Unique strategic position in insurance claims management: What do customers need in the event of a claim?
Our customer experience study shows that customer satisfaction within the insurance industry has never been higher. That said, satisfaction is not equally high in all areas. There is a need for action, especially in the area of claims handling. Insurers can achieve a sustainable, strategically unique position in customer interaction in this area by means of targeted optimization and differentiation.
As our study shows, insurance companies have succeeded in continuously increasing customer satisfaction in recent years. Unlike other touchpoints, however, customers find interaction with an insurer in the event of a claim to be a less positive experience. This means that in precisely those moments when insurers can make their value propositions a reality, they all too often fail to impress – and in the worst case, they lose long-standing customers. Insurance companies should therefore actively use the point of claim as an opportunity for strategic positioning in terms of customer interaction.
“Being different” and “being better” for a unique strategic position
For insurers, it is essential to offer customers added value in the event of a claim, in order to increase customer satisfaction. They can achieve this through better claims management (“being better”), for example, and by offering corresponding services that go beyond generic claims settlement (“being different”). The claim should be strategically positioned in line with customer expectations.
“Being better” through customer-oriented interaction
For the customer, making a claim is characterized by a high degree of uncertainty, stress and emotionality. With this in mind, the insurer needs to respond to the customer as empathetically, transparently and flexibly as possible. At the moment however, it is becoming apparent that insurers are not yet familiar enough with their customers’ wishes or do not actively address them. In the wake of the coronavirus crisis, the desire for a digital access channel has doubled compared to 2017 – but currently just under 40 percent of insurance customers have access to a digital contact channel with their insurers. While these channels are usually widely diverse (e.g. email, customer portals, app solutions, digital forms), customers value the various options differently. Most strikingly, structured channels such as digital claims reporting are perceived more positively by customers than unstructured channels (e.g. email). This result presents insurance companies with the challenge of understanding customer expectations and developing appropriate solutions. Focus areas should be based on the following aspects:
Considering that every other claim is reported in person or by telephone, the customer’s wish for an emphatic interaction with the insurer within this contact point should be proactively fulfilled.
One major criticism raised by customers in relation to the claims process is the current lack of transparency with regard to the requirements and further steps in claims settlement. Individual solutions that have already been successfully implemented within the market with the aim of improving this area include targeted push notifications, status tracking in the customer portal or the app or via the e-mail link, as well as an initial process description.
Demand for insurers to offer and switch flexibly between or link digital and analog communication channels has been intensifying, especially since the coronavirus crisis began. Aligning these routes to the customer segments and the associated expectations will be a key differentiating factor.
In order to ensure a positive claim experience – in line with the circumstances – it is therefore important to understand the specific customer requirements, to translate them into suitable solutions and to design them consistently in accordance with customer expectations. This is the only way to establish noticeably better claims processing that stands out from the competition. This approach allows an insurer to develop into a “best in class.”
“Being different” through individual, tailor-made claims management
Currently, only one in four customers considers the advice they receive in the event of a claim to be needs-based. From this it follows that the majority do not feel they are being looked after in a targeted manner, and they rate their interaction with the insurer negatively. Insurers who offer customers an individual and suitable solution and provide support that goes beyond standardized claims processing are again rated very positively – and around 25 percent of all customers would actively recommend the insurer. But which measures and solutions can be embedded within claims processing to offer added value? Starting points include the following:
Offering cost-neutral repair measures, such as painting a room in the customer’s preferred color following water damage
The ability to convert claims payments into vouchers that exceed the actual payout amount
Offering a flexible mobility voucher as an alternative to a replacement vehicle in the event of damage to a vehicle
A sustainability-oriented repair within the scope of the settlement, if desired
In order to offer customers effective value-added claims processing, it is important to know which offers are desired and viewed positively. If insurers take this into account, they can differentiate themselves from their competitors and increase customer satisfaction in the event of a claim. This makes it possible to develop a “unique selling point” (USP) in claims handling.
Combination of “being different” and “being better”
In order to achieve a unique strategic position, we recommend combining “being different” and “being better”. From our point of view, this is possible particularly through the combination of existing repair methods and innovative approaches, i.e. the creation of concrete added value as well as the flexible use of digital solutions within the scope of the settlement. The basic prerequisite for this is transparency in terms of customer expectations, understanding of quality and possible supplementary offers in the settlement of the claim as well as an overview of the use and functions of existing or planned digital solutions in the interface to the customer.
Would you like to discuss your questions and actions on the topic of customer experience in the event of a claim, or exchange further ideas? Please do not hesitate to contact us at any time.