Services to the policyholder: BCA 19 judges give their views

Members of the judging panel for the British Claims Awards give their thoughts on claims as a service, and why and how the policyholder must be front and centre

Claims is a service: the clue is in the title. We are in a service industry and, as the saying goes, claims is our shop window.

The customer journey is paramount–and as such, it should be hassle-free. That means avoiding the ‘discount claims payments, because paying cash gets you a cheaper quote’ bunkum. It should not just be about financial considerations but about putting the policyholder back in the same position they would have been had the incident not occurred.

Today, we have access to the technology to clean and restore even before we consider replacement of any damaged items. We have to ensure the policyholder is onside and if it means spending slightly more in cleaning and repair, then we should. That goes some way to building the industry’s reputation. A happy policyholder can mean a renewal so a happy broker—a win, win, win situation for all concerned.

So how do we achieve this? One way is to make sure that any procurement officer looking at a claims service provider understands they should be putting the customer first. The role is not to stack it high to sell it cheap, thus saving money. Yes, we understand the importance of economics and critical mass of purchases, but the policyholder wants to know they are valued as a customer, not just a figure on the balance sheet.

I know this first-hand from my own experience of making a claim for burglary. All the loss adjuster wanted to do was to reduce the cost of the claim by 20%. It got so bad that I phoned the claims director of the insurance company and complained about how the claim was being run. My claim was resolved after the claims director took control. I was lucky as I understood the situation, but imagine how the everyday policyholder, who does have the advantage of such knowledge, must feel in this situation? Let’s treat our customers how we would like to be treated so when they have a claim, their journey is as painless as possible, otherwise we run the risk of losing them.

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Successful delivery of any service is based on meeting customers’ expectations—that much is obvious. The challenge for insurers in these days of very high customer expectation and multiple opportunities to highlight a failure to meet those expectations is therefore understanding exactly what each customer expects. It is not enough to develop an inflexible service no matter how well thought through and delivered that might be. It is not enough to communicate solely through the insurer’s preferred medium.

It is essential to respond precisely to each customer’s needs and particularly to communicate sensibly and with empathy to that customer. With so many communication options available, there really is no excuse for an insurer not communicating effectively with the policyholder as to what is happening about a claim at any given time.

However, an efficient and effective claims service does not simply keep policyholders happy.

Insurers often consider that today’s third party is tomorrow’s policyholder, and that if they deliver a fair and reasonable settlement speedily to an innocent third party, then that third party will become a policyholder at the next renewal.

Equally, a good claims service validates a broker’s recommendation where they have had products from multiple insurers to offer to their clients.

Proper analysis of accurately recorded claims data is vital to the insurer as well. Claims handling systems can now use intuitive learning to improve the consistency of claims data and ensure that definitions selected from drop downs are applied consistently to improve the accuracy of the information produced. Provision of this data is an essential service to underwriters to ensure accurate pricing and risk mitigation through policy conditions.

Handling of large claims that could breach reinsurance levels is a service to the reinsurer.

Professional handling of claims directly affects profitability through cost control and business retention and so provides a service to shareholders, employees and owners.

Given the range of claims teams’ ‘customers’, it is critical that claims staff demonstrate that they understand the problem, do the very best to help resolve it and, most importantly, communicate in a professional and mature way.

Properly delivered and sensibly communicated claims handling provides a service to policyholders, third parties, underwriters, reinsurers, brokers and shareholders.

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The claims experience is the shop window by which the industry is judged by its customers, and to a large extent by policymakers, regulators and the media. It is when the fundamental promise on which insurance is sold–that insurers will come to your aid if the worst happens—is put to the test. This to me is what ‘Claims as a Service’ is all about—meeting customer expectations when they need our product the most. Getting it right is fundamental to achieving greater trust in our industry. It is that important. And insurers that build a reputation for fast and fair claims handling can also build themselves a competitive advantage.

We should remember that, across the board, insurers are delivering on their claims promises. For example, 98% of motor, 87% of travel and 83% of home insurance claims are accepted. Paying claims as quickly and as efficiently as possible should never be seen as an achievement, but as best practice. Customers rightly expect insurers to live up to the promise they made at the point of sale.

The recent experience of one of my colleagues springs to mind. On losing a denture while eating a sandwich, he phoned his home insurer and was surprised to learn that he was covered. He then emailed his insurer the details and by the end of the day, the money to replace his missing denture was in his bank account. Every year, there are millions of claims paid with this level of efficiency and service. But it is the claims that, for whatever reason, don’t run as smoothly that can cause longer lasting reputational damage for the brand and the wider insurance industry.

Insurers constantly review and update their claims handling processes to meet ever rising customer expectations and, in the digital age in which we live, we are likely to see continued innovation in claims handling in the future.

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Claims as a service has to start with the customer and our supply chain (brokers and coverholders): our ‘why’, developing ‘what’ the flexible and bespoke claims servicing model needs to deliver. This includes:

• An enhanced customer experience
• A modern, attractive and world-leading claims offering and service
• A customer-centric claims culture and profession
• Transformational technologies and processes

We also need to adapt to ‘how’ it transforms us along the way, not just to ensure we catch up with other markets and competitors, but to ensure we overtake—the question is are we going to disrupt ourselves or be disrupted?

We are often distracted from how we service policyholders, brokers and our supply chain, giving them a bespoke experience and solution via personable interactions with emotional intelligence. We are distracted by the transactional data and processes that take up too much time of a claims professional’s role, and often we cannot relate the traditional claims service of the London market with the services we receive when we are in the shoes of a consumer. Being focused on the customer, whoever they are in our value chain, and seeking to deliver benefits to them is key.

It starts with the culture and people—a customer-centric approach is required, supported by the technologies and tools that can be used to spend the time servicing, not processing, and engaging, not reporting, while understanding our clients’ needs and expectations and, more often than not, surpassing them.

Until the next time, although that next time might be in a world and model when we can mitigate the loss and advise preventive measures, enhancing the customer’s experience pre-loss, not just post-loss.

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A claims service should be focused on serving the customer to improve their experience or their anticipated experience and ensure that where a policy responds, it does so quickly and efficiently—ie, an excellent claims experience should simplify the customer’s access to their insurers (digital claims platforms/apps) and move away from a traditional transactional insurance experience towards one that creates value (through customer loyalty).

Improving process through the application of digital solutions and automation should be utilised where they provide an efficient and effective solution to serve the customer purpose, therefore improving outcomes and customer satisfaction.

Equally, this allows organisation resource to be better utilised away from administrative tasks to areas where it adds the greatest value in the claim journey, serving the customer through applying technical expertise and defending customers at times of need with a personalised approach.

 

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An outstanding claims service is an attribute by which the London market has always sought to distinguish itself. Insurance, by definition, is a trade that relies entirely on the trust of its clients that companies will meet their contractual obligations. The promise to pay is the foundation stone upon which our modern global industry has been built and London has developed its position as the world’s principal business hub.

Famously, while some insurers were denying claims for fire damage after the San Francisco earthquake in 1906, Cuthbert Heath instructed his agent to pay “pay all of our policy-holders in full, irrespective of the terms of their policies”. Establishing a reputation for reliable claims settlement has enabled the London market to remain an important trading partner for US clients ever since.

London continues to be at the forefront of industry developments designed to improve the claims experience for policyholders. In recent years, for example, it has expanded the use of electronic claims files, speeding up the provision of claims information to multiple insurers and allowing cases to be reviewed and responded to online.

Last year, meanwhile, we introduced a single claims agreement party model. This initiative enables quicker and more efficient authorisation of claims by allowing policy leaders to agree non-complex payments of up to £250,000 on behalf of following carriers.