Insurers Can Turn Claims Into Marketing Opportunities

Often, the claims department is an area of the insurance industry that many try to ignore. It tends to be a lot like your vehicle's spare tire–it's not thought of until it's absolutely essential to continue the journey. This leads me to ask whether there is a way to alter that perception. Is it possible to turn the often dirty and ill-maintained spare tire into a marketing opportunity?

A few insurers have admirably attempted this revolutionary task. Their efforts have consisted of lettering a company vehicle to rush out to an accident scene or disaster area, allowing their sales force or adjusters to issue checks to handle the initial steps of the claim process.

These are noble efforts, but are they revolutionary? Honestly, I do not think so.

Dating all the way back to the days of the original Lloyd's coffeehouse, has the claim process ever truly changed? Not really. It's gotten faster and more efficient, but so has the rest of the business world. That's not revolutionary, that's survival.

The reason no company has been truly revolutionary varies.

Some companies have focused only on conventional marketing and branding, some on greater automation, and some on differentiating their policies. Still others have focused on the “delay, deny and defend” approach.

Many companies utilize a mix of all these strategies. These approaches have varying degrees of merit and success, but none of them are truly revolutionary. None of them significantly change our way of handling a claim.

To be truly revolutionary requires unconventional thinking.

Many insurers have their attention fixed on the company that is currently generating the greatest return on investment. This approach to modern conventional management is flawed.

The company actually generating the greatest return on investment constantly changes. By simply following the company that is currently “on top,” a culture of inconsistency is fostered and perpetuated.

This inconsistency within the corporate culture of the following company frustrates the natural ingenuity and creativity of that organization. Therefore, all the follower can do is follow.

The following company has not done anything to foster its own creativity and ingenuity. It becomes dependent on the rest of the industry for new ideas. If every company in the industry is a follower, the best we will ever have is a circle of outfits moving in place and never being innovative or revolutionary.

So this leads me to ask, what change could turn the claims process into a marketing opportunity? What could differentiate one company from the rest of the industry? One answer is actually quite simple:

o Start preparing for the actual claim, not just the process, before the claim ever occurs.

Stop trying to simply be the fastest company to react. Start being the company that has done their homework and is prepared ahead of time.

The life of a claim starts with the application and moves through the underwriting process. Once the policy is issued and effective, the policy is a prime target for a claim.

Unfortunately, the industry currently stops right there. The current approach is to sit back, wait and hope for the best. Why?

The claims department knows what information is necessary to process a claim before it occurs. Why not go ahead and prepare for the claim?

Instead of advertising that your insurance company jumps higher and faster than the next company, advertise that your company is ready for the loss before it even occurs.

For example, imagine having a total loss to an automobile, where the company already has a preliminary value on file for the particular vehicle. The moment the claim is turned in, all they would have to do is confirm the current mileage and condition of the vehicle and move forward with the claim.

Another example is if there is a theft of personal property claim, the company already has an inventory of the items and could quickly–if not instantly–generate the value of the claim.

This approach can even impact liability claims. The insurer could already have photographs of where a slip-and-fall or other on-premises loss occurs before it ever happens.

So, how does this idea work out in the real world?

o Fill the void.

The company desiring to be revolutionary and implement this process has to fill the gap between the underwriting and claims departments. Call this new department what you want, but I believe “client services” is a good choice.

Once a policy comes in and is underwritten, it leaves the underwriting department and instead of sitting dormant, the policy goes to the client services department, which begins working with the policyholder to gather information based on the coverages the client purchased.

If it's a homeowners' policy, the client services department gathers photographs of the structure and a floor plan. They work with the policyholder to gather information as to their personal inventory and that sort of thing. That way, after the insured has been through a traumatic event which has given rise to a claim, the claims process does not add to that trauma.

Since the client services department has already gathered most of the insured's information after the policy came in, the claims department is now able to much more affectively and quickly deliver on the policy's promises. In other words:

o Reaction has now been replaced by proaction.

Won't this approach cost more? It shouldn't, because all we are doing is shifting the handling of information from one time to another. We are now gathering information before the event, as opposed to after it.

Also, this approach will assist the underwriting department to more accurately price the risk. It will reduce much of the friction between the insurer and the insured because the insurer's assessment of the value is based on better information.

This approach gives the insurance company the opportunity to properly set a policyholder's expectations of the loss valuation and handling, before a claim ever occurs. By implementing this process, a company will see:

o Reduced stress and anxiety for both the policyholder and the claims department.

o Improved claim-cycle time.

o Reduced expenses.

Meanwhile, the insurance company will be providing a service to the insured by proactively gathering their inventory and property assessment in case of a loss–all of which lead to the biggest benefit of all:

o Creation of value-added marketing opportunities.

Instead of being the spare tire in the trunk, the claims department is now the heated leather seat assuring the driver of why they bought the vehicle in the first place.