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Claims Happen … Are you Future-Ready Enough to Handle Them?

Denise Garth
Insurance Experts' Forum, August 15, 2013

 

Claims happen, which is why people buy insurance.   Just look at the statistics:

Claims resulting from hailstorm damage increased 84 percent in 2012 from their 2010 level. (National Insurance Crime Bureau)

From 2007 to 2011, incurred  losses for auto insurance increased for private passenger physical damage from $37,506,571 to $40,592,433 (III)

In 2011 about 7 percent of insured homes had a claim, according to ISO. About 98 percent of those claims were for property damage, including theft. (III)

In Oklahoma as of May, insurance claims filed in response to a major tornado outbreak were at 75,758 with insurance payments reaching $687,945,276. (Oklahoma Insurance Department)

Claims are times of crises for customers. They've been in fender benders. A tree has fallen on their house. A major storm has hit and destroyed their house and cars. Now, they turn to you, their insurer, for help, understanding, and resolution. But are you ready to provide a customer experience that enhances the relationship during a difficult time? 

Between day-to-day claims and the increasing number of natural catastrophes, insurers must be prepared to handle everything from a single minor incident to large volumes of incoming claims at any time. Add to that the need for empathy, accuracy, speed and efficiency to enhance the customer experience, let alone maintain customer satisfaction and you have a recipe for your own disaster if your staff, business processes, repair networks and systems aren't up to the challenge. 

You need to have business capabilities to rapidly and efficiently take in loss data, whether on the phone or via a portal or mobile device. You need staffing with the flexibility and expertise to effectively handle the surge in claims filings at any time of the day or night and often in large numbers. In addition, you need contingency planning and not just disaster recovery for your systems, but for your entire claims operation.  You too can be impacted by a disaster after all!

Karlyn Carnahan of Novarica discussed these issues at our recent Customer Advisory Board meeting. She showed that "40% of carriers are able to give claimant specific advice at the time of the claim ... 45% of carriers have instant access to policy and detailed coverage information at time of claim … Those whose systems are five years old or less were significantly more likely to provide direct support during that process than those whose systems were 5-10 years old."  With that difference, don’t you wonder what the difference is on customer satisfaction and retention!

With those numbers, the first thing you need to do is look at your current claims operation from including your core claims systems, your staffing and business partners.   You need to assess and answer questions like:

What options do you have to take in first notice of loss claims data … phone, portals or mobile devices?

Do customers have access to you 24 x7 and through any means or device?

Do you have mobile capabilities that provide claims filing capability including the upload of pictures, video and data?

Can you pre-set claims records for customers in the path of an anticipated cat event and send them their claims number?

Can you communicate with them via phone, email, text or social media to help them prepare and respond after the event?

If your office is in the line of a cat event, will your claims operation be able to support your customers?

If you cannot support these, then it’s likely time to consider what steps you need to take to better handle these claims issues and be competitive. 

When a claim happens, it is “the moment of truth” where insurers must meet their promises to you that are within your policy.  Your name, your reputation, and your future business are on the line. As pointed out by Carnahan, "a bad claims experience is a top reason for non-renewal." 

She also pointed out four things that customers expect from claims today: 

Smooth Process — no paper delays or requests for information you should have already

Quick Resolution — they've seen the TV commercials for carriers and expect it

Transparency — just like FedEx or UPS, they expect to monitor the process and status

Collaborative — with social media, they expect communication and to be a part of the process

During this same meeting, a major area of discussion was how insurance companies handled claims in times of crisis. "Frankenstorm" Sandy proved to be the ultimate testing lab for many insurers due to its geographic size and intensity.  In preparation, some insurers partnered with us, for example, to handle additional first notice of loss calls through our business process services group or for some because they were down due to the storm.  Others are using our core claims solution to help them better prepare and respond.  And others are using our claims services to repair autos or homes, assist in subrogation or salvage and more.  Together each of these solutions helped our customers ensure they have the responsiveness, empathy and support needed for their customers at that “moment of truth”.

Claims happen and it's why we exist as an industry … to underwrite risk and help make people whole following an event. But how you handle crises and customers, how quickly you respond, and how long it takes to resolve the claim make all the difference. You need to be sure that your claims operation from its core claims system to your call center, repair networks and more are up to the challenge and that you have a partner to support you and your business strategy.

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Claims happen, which is why people buy insurance.   Just look at the statistics:
Claims resulting from hailstorm damage increased 84 percent in 2012 from their 2010 level. (National Insurance Crime Bureau)
From 2007 to 2011, incurred  losses for auto insurance increased for private passenger physical damage from $37,506,571 to $40,592,433 (III)
In 2011 about 7 percent of insured homes had a claim, according to ISO. About 98 percent of those claims were for property damage, including theft. (III)
In Oklahoma as of May, insurance claims filed in response to a major tornado outbreak were at 75,758 with insurance payments reaching $687,945,276. (Oklahoma Insurance Department)
Claims are times of crises for customers. They've been in fender benders. A tree has fallen on their house. A major storm has hit and destroyed their house and cars. Now, they turn to you, their insurer, for help, understanding, and resolution. But are you ready to provide a customer experience that enhances the relationship during a difficult time? 
Between day-to-day claims and the increasing number of natural catastrophes, insurers must be prepared to handle everything from a single minor incident to large volumes of incoming claims at any time. Add to that the need for empathy, accuracy, speed and efficiency to enhance the customer experience, let alone maintain customer satisfaction and you have a recipe for your own disaster if your staff, business processes, repair networks and systems aren't up to the challenge. 
You need to have business capabilities to rapidly and efficiently take in loss data, whether on the phone or via a portal or mobile device. You need staffing with the flexibility and expertise to effectively handle the surge in claims filings at any time of the day or night and often in large numbers. In addition, you need contingency planning and not just disaster recovery for your systems, but for your entire claims operation.  You too can be impacted by a disaster after all!
Karlyn Carnahan of Novarica discussed these issues at our recent Customer Advisory Board meeting. She showed that "40% of carriers are able to give claimant specific advice at the time of the claim ... 45% of carriers have instant access to policy and detailed coverage information at time of claim … Those whose systems are five years old or less were significantly more likely to provide direct support during that process than those whose systems were 5-10 years old."  With that difference, don’t you wonder what the difference is on customer satisfaction and retention!
With those numbers, the first thing you need to do is look at your current claims operation from including your core claims systems, your staffing and business partners.   You need to assess and answer questions like:
What options do you have to take in first notice of loss claims data … phone, portals or mobile devices?
Do customers have access to you 24 x7 and through any means or device?
Do you have mobile capabilities that provide claims filing capability including the upload of pictures, video and data?
Can you pre-set claims records for customers in the path of an anticipated cat event and send them their claims number?
Can you communicate with them via phone, email, text or social media to help them prepare and respond after the event?
If your office is in the line of a cat event, will your claims operation be able to support your customers?
If you cannot support these, then it’s likely time to consider what steps you need to take to better handle these claims issues and be competitive. 
When a claim happens, it is “the moment of truth” where insurers must meet their promises to you that are within your policy.  Your name, your reputation, and your future business are on the line. As pointed out by Carnahan, "a bad claims experience is a top reason for non-renewal." 
She also pointed out four things that customers expect from claims today: 
Smooth Process — no paper delays or requests for information you should have already
Quick Resolution — they've seen the TV commercials for carriers and expect it
Transparency — just like FedEx or UPS, they expect to monitor the process and status
Collaborative — with social media, they expect communication and to be a part of the process
During this same meeting, a major area of discussion was how insurance companies handled claims in times of crisis. "Frankenstorm" Sandy proved to be the ultimate testing lab for many insurers due to its geographic size and intensity.  In preparation, some insurers partnered with us, for example, to handle additional first notice of loss calls through our business process services group or for some because they were down due to the storm.  Others are using our core claims solution to help them better prepare and respond.  And others are using our claims services to repair autos or homes, assist in subrogation or salvage and more.  Together each of these solutions helped our customers ensure they have the responsiveness, empathy and support needed for their customers at that “moment of truth”.
Claims happen and it's why we exist as an industry … to underwrite risk and help make people whole following an event. But how you handle crises and customers, how quickly you respond, and how long it takes to resolve the claim make all the difference. You need to be sure that your claims operation from its core claims system to your call center, repair networks and more are up to the challenge and that you have a partner to support you and your business strategy.Claims happen, which is why people buy insurance.   Just look at the statistics:

Denise Garth is the executive vice president of strategic marketing and industry relations, and global head of market strategy for Innovation Group North America.  She can be reached for further comment or information via email at garthd@us.innovation-group.com

 

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