Today's leading senior claim executives are confronted with an increasingly difficult challenge — how to balance achievement of a carrier's targeted claims loss ratio with the delivery of a streamlined customer experience that enhances and differentiates its brand versus the competition.
Policyholder expectations are rapidly evolving, particularly with respect to the claim-reporting function. Once a highly decentralized, paper-intensive, agent-centric process, the claim-reporting process has become increasingly streamlined for many carriers through the adoption of direct loss reporting via a centralized call center facility.
Today, reporting options around the self-service channel, "on-demand" scheduling of third-party services at initial point of collection, and real-time assignment of claim-handling personnel are all expected menu options during the claim intake process. For fast-track eligible claims, several leading global insurers are now providing electronic funds transfers via direct deposit into a policyholder's bank account, thus enabling near-real-time return to pre-loss condition.
The importance of meeting and surpassing these rising expectations cannot be overstated for carriers striving to become dominant national and regional brands. Once the domain of academics, marketing gurus, and public relation firms, the establishment and cultivation of customer loyalty is becoming an essential strategy component — and metric — to be embraced by senior claim and claim-technology leaders in concert with their internal marketing counterparts. A recent industry survey citing "the ease of reporting a claim" as one of the three critical criteria for rating policyholder satisfaction with their carrier underscores the importance of surpassing expectations at the first customer touch-point following policy inception.
The Investment Challenge
Reconciling the need to optimize the customer experience with the traditional claim IT project list of technology initiatives aimed at indemnity savings and ULAE improvement presents both an opportunity and a challenge. Historically, most claim-technology initiatives have been operationally focused, with the emphasis placed on areas such as restructuring the claim-segmentation process, performance measurement and management reporting, enterprise content management, and bill payment.
Over the past three-to-five years, legacy claim system replacement projects have dominated many carriers' claim IT budgets, promising greater adjuster productivity, claim visibility, and single-file coordination of resources. While not mutually exclusive from the customer experience, these investments have not always translated into explicit and meaningful gains in terms of lowering customer acquisition costs, or improving customer satisfaction index metrics.
The Opportunity
Based on this near-term market opportunity to reach a growing and evolving demographic that is fiercely loyal to customer-centric brands such as Southwest Airlines, eBay, and most recently YouTube, the following topics should be analyzed by all senior claim executives:
Self-service trends What are the trends among leading P&C carriers, and more importantly, in advanced but related vertical markets (e.g. financial services)? Security issues, self-help technology such as live chat, mapping software, instant messaging, and real-time streaming and monitoring of data and processes such as the auto-repair process should be analyzed.
Outsourcing options Speed-to-market matters in both business and IT functions. No carrier has the resources, time, infrastructure, and intellectual property to excel in all customer-facing areas along the claim continuum. Who are the leading outsourcing providers of such capabilities? Do they provide a hybrid model of technology, combined with technology-enabled BPO solutions, to ensure a consistent, cross-channel (cell phone/internet/kiosk) experience across all lines of business at all times of the day? Can they emulate and enhance your current customer experience with less risk, and allow you focus on core areas important to your organization?
Global IP capture Despite representing the world's largest property/casualty market, the U.S. P/C market lags behind various other geographies, including the U.K., Germany, Australia, and South Africa in optimizing specific sub-segments within the claim process, particularly around supply chain management. Capturing expertise across various geographies — through vendor or analyst partnerships, or in-house personnel — is critical to providing a unique and compelling customer experience on a continual basis.
Agnostic vendor management models In a March 2006 Consumer Reports article entitled, "Auto Insurance — Choosing an Insurer that Pays," seven percent of consumers felt pressured by a carrier to choose a specific auto-body repair shop, while only 49 percent of this group was satisfied with the outcome. The Orbitz.com model, as opposed to today's dual-vendor co-existence model, is beginning to infiltrate the P/C market, providing a win for consumers looking for the best combination of vendor pricing, geographic proximity, cycle time, and customer satisfaction.
No single carrier is consistently recognized by reliable, objective, third-party sources such as J.D. Power or Consumer Reports as providing the pinnacle of "customer experience" in the P/C industry on an annual basis. Given that the delta in pricing has shrunk in recent years between comparable-sized carriers, national and regional opportunities exist to become the brand of choice for consumers, based primarily on the strength of the customer experience offered to policyholders, agents, and third-party claimants.
Greg Powers is vice president of Innovation First Notice, a provider of claim reporting and customer-service solutions to the P/C industry. He may be reached at powersg@us.innovation-group.com, www.firstnotice.com.
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