Forrester Research: Contents-Claims Provider Listed as "Hot"

The ultimate policyholder experience was also top of mind for Enservio. Enservio made it easy for claimants to recover, beginning with the option of getting their settlements in a payment card that they could use at their own RestoreMall site or at the store of their choice. Enservio removed a lot of the hassle at a time when a claimant is under enough stress.

CLAIMS: How do you help carriers better manage their claim costs?

McNEILL: The spend on personal lines for contents totals more than $7 billion annually, yet many insurance carriers lack clear strategies and processes for handling contents claims. Inefficiencies and inaccuracies that arise as a result cause the industry to suffer significant, unnecessary costs.

Carriers also put customer satisfaction and loyalty at risk.

To accelerate the claim process, improve accuracy and increase customer satisfaction, successful carriers often implement best practices. These are especially helpful in developing a strategy, solutions, and processes for improving contents claims:

Leverage Adjuster Time. Processing claims for property structures can be a lot for adjusters to handle, and contents claims can be even more complex. Take contents out of the equation by taking advantage of vendor technology and service solutions available on the market today that are focused solely on contents claims. These solutions free the adjuster to focus on the structural piece of the claim. Focusing a contents resource on the Coverage C portion of the claim has a dramatic impact on cycle time and quality. A contents-focused resource can reduce the contents-claims process from six months to three days or less.

Develop Distinct Strategies for Handling Large and Small Losses. Large, catastrophic losses can mean that all contents owned by an insured have been severely damaged or completely destroyed. Small losses, which represent 75 percent of contents claims for carriers, typically consist of 20 items or less. Clearly, different strategies, tools, and services are needed for both scenarios, but many carriers fail to make this distinction. In order to handle both small and large loss claims as efficiently as possible, carriers need scalable software and services that support many simultaneous users and plug directly into the valuation and settlement process. This saves multiple steps and delays in cycle time while delivering the highest quality contents inventory and valuation.

Track and Know Your Data/Metrics. In order to constantly improve services and product offerings while also controlling costs, carriers need to understand customer behavior, contents-claims trends, and history. Carriers can unlock these insights by analyzing contents-claims data and metrics over time. This information can help carriers improve services and identify new product and service offerings their customers need, and it also can improve fraud detection.

Build Customer Trust and Loyalty. Insurance claims due to losses large or small are often stressful and can be traumatic for customers. Many consumers are unaware of how challenging the contents-claims process can be and are surprised to find that most carriers rely on them to conduct their own contents inventories after a loss has occurred. Carriers can build customer trust and loyalty by offering contents-claims tools and services that take some of the burden off of the insureds. Providing on-site field experts who can help with the inventory and valuation process, or do-it-yourself tools that use the phone or the Internet to simplify the process means that your customers will appreciate the fast and accurate settlements they receive.

Ensure Accurate Contents Valuation. Accurate contents valuation ensures transparency and protects both carriers and their customers. Even cases in which a customer or claim adjuster creates a thorough inventory of lost contents, inaccurate valuation can cause carriers to bear unnecessary cost and generate poor customer satisfaction. It's also extremely difficult for adjusters to accurately gauge the value of the multitude of lost items in a home or business. Valuation accuracy and consistency, both within claims and across multiple claims, require centralized processes and valuation tools rather than the current practice of relying on claim adjusters to search the web for pricing information.

CLAIMS: What is the future for contents-claims solutions?

McNEILL: Homeowners' products have been a loss leader for insurance carriers for the past decade, due mainly to inaccurate and inefficient contents-claims processes, but new technologies and services have emerged that are helping carriers overcome homeowners' policy economics.

Now that more sophisticated processes and detailed analyses are available, carriers and chief claim officers see contents claims as a compelling opportunity to finally put homeowners' offerings on track for profitability.

I predict that 2010 will be "The Year of Contents," as insurance carriers implement strategic new technologies, services, and product innovations focused on improving the accuracy and efficiency of contents claims as outlined by the following trends:

Contents Excellence Goes Mainstream. As the economy lurches out of the recession, insurance carriers are under tremendous pressure to find new ways to cut costs, improve efficiencies, and position themselves for the recovery. Early adopters of contents-claims solutions have dramatically reduced costs and improved customer satisfaction due to more accurate and swift contents-claims resolution. An increasing number of carriers and chief claim officers are taking notice, which will lead to wider implementation of contents-claims solutions in 2010.

Carriers Will Lift Homeowners' Products Out of the Red with Contents Claims Solutions. Carriers that take advantage of contents-claims technology and service solutions will be able to realize up 20-30 percent improvement in the accuracy of contents-claims settlements. Claims will also be completed in a matter of days rather than months, significantly boosting customer satisfaction, loyalty, and retention rates. These improvements will help carriers lift homeowners' products out of the red and into the black.

Contents Claims Innovations Will Help Carriers Modernize Homeowners' Products. Current homeowners' products on the market offer consumers few options for customizing their coverages to match their personal needs or unique financial profiles. In a manner similar to auto insurance products, carriers will introduce new options and services for homeowners' insurance, with new contents-claims innovations as the main driver for product diversification. Improved contents-claims services will allow carriers to offer homeowners distinct levels of contents replacement packages and services, such as:

- Contents concierge services for handling every step of the contents inventory, valuation, and replacement process for the customer.

- Access to online and brick-and-mortar retail stores for deep discounts on elective replacement of content items.

- Specialized contents service offerings to protect the investments of high net worth individuals with rare, valuable items in their homes, such as artwork and collectibles.

Many carriers are also beginning to look at contents-coverage offerings for renters, another growth opportunity that new contents-claims solutions put within reach.

Contents Claims Will Drive Insurance Industry Job Growth. Carriers have already begun to create specialized business units and personnel for handling contents claims and replacement services, and that trend will gain momentum in 2010. The growing number of new contents-focused product offerings will require more personnel for managing and marketing these new services. What is more, the cost savings and improved efficiencies ushered in by the growing adoption of contents-claims solutions will sustain new job growth opportunities while also improving the bottom line for carriers.

See Also: Taming Contents Claims