Claims are typically viewed as an expenditure, outflow, and adeficit. They are a point of contention that can often result inconflict with a loyal customer. In many respects, claims are where the battlefor retention is won or lost. At their very best, claims arecertainly not a celebrated moment in the customer relationshipmanagement lifecycle. If claims are at the root of customerdissatisfaction, and the only sustainable advantage a company hasis providing superior customer service, then why aren't moreefforts and resources focused on truly changing this rudimentaryproblem?

Consider a new vantage point, one that instead sees claims as aparadoxa problem that can be part of the solution. While there arecommonalities in processes across home, auto, and other claim types, the link to the customer at this critical point is the same. Inthis article we will focus on the imperative connection in personalproperty claims. Intimate processes as insurance claims go, but aswith all claims, when executed effectively property claims can transform a business.

The New 'Good Enough'

Contents claims have long been seen as tedious, complex, andtime-consuming. Carriers believe contents losses requirespecialized knowledge or assistance from outside sources. Oftenthis means handing the customer off to a third party, leaving thepolicyholder feeling disenfranchised, and the claims adjusterdevalued. One in three property losses now involves contents. When contents areinvolved the customer service index scores drop dramatically, and ahigh percentage of those customers actually switch carriers beforethe loss is even settled. The level of service provided during theclaims process has become an operational risk, even whenoutsourced. Given this recent research, moving the contents claimprocess back to the adjuster and rethinking current internalmethods presents a unique opportunity to transform the customerexperience, positively impacting customer retention.

Historically the insurance industry hasembraced a culture of acquisition, not innovation. After all, it's easier and faster to write bigchecks than it is to change the way business is handled. Methodsonly change after the customer has become fed up and frustrated,threatening the bottom line through attrition. As consumers seetechnological advancements, more self-service options, and improved accessibility from otherindustries, they are demanding the same of us. Claims handling mustbecome more agile and more customer-centered, especially wherepersonal property claims are involved.

Many are quick to spend huge sums on trendy, egocentricbandwagons, for example telematics, that strictly benefit thecompany. However, they seem to ignore the economic significance ofimproving current processes to keep a customer versus the cost ofacquiring a new one. Simply applying universals to claims no longerworks. This in large part is because of an industry that still doesnot fully understand its customer; their needs and wants. Insurersare stuck in a cycle, trying to match customers with what is beingproduced, rather than being truly customer-centric. A multifacetedvariable, claims is not an organic chemistry. The process is madeharder than it needs to be. To truly keep customers satisfied, adjusters must be empowered toconfidently handle the claims process and maintain a mutuallyadvantageous connection with the policyholder. The challenge: howto simplify current systems, without disruption, while keeping thecustomer engaged and involved.

One belief is that contents losses are just too difficult, toointricate or too complex for the average adjuster to handle alone.This creates an impression that existing staff is not capable.Alternatively, current internal systems have made the process sooverly complicated with manual ad-hoc methods, leaving staffoverwhelmed. This directly translates to reduced customersatisfaction.

The contents claims ecosystem must be reinvented and leveragedto strengthen the customer connection. It must be redesigned fromthe outside-in, from the insured's perspective, to combineexpanding social behaviors with essential adjuster functionality.Looking at claims through this lens, a direct correlation betweenclaims processing procedures, the customer experience, and companyrevenues can be seen.

Substantive change isn't likely the path of least resistance; itwill require initiating a new mind-set among staff and customersalike. As Chief of Staff, U.S. Army Gen. Eric Shinseki put it, "ifyou don't like change, you're going to like irrelevance evenless."

Perception Not AlwaysReality

The Customer Comes Second: Put Your People First andWatch'em Kick Butt, by Hal Rosenbluth and Diane Peters pointsout something so simple yet so often forgotten: when a business'peopleincluding any extension of its brand, for example independentadjustersare happy, content, and empoweredtheir customers areimmeasurably more satisfied and loyal.

Adjusters are educated, licensed, well-trained and experienced,yet a majority of their key specific responsibilities have beenremoved. When it comes to handling contents claims this dilemmaexists primarily because the practice has been isolated and definedby outside sources. Adjusters therefore have not had the properbusiness tools and technology to make the task simpler and morefulfilling. If a task is portrayed as daunting it will be perceivedas such. The industry's perception of contents losses is equal tothe Wizard in The Wizard of Oz, there is some secretlyconcealed external process that holds all the answers. A magical"flipof a switch" or "push of a button" and the disillusionmentvanishes, but at what cost?

 There is certainly a time and place for specializedknowledge of high value items like fine art, jewelry andcollectibles on a case-by-case basis. The majority of contentsclaims and undoubtedly in a CAT environment, however can be, and should be, handled by theexisting frontline workforcea combination of independent adjusters,field and inside staff. This unparalleled opportunity to improvethe customer experience during the claims process can no longer becarried out as a matter of convenience. The need for personalizedcollaboration between the insurer and the policyholder has become abusiness and strategic imperative. The more advanced technologyadjusters have at their disposal, the more efficiently andeffectively they can connect with customers and process claimsin-house. By pulling the curtain back and revealing bettertransparency communication during the loss is greatly improved. Inaddition, this simplifies the systems used by adjusters andinvolves the customer in the process. This creates a more confidentclaims adjuster, which in turn creates more trust and customerloyalty, directly impacting retention.

The Cost of Innovation

The big fear of company administrators, small and large is thatchange and innovation, costs money. Traditionally, new systems andcosts of training made decision makers sway away from updatingclaims processes until they viewed it as absolutely necessary. Whenthey did costs were exorbitant. Today innovation costs less thandoing nothingif an insurer doesn't change, their competition willand their customers will be gone. Innovating the customerconnection, as well as increasing the adjuster's capacity formanaging inventory lists and claims estimating can alter thestandard course of frustration.

A cloud Software-as-a-Service (SaaS) or on-demand pay-as-you-go serviceabolishes the traditional "load, update and upgrade" businesstechnology model, virtually eliminating all maintenance andrequired hardware issues. Moving these new dynamic non-coresoftware tools for the adjuster from a fixed (capital) expense to avariable (operational) one, companies can easily budget low,flat-fee usage as a claim item expense on an as-needed basis. Thesedays the need to "own," or "build" custom applications is archaicand costly. There are few, if any, strategic advantages. Theadvancements and acceptance of cloud computing has leveled theplaying field, truly democratizing claims. Small- and medium-sizedenterprises can now implement the newest claims technology,methodologies and innovations without asset-heavy IT departments orcostly custom development.

Managing claims in the cloud can increase productivity andimprove communication and collaboration during the claims process. Ease-of-use gives theadjuster the confidence to perform these tasks on their own insteadof involving expensive third-party vendors. Real-timeanywhere-access data eliminates pivotal flaws in current proceduressuch as the customer having to repeat information multiple times tomultiple representatives. This alone can be a tipping point forcustomer satisfaction index scores when a claim involvescontents.

Forward Thinking

There is a direct link between company revenue and the level ofservice provided during the claims process. Technology thatconnects and empowers the adjuster has never been more affordableand more easy to use. It will have a profound effect on thecustomer experience. Creating more personalized services andaccessibility options, using a common unified platform during theclaims process, can single-handedly improve customer retention andthe bottom line.

Claims should always be about the customer. Companies who seethe value in what this means and how it translates to companyrevenue will have the competitive advantage. Make no mistake, inthe new networked economy everything is up for grabs. The industryand its customers are changing. Insurers must evolve alongside thecustomerneed as the customer needs. They will demand nothingless.