David Pieffer | Claims Journal | July 8, 2019
What’s worse: An incident that caused an insurance claim or the claims process itself? Ask a policyholder who has recently lived through a homeowners’ insurance claim process and the results might not be as lopsided as one would assume.
Whether it was a run-of-the-mill roof leak or catastrophic disaster, the vivid memory of an insurance claim lives on with the customer long after the mess has been cleared and the damage repaired.
In fact, our recent Property Claims Satisfaction Study, which examines the drivers of customer satisfaction of over 6,000 homeowners’ insurance customers, found that managing the stress that surrounds a claim is one of the top factors determining how the customer perceives the entire process. It is also an insurance company’s optimal window to make their customers feel at ease when the customer has to submit the first notice of loss.
The Window of Opportunity
On the surface, these takeaways may seem intuitive. After all, a property claim usually goes hand-in-hand with a rush of emotions, from anger and disbelief that the incident happened to regret and sadness of property lost that could have carried sentimental value. Owners that have to file a claim have enough on their minds, and an insurance company that can make the process easier is sure to ingratiate itself to a frazzled customer. But what’s most resounding is how impactful an insurance company’s actions on the customer’s very first call can be.
Our study found that one of the two most important factors determining customer satisfaction with the entire claims process was how at ease the customer felt after submitting the first notice of loss, and how the insurance company addresses the customer at the first notice played a massive role in making the customer feel more at ease. Companies that provided a clear understanding of the claim process and claim length, showed empathy for what the customer was going through, answered all of the customer’s questions during the first notice of loss, and clearly stated the next steps in the process substantially improved the customer’s overall satisfaction with the claim because they made the customer feel more at ease.
Unfortunately, just 64% of customers reported feeling more at ease after finishing the first notice of loss interaction, which is the lowest compliance rate among the top five most impactful indicators of satisfaction. Compare that against the top indicator of satisfaction, meeting the customer settlement expectation, which posted an 88% compliance rate for the industry.
An Empathetic Model
Some carriers are getting this message. Many insurers have abandoned more traditional “intake models” for an “adjuster model,” which allows for more individualized attention to a claim. Carriers that have taken this level of empathy further and created a robust first notice of loss process that helps customers with tasks such as coordinating an estimate or setting up a remediation contractor, along with providing details on coverage and deductibles, have also made meaningful strides.
In fact, the more a customer could accomplish during the first notice call, the higher their satisfaction and the more at ease they felt, which in turn, drove higher levels of overall satisfaction. Additionally, respondents said that carriers that were able to outline the claim process, construct clear timelines, and relay next steps all during the initial call, had levels of satisfaction a stunning three times higher than when they did not provide this clarity at first notice.
The key for human beings to feel safe and secure is some degree of predictability. A property claim upends that whole equilibrium. No one can anticipate the day that they’ll walk into their home to find a toilet handle got stuck down and left their basement flooded with water, or a bolt of lightning unexpectedly set their “She Shed” ablaze. That’s why calmly and effectively managing the claims process is so vital to providing value to policy holders.
Claims professionals know the process, and they know what will happen next. Customers don’t, and those who feel like they’ve just had their lives turned upside down, even for a moment, want to be guided by a steady hand. Insurance customers view their premiums as a cost of doing business; a line item on their budget that they want to keep as low as possible, and as a result, will stay agnostic about which company they use to get the best price. Carriers have to recognize that when a moment of need does arise, that is the time where they can build their value. The ones that are prepared will not only reap the rewards of happier customers, but more loyal ones as well.