Claims are typically viewed as an expenditure, outflow, and a deficit. They are a point of contention that can often result in conflict with a loyal customer. In many respects, claims are where the battle for retention is won or lost. At their very best, claims are certainly not a celebrated moment in the customer relationship management lifecycle. If claims are at the root of customer dissatisfaction, and the only sustainable advantage a company has is providing superior customer service, then why aren't more efforts and resources focused on truly changing this rudimentary problem?

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

The New 'Good Enough'

Contents claims have long been seen as tedious, complex, and time-consuming. Carriers believe contents losses require specialized knowledge or assistance from outside sources. Often this means handing the customer off to a third party, leaving the policyholder feeling disenfranchised, and the claims adjuster devalued. One in three property losses now involves contents. When contents are involved the customer service index scores drop dramatically, and a high percentage of those customers actually switch carriers before the loss is even settled. The level of service provided during the claims process has become an operational risk, even when outsourced. Given this recent research, moving the contents claim process back to the adjuster and rethinking current internal methods presents a unique opportunity to transform the customer experience, positively impacting customer retention.

Historically the insurance industry has embraced a culture of acquisition, not innovation. After all, it's easier and faster to write big checks than it is to change the way business is handled. Methods only change after the customer has become fed up and frustrated, threatening the bottom line through attrition. As consumers see technological advancements, more self-service options, and improved accessibility from other industries, they are demanding the same of us. Claims handling must become more agile and more customer-centered, especially where personal property claims are involved.

Many are quick to spend huge sums on trendy, egocentric bandwagons, for example telematics, that strictly benefit the company. However, they seem to ignore the economic significance of improving current processes to keep a customer versus the cost of acquiring a new one. Simply applying universals to claims no longer works. This in large part is because of an industry that still does not fully understand its customer; their needs and wants. Insurers are stuck in a cycle, trying to match customers with what is being produced, rather than being truly customer-centric. A multifaceted variable, claims is not an organic chemistry. The process is made harder than it needs to be. To truly keep customers satisfied, adjusters must be empowered to confidently handle the claims process and maintain a mutually advantageous connection with the policyholder. The challenge: how to simplify current systems, without disruption, while keeping the customer engaged and involved.

One belief is that contents losses are just too difficult, too intricate 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 so overly complicated with manual ad-hoc methods, leaving staff overwhelmed. This directly translates to reduced customer satisfaction.

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

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

Perception Not Always Reality

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

Adjusters are educated, licensed, well-trained and experienced, yet a majority of their key specific responsibilities have been removed. When it comes to handling contents claims this dilemma exists primarily because the practice has been isolated and defined by outside sources. Adjusters therefore have not had the proper business tools and technology to make the task simpler and more fulfilling. If a task is portrayed as daunting it will be perceived as such. The industry's perception of contents losses is equal to the Wizard in The Wizard of Oz, there is some secretly concealed external process that holds all the answers. A magical "flip of a switch" or "push of a button" and the disillusionment vanishes, but at what cost?

There is certainly a time and place for specialized knowledge of high value items like fine art, jewelry and collectibles on a case-by-case basis. The majority of contents claims and undoubtedly in a CAT environment, however can be, and should be, handled by the existing frontline workforcea combination of independent adjusters, field and inside staff. This unparalleled opportunity to improve the customer experience during the claims process can no longer be carried out as a matter of convenience. The need for personalized collaboration between the insurer and the policyholder has become a business and strategic imperative. The more advanced technology adjusters have at their disposal, the more efficiently and effectively they can connect with customers and process claims in-house. By pulling the curtain back and revealing better transparency communication during the loss is greatly improved. In addition, this simplifies the systems used by adjusters and involves the customer in the process. This creates a more confident claims adjuster, which in turn creates more trust and customer loyalty, directly impacting retention.

The Cost of Innovation

The big fear of company administrators, small and large is that change and innovation, costs money. Traditionally, new systems and costs of training made decision makers sway away from updating claims processes until they viewed it as absolutely necessary. When they did costs were exorbitant. Today innovation costs less than doing nothingif an insurer doesn't change, their competition will and their customers will be gone. Innovating the customer connection, as well as increasing the adjuster's capacity for managing inventory lists and claims estimating can alter the standard course of frustration.

A cloud Software-as-a-Service (SaaS) or on-demand pay-as-you-go service abolishes the traditional "load, update and upgrade" business technology model, virtually eliminating all maintenance and required hardware issues. Moving these new dynamic non-core software tools for the adjuster from a fixed (capital) expense to a variable (operational) one, companies can easily budget low, flat-fee usage as a claim item expense on an as-needed basis. These days the need to "own," or "build" custom applications is archaic and costly. There are few, if any, strategic advantages. The advancements and acceptance of cloud computing has leveled the playing field, truly democratizing claims. Small- and medium-sized enterprises can now implement the newest claims technology, methodologies and innovations without asset-heavy IT departments or costly custom development.

Managing claims in the cloud can increase productivity and improve communication and collaboration during the claims process. Ease-of-use gives the adjuster the confidence to perform these tasks on their own instead of involving expensive third-party vendors. Real-time anywhere-access data eliminates pivotal flaws in current procedures such as the customer having to repeat information multiple times to multiple representatives. This alone can be a tipping point for customer satisfaction index scores when a claim involves contents.

Forward Thinking

There is a direct link between company revenue and the level of service provided during the claims process. Technology that connects and empowers the adjuster has never been more affordable and more easy to use. It will have a profound effect on the customer experience. Creating more personalized services and accessibility options, using a common unified platform during the claims process, can single-handedly improve customer retention and the bottom line.

Claims should always be about the customer. Companies who see the value in what this means and how it translates to company revenue will have the competitive advantage. Make no mistake, in the new networked economy everything is up for grabs. The industry and its customers are changing. Insurers must evolve alongside the customerneed as the customer needs. They will demand nothing less.

Special Reports /

Opinion: Improving Claims Processes, Adding Revenue

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