It costs six to seven times more to gain a new customer than to keep an existing one, according to Bain Consulting. For insurance companies, the claims process can make or break a customer’s experience, which is why it is one of the most important points in the customer life cycle.
By providing a satisfying and simplified claims process, insurers can increase customer retention and improve the customer experience. Those who are more responsive to policyholders throughout the claims experience will earn more dedicated customers.
The following techniques explain how insurers can modernize their process in an era of increased web usage and the proliferation of mobile devices, as well as tailor services to meet the unique needs of different customer segments.
1. Use Customer Communications Management Software
As customers increasingly demand intelligent, personalized claims communications, it remains vital that insurers use new-and customer-preferred-channels, in addition to traditional print methods.
Insurance carriers seeking a competitive advantage should upgrade legacy systems to more modern customer communications software that can efficiently process claims-from first notice of loss, estimates and appraisals, to communicating acceptance or denial, and ultimately settlement amounts and payments, as well as support of electronic delivery formats.
2. Process Claims in a Timely Manner
Today, consumers expect an accelerated and uncomplicated claims process from start to finish, facilitated by accurate and timely communications. According to the National Association of Insurance Commissioners, states have different rules for how long a claims process should take. For example, California requires an acknowledgment of all claims within 15 days. California insurance companies are required to accept or deny the claim within 40 days after receiving proof of the claim, and payment must be made within 30 days from the date settlement was reached. Texas insurance companies must acknowledge the claim within 15 days and must approve or deny the claim within 15 days after receipt of all requested information.
On the other hand, South Carolina rules state that insurance claims must simply be handled within a reasonable time period. With these loose guidelines in place, it is imperative that insurance companies make a customer’s experience as easy and as speedy as possible.
3. Reach Customers Through Multiple Channels
According to the 2010 J.D. Power and Associates “Insurance Shopping Study,” insurance customers, and particularly Generation Y, want more electronic communications and resources from insurers, but many are not receiving it. It is important to reach policyholders through channels that are most convenient to each individual.
By delivering claims communications through web portals, insurers can directly connect to content repositories that provide both intelligent and interactive documents to agents and brokers. Then, agents and brokers can deliver the information to policyholders via smartphone and tablet-based apps.
In addition to web portals, insurers that successfully deliver information through SMS, mobile apps and email channels will attract and acquire new customers, generate new revenue opportunities, reduce costs and increase customer satisfaction.