Policies come, policies go, but a bad claims experience will always hurt me

I have heard a lot recently from people (as “customers”) who “have never really experienced a claim before” and “so it doesn’t really bother me what their claims experience is like” being the obvious conclusion they draw. I think that’s mostly a false premise, I think there’s only truth in it because insurers have typically failed to sell their insurance properly and form meaningful relationships. Instead what we buy is a notion of “risk cover” and a competitive price. My view is that this is entirely the problem. 

So why are insurers still struggling to make claims an opportunity, the moment where they come to our rescue, help us in some of our worst life moments, turning what seems like a process of rejection into one that’s about resolution?

Let’s start with some industry data, I know, I know there are possibly better starting points, but hear me out. According to GlobalData Plc ’s report UK Personal Insurance Claims 2022, Around 15% of motor, home, and travel insurance customers made a claim in 2021, with this figure rising to over 30% in the pet line. Of these claims, across all four lines over 80% were accepted. Pretty good, but not at all people’s perception.

To quote the Chartered Insurance Institutes paper titled Public Trust in Insurance A relationship that is purely transactional won’t cut it. Customers are happy with the speed and ease of transactions (although they would move if someone came up with a faster, easier process): it’s the underpinning loyal, trusting relationship they really value.

The moment of truth is undoubtedly when you make a claim, which is arguably the most ecosystem driven set of experiences within the overall lifecycle of insurance.

As a recent “victim” of the car insurance industry in crisis I recently settled a four month claims experience for reasonably minor body damage, not at fault this was arguably as straightforward as it could be. As soon as notification of loss (eFNOL) was submitted, and the initial assessment clarified, everything thereafter from the insurer dropped away. We were in no-persons-land wandering around navigating endless calls from repair garages who had no idea what they were facing, asking us a lot of data sensitive questions (which several times we refused to answer given we had no way of validating the source). These typically ended in “no, we can’t do body repairs''.

Exhausted and confused, eventually a garage was booked months in advance. Still with no idea of the insurers stance on this, or what was expected we muddled through to an outcome which was far from even remotely satisfactory. Down to even being asked to make an excess payment transfer to the garage with no idea this was the correct amount or procedure, when I say the insurer disappeared I mean they couldn’t even pick up calls in less than 20 minute wait times.

And I get told all the time “you were lucky”, in some sort of weird adaptation of a four Yorkshiremen sketch. Only this isn’t funny, people are greatly affected, unable to get to jobs, missed school events and family plans left in tatters. Renewing with this insurer isn’t going to happen for me, obviously, but realistically I am left with a terrible set of choices. I love this industry, but we must do better, and some of this is really basic to solve.

We know that claims transformation drives huge amounts of change:

• Self-serve,digital experiences: Offer real-time claim information, digital appointment selection, cash settlement options, and more to insureds, agents, and brokers
• Automated claims management and settlement: Handle everything from claim segmentation to payment processing, ensuring a seamless experience
• Improved claimant experience: Nurture your customers through their unique claims journey with personalised support
• Enhanced adjuster experience and productivity: Automate simple claims and partially automate complex cases to boost efficiency

And if that wasn’t enough, what about the risk mitigation implied in this:

• System-enabled specialization optimizes staffing/indemnity spend dynamic
• Fast-track to segregate claims handling by size/complexity of claim
• Improved assignment and control
• Automated decision support
• System-assisted workflow management frees adjusters to focus on adjusting rather than system admin
• Once and done inquiry resolution
• Access to policy and eligibility information
• Real-time visibility into all aspects of claims process enables proactive management oversight

And that’s before we dig into the ever popular AI and Automation topic fully. Straight-through processing a claim, with fully baked in fraud detection and complete digital experiences makes a lot of sense. We weren’t in a complex claim, it just needed communication and guidance, the same I get every time I order something of high-value or that needs a signature and some specificity. The customer logistics of a claim is much the same. Progress, choices and pro-activity go a long way.

The moment of truth is undoubtedly when you make a claim, which is arguably the most ecosystem driven set of experiences within the overall lifecycle of insurance.

It’s when immediacy of support and engagement are critical...

Where supply chains need orchestration...

Where fraud detection tooling kicks in...

Where 3rd party data sources make it seamless or valedictory...

And where you ideally need to focus on providing human care at the right time and place...

Making this understood, making it part of the proposition and what people ultimately buy will also be critical in this next stage where we will see embedded, risk-removing, adaptive and human-centric insurers emerge. Utilising the technology and business model foundations of the ecosystem driver businesses, once through the tipping point this will be the defining characteristic of the successful insurers we have left.