Can your claims department add value to your product? Do peopletruly buy based on how your claims department functions? Theanswers to these questions depend on the metrics you utilize tomeasure performance in your claims department.

When someone is looking to buy insurance, do they really look tothose things you measure? There is no question the failure toprocess a claim in a timely, fair manner (in the eyes of theinsured) will be used as a reason to look elsewhere. But, when itcomes time to buy, does a prospective insured care or even knowabout how your claim department has a 105 percent closing ratio, orthat the average paid by line of business is down this year overlast year, or that the average claims duration is 5 percent belowindustry average? I doubt it.

While the purchase of personal lines coverage is driven byprice, this is not necessarily the case in commercial andprofessional lines. Instead, insurance buying decisions, just asmost B to B decisions, are substantially impacted by productquality supported by a sustainable competitive advantage.

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