Claims complaints cost more than money—how data can help

Kajal Vakas
Senior manager, claims, UK and Ireland, LexisNexis Risk Solutions

Insurance providers that invest in getting to know their customer can provide a more personalised claims process

The Financial Conduct Authority’s (FCA) ban on price walking has levelled the playing field when it comes to renewals. The decision to stay or leave an insurance provider is highly likely to come down to the claims experience the customer may have had, or indeed their own research of claims experiences via word-of-mouth or review sites. However, according to the latest analysis from benchmarking platform Insurance DataLab, customer satisfaction amongst insurers has taken a dip. Meanwhile, complaints made to the Financial Ombudsman Service are rising and the FCA has found that some insurance providers are lagging behind on claims acceptance rates.

Insurance providers have invested heavily in getting the claims experience right, knowing that the biggest cost is the knock to their reputation and a hit to their retention rates, but they have two big challenges on their hands: The first is how best to expedite claims so that complaints concerning the length of time it takes to settle a claim are reduced—‘key to key’ time in motor claims. The second is how claims handling processes could be improved so that the customer’s needs are put front and centre and problems don’t escalate due to communication failures. A prime example of this is ensuring that an advanced driver assistance (ADAS) equipped vehicle is sent for repair to a garage that is fully equipped to repair and recalibrate those specific ADAS features. This can be easier said than done.

Coming to accurate conclusions and routing claims quickly is at the heart of claims excellence, and insurance providers who tap into the power of data and analytics can dramatically improve the claims experience for policyholders.

This process might begin by knowing as much as possible about any past relationships with the customer. Have they had claims in the past with the insurance provider? Do they hold more than one policy with the brand? How long have they been a customer? Have they ever lodged a complaint? These types of insights at first notification of loss can help personalise the experience—even if the process has a level of automation.

Knowing the customer in this way comes down to creating the single customer view using linking and matching technology to create one true record of a customer based on every touchpoint they have had with the insurance provider. This single customer view isn’t limited to benefiting claims—it can be used to great effect at every interaction and provides the basis for accurate data enrichment.

Data enrichment in the claims process can also help automate routine claims, freeing up resource to focus on more complex claims where the human-touch and expertise is crucial. Data on the person, property or vehicle may help answer questions and validate responses, speeding up the claim verification process and smoothing the customer experience. This helps to mitigate the risk of complaints.

Historical claims gathered from across the market can also help evaluate a new claim in the context of any past claims from across home and motor, for the individual or the asset. With knowledge of the claim type, circumstances and settlement, claims handlers can help mitigate fraud quickly and effectively, speeding genuine claims through to settlement.

Injecting real-time vehicle valuations data into the claims valuation process can also play a big part in improving customer satisfaction rates, especially as the FCA warns motor insurers not to undervalue cars.

Finally, recognising that society is made up of complainers and non-complainers, there could be a role for data to play in understanding the risk of a customer complaining and dealing with that claim in a way that recognises that risk.

Consumer expectations of customer service and claims settlement are on the increase and Gen Z now expects claims to be settled within a week. As greater demands are placed on claims handlers, insurance providers that invest in getting to know their customer can provide a more personalised claims process, ultimately improving retention rates, lowering complaints costs and protecting their biggest asset—their reputation.

Image source: Canva and LexisNexis Risk Solutions

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