It’s a point that has been made consistently and coherently by industry players all across the insurance ecosystem, but it bears repeating nevertheless - the claims experience of a consumer is the single most significant proof of the concept of insurance. A claim is the point at which the theoretical ‘promise’ of insurance becomes an action that supports and protects people at businesses at their lowest ebb.
The lingering resonances of Brexit, the conflict in Ukraine, spiking inflation rates and the very real prospect of the UK sinking into a recession are among the pressing considerations spotlighting the need for insurers to emphasise the value-add that is insurance. That’s to say nothing of the aftershocks of COVID which, as revealed in the latest survey for the Chartered Insurance Institute (CII)’s Trust Index, has firmly split public opinion on insurance.
Those who have been heavily affected financially by COVID-19 tend to value clarity around claims processes and being able to select suppliers during a claim over rewards for loyalty, the CII found. Meanwhile, those consumers not significantly impacted by COVID still cited renewal premiums and rewards for loyalty as the biggest area of improvement for insurers.
Further compounding the spotlight that claims so desperately need is Accenture’s eye-opening report, ‘Why AI in Insurance Claims and Underwriting?’. The survey, which solicited the views of over 6,700 policyholders in 25 countries and more than 120 claims executives in 12 countries, highlighted that poor claims experiences could put up to $170 billion (approx. £139.84 billion) of insurance premiums at risk in the next five years.
The report went on to reveal that 31% of surveyed claimants were not fully satisfied with their home and auto insurance claims-handling experiences over the past two years – with settlement speed concerns and issues with the closing process among the key reasons for this dissatisfaction. Poor claims experience is driving customers to switch insurers, Accenture stated, with 30% of disgruntled customers having switched carriers in the past two years and another 47% considering the same route.
Accenture’s report emphasises a lot of the challenges present in the insurance claims chain but also raises a critical observation – these challenges need to be addressed at a market level just as much as at a company level. There’s no point in consumers moving from provider to provider in search of a better claims experience if the concerns they have are not being actively addressed across the industry.
Claims specialists such as Crawford & Company’s Lisa Bartlett and Liberty Specialty Market’s Mike Gillett are among those who have championed changing attitudes to the claims experience – and there has never been a better time to take such insights on board. In a recent feature, Bartlett noted the role that data analytics plays in improving the customer journey but cautioned the need for providers not to forget the importance of face-to-face interaction, and the value that a multi-channel approach to claims brings to insureds.
It’s advice that calls to mind the factor most essential in developing a strong claims proposition – having a capable, efficient and empathetic claims team. It is really only through the strength of these teams that claims will be able to further shift out of the shadows of being seen as a back-office function separate to being credited for what it is – an integral part of an insurance customer’s experience.
As Gillett emphasised, there is an increasing understanding that claims must be built into the very heart of the entire insurance process. But for this to happen, he believes there must be recognition that the claims proposition is not limited to the experience of having a claim but rather a value add all across the insurance chain, before a risk is ever even underwritten.
Claims experience is something that insurance businesses ignore at their peril and its integral link with customer experience is only becoming clearer as consumers’ expectations of insurance become ever more clearly defined. Businesses of every stature and sector should be turning their attention to the end-zone of insurance and embracing every opportunity to put a visible face to this intangible product. And that means allowing claims to take its rightful place, not at the right-hand side of the overall insurance offering but as part and parcel of everything that entails.