and phone channels to expedite the claims cycle. Proactive, analytics-driven policyholder outreach accelerates claims outcomes and builds trust, reducing the chance of litigated claims.
No. 2: Help homeowners prepare for catastrophes ahead of time.
Approximately 85% of U.S. homeowners have homeowners insurance, but only a fraction will review their policy in the next 12 months. Insurers play a key role in making sure policyholders are appropriately protected before catastrophe strikes by:
- Adjusting replacement costs at every renewal to account for inflation and to reduce the risk of underinsurance.
- Educating policyholders on when to update their policies (e.g., after a major remodel, when they’ve invested in a new roof, after purchasing high-value belongings, etc.).
- Educating policyholders on risk mitigation investments to fortify their homes and lower their premiums.
- Guiding policyholders on how to prepare their homes for hurricanes, windstorms, and more.
No. 3: Monitor for damage.
Insurers that leverage aerial imagery after a catastrophe may know of a loss even before a policyholder does. Aerial imagery can be a powerful tool to review homes in the path of a storm and to guide post-even outreach to confirm damage and triage claims.
Insurers can also leverage leak detection devices to keep a small leak from plumbing or appliances from becoming a more severe loss pre- or post-catastrophe. According to the Insurance Information Institute, water damage and freezing caused 24% of homeowners insurance claims in 2021, and were the second costliest type of claim. Water detection devices empower policyholders to better protect their homes and to take a more active role in reducing the severity of claims, which can be exacerbated after natural disasters.
Catastrophes are the time when insurers must demonstrate their expertise, professionalism and care to help customers recover quickly. Doing so can also help mitigate lawsuits, which can spike drastically for insurers post-disaster. By putting the customer first in the claims experience, carriers can improve outcomes for both policyholders and their bottom line.
Cat Reese is chief claims officer at SageSure. Any opinions expressed here are the author’s own.
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