By Paul Morrissette, president, Chubb Insurance Solutions Agency Inc.
Unlike people in many other professions, those of us in the insurance business are also consumers of the products we distribute. On occasion, we experience a loss of some kind and have to file a claim. Of course, this is why we bought insurance in the first place—to transfer the risk of financial losses we otherwise do not want to absorb ourselves.
A claim on a policy is effectively the whole point of the insurance product—the raison d’etre from the buyer’s point of view. When filing a claim is a painful process and awaiting the claims payment is unnecessarily long and protracted, it not only results in a dissatisfied insurance consumer, it tarnishes the industry’s reputation.
Agents and brokers make choices that will ultimately determine what type of claim service their clients will receive during a disaster, and this choice becomes an important part of an agency’s strategic plan. As independent agents make decisions about which carriers they wish to represent, it is important to contemplate the claim servicing capabilities of their insurers.
In the aftermath of widespread catastrophes like Superstorm Sandy or the tornadoes in Oklahoma, the claims infrastructure at some insurance companies can buckle under tremendous pressure. In a catastrophe, an extraordinary number of claims are being filed simultaneously by individuals and businesses that have suffered financial losses and endured emotional upheaval. Putting such aggrieved people on a long queue to make a claim, speak to an adjuster or receive payment is no way to treat these customers, but the carriers’ resources are strained to the limit. Does it have to be this way?
Keith McCombs, director of personal insurance at INSURICA Insurance Management Network, lives and works in Oklahoma City, so he knows a thing or two about tornadoes and catastrophe claims, particularly those filed by the agency’s affluent clientele. “When disasters happen, many insurers simply say ‘pick a number and get in line,’” he says. “That’s the last thing anyone wants to hear at a time of great stress and need.”
He’s right, of course, and yet the problem persists, accumulating into negative publicity that tars the entire industry. Asked why this is often the case, McCombs agrees that many carriers, particularly newer ones without adequate resources, are to blame. “They have to rely on the external, independent adjusters when a disaster hits,” he says. “Sometimes these adjusters lack empathy—it’s simply a business to them. They set up these command posts in the affected area and it’s like a zoo—pandemonium everywhere you look. It’s all very confusing to policyholders, who are in an emotional bind and need help and money.”
Command posts and mobile claim operations may sound responsive, but insurers that take this approach are asking customers to come to them—usually in a shopping mall parking lot—instead of sending resources to see the customers.
“This is just the beginning of the nightmare,” McCombs says. “Due to the deluge of claims, some claims take over a year to adjust. You can’t imagine the anxiety it all produces.”
Let’s be clear. Many independent claims adjusters are highly competent, professional and caring people. And the task before them is not for the fainthearted. They typically serve many different carriers, forcing them to adjust claims based on multiple claims philosophies and varied processes. In the aftermath of a catastrophe, independent adjusters besieged by an onslaught of myriad claims can find it difficult to discern which carrier’s claims philosophy applies to which policyholders.
Obviously, an insurer’s resources are critical during such times of great duress. A carrier with definitive catastrophe response plans and the ability to “scale up” to meet the demands of customers during a significant event is critical.
Unfortunately, not all carriers have the capacity to provide a swift claims response. Those who can, however, employ creative solutions. For instance, some insurers deploy company claims professionals from across the country or around the globe to pitch in outside their regions when a catastrophe demands their involvement. Such people are cognizant of the company’s claims philosophy and trained in the handling of catastrophe claims—before a catastrophe strikes.
Even in the event that independent adjusters are needed to assist with the post-disaster customer response, these carriers make sure that their internal staff adjusters oversee the work performed by the independent adjuster, thereby ensuring that all claims are appropriately investigated, processed and expeditiously paid. In such situations, it’s the company’s claims staff that makes the decisions—not the external adjuster. These internal resources come at a cost to the carrier, but without these professionals on staff the claims process suffers—to the detriment of the policyholder and his or her opinion of the industry.
There is a strong connection between the claims process and customer satisfaction. “Survey after survey shows that a policyholder’s claims experience is paramount when it comes to their opinions of the insurance company,” McCombs says. “If someone has a bad experience, it no longer matters to them that the insurance policy they purchased was cheaper than competitors’ policies.”
He makes an excellent point. Bad experiences have a way of lingering and can deeply and profoundly affect customer loyalty. Our customers surely deserve empathy, promptness, fairness and technical expertise when they are in a tough spot and need to file a claim. Providing such service should be as fundamental as answering the phone when a prospective customer calls.
Policyholders see advertisements touting “24/7 Claims Service,” assuming this means that if they need assistance, they can get it at any time. This is not always the case. “24/7” may simply mean that call center personnel will take down the claims information over the phone, offering little guidance or assistance until the next business day. This lack of true “24/7” service only slows down the claims process and potentially worsens the extent of the loss.
Alternatively, perhaps the call center’s personnel are capable of recognizing the nature of the situation and, when a policyholder calls, not only is he or she is treated with empathy and respect but the call center personnel are able to provide access to an experienced adjuster who can begin answering questions, offering loss mitigation advise and other services, when they need it most, at the time of the loss instead of the next business day. That claimant is a customer for life.
Since agents and brokers are the front line faces to policyholders, obviously they want to rest assured that their vital accounts are being fairly treated and protected. It’s what we would expect were we to file a claim. As McCombs puts it, “You only know the value of insurance when you have a claim.”