It would be an understatement to say that the insurance industry has a few problems involving consumer loyalty, and claims issues certainly don’t help.
A recent Accenture Report found that 14 percent of consumers who submitted a claim in the last two years are dissatisfied with the way it was handled, with 83 percent of those customers planning to switch to another insurer in the future. Claims alone may not be enough to keep a customer loyal, but a poor claims experience has been shown to have a high correlation with future disloyalty. Not only does it significantly damage existing customer relationships, but friends and family will hear the negative news as well. Whether a claims issue is the fault of the insurer or the consumer matters very little because the end result is always detrimental.
Carriers must ensure that their customer communication management (CCM) platform is equipped to mitigate claims issues, but often don’t know how or where to begin. Below are some pain points of claims in traditional core systems and how a modern document management implementation into core systems allows for better claims experience for both sides of the process.
Operational issues refer to problems that arise during correspondence between insurer and insured regarding a claim.
Most operational claims issues on the side of the insurer generally happen as a result of repetitive and tedious tasks that hurt productivity and, as a result, their focus. Many legacy correspondence systems do not support copying and pasting for standard Office documents, including Microsoft Word, Excel or emails. Often, formatting will be altered, tables are lost and bullet lists become numbered lists, much to the chagrin and annoyance of a user, causing valuable time to be wasted. Correspondence is often clunky, involving a lot of retyping of information and overall slowing down adjusters’ ability to make a speedy claim. There is a positive correlation between length of claim and increase in potential errors. Using modernized customer communications technologies can boost productivity gains of 20 minutes per communication.
On the other side of the coin, claims issues can also occur during the new business process if the consumer wasn’t clearly educated on what the policy would entail. According to a recent survey, almost 40 percent of consumers said they weren’t confident they had adequate and appropriate insurance coverage. Good business practice indicates that any confusion is always the fault of the carrier, never the customer. While technologies help alleviate menial tasks during the new policy process, it’s important to leverage the information that a carrier knows about each customer to personalize their communications to ensure they know what their policy includes and if they are at risk for further damages not included with coverage they are about to sign on for. Being able to archive this customer information in a quick and efficient manner also prevents any disagreements around the subject during claims time.
Administrative work extends to everything that goes into preparing templates and configuring workflows – from wording, formatting, mapping of system fields and business rules. In traditional core systems, claims has a long and complicated publishing process akin to engineering Software Development Life Cycle (SDLC) and is disproportionate to the nature of typical claims correspondence updates, due to an issue with making simple yet time-consuming changes. Implementing mass changes based on internal rules or ever-changing regulations can create a significant burden for the carrier. With a modern CCM platform, carriers are able to make simple changes like updating a paragraph in a standard letter template, allowing any documentation to be pushed into the production library in less than 20 minutes as opposed to weeks, or even months. Additionally, standard letter components like header, footer, address blocks, signature blocks and legal/compliance language can be defined only once and reused across the board.
Legacy systems were often built with a single integration scenario in mind with many assumptions and restrictions that limit the ability to adapt and evolve the implementation to meet new challenges and opportunities. A modern solution should be built on flexible and open protocols that allow for the rapid adaptation and bilateral connectivity with other core systems such as policy or billing as well as other modes of communication (web, email, print, mobile). Carriers should be able to identify multiple integration scenarios for capturing, tracking and honoring customer preferences for correspondence delivery such as print, email and secured e-delivery. Another characteristic of a legacy system is that they tend to have built with other legacy technologies. An example of this detrimental scenario is if a carrier had built their legacy system on top of an old enterprise message queuing technology. There options for modern communications via web, mobile or even email become a monumental, if not impossible, undertaking.
Carriers need to focus on rebuilding the “coasts” of the insurance experience. This includes the new/return business side and the claims side. While the two appear on opposite ends of the spectrum, they supplement each other in a crucial fashion and mark two of the most important insured touch points. The simpler and more organized communication is between the two interactions, the less chance there is for claims errors in the process and the more trustworthy the carrier is perceived. A claim is a promise from an insurer and the very reason people desire insurance in the first place. If tightening up processes and communication to avoid a long painful claims dispute isn’t a priority – it needs to be.