2022 saw a ban on the practice of price walking, resulting in fewer people shopping around for their insurance at renewal^[i].  Customer experience has always been a prime focus for the insurance market. Assuming that a consumer’s risk hasn’t changed in the past year, consumers are seeing little difference between new business prices and renewal prices. Because of this, there’s a much greater need to deliver a great customer experience at claim to help retain business.

This presents the question; what do customers expect from their claims experience, and what can be done to make their experience as positive as possible?  The latest Public Trust Index from the CII[ii] shows that the cost-of-living crisis is causing consumers to want claims paid faster and feel more in control during the claims process. The speed of claims rose from the seventh highest priority for consumers in July 2021 to the third highest priority in July 2022, while control over the claims process moved up three places to the sixth highest priority over the same period.

An additional study of 1000 consumers[iii] has found that more than 1 in 5 insurance customers expect claims to be resolved within hours, and 100% of 18-24 year olds expect a resolution on an insurance claim within one week.

This is against a backdrop of claims inflation, with increasing pressure to reduce costs where possible in the claims process. Keeping customers happy and reducing claims costs are not mutually exclusive objectives. After all, settling a claim quickly results in a quick resolution for the customer at a potentially stressful time, and efficiency in the process for an insurance provider. This comes down to using data to create a touch-free claims experience to reach a fast and frictionless settlement for the vast majority of claims, leaving claims teams to focus on more complex cases.

It’s vital to remember that the majority of claims are genuine, and it is up to us as insurance professionals to verify that the customer is who they say they are, and their claim is authentic.

The powerful combination of claims history for the person, and the asset across home and motor at First Notice of Loss (FNOL), will help to quickly understand the context for the new claim. By doing this, insurance providers can understand the historical claims on a property or vehicle, which can be valuable in helping to route the claim correctly. By looking at both prior home and motor claims, it’s also possible to understand consumer behaviour a lot better and identify potentially fraudulent or opportunistic claims quickly.

For example, knowing that a vehicle had a recent claim for damage caused by an accident, or that a roof was repaired in the past year, may help identify if claims are being made for pre-existing damage.  Essentially, it would allow conclusions to be made at speed to ensure that genuine customers are settled quickly.

Prior claims data for a household through LexisNexis® Precision Claims is set to change how insurance providers manage claims, as well as how they underwrite risk.  But this is just one part of the picture! Bring in vehicle-centric data, such as the ADAS features on a specific vehicles or geospatial data intelligence on perils risks, and a more detailed picture of a claim can be built to ensure routing decisions are quick and correct.  As climate change accelerates, the use of data to predict floods and windstorm events for example will also enable claims teams to alert customers to the impending risks and help avoid some claims losses.

The recurring theme is that data can streamline key decisions to enable a better claims experience.  As the Financial Conduct Authority (FCA) rolls out its Consumer Duty regulations[iv], insurance professionals are under even further pressure to ensure that the customer is at the heart of what they do, and intelligent use of data can only help in this regard.

by Kajal Vakas, Senior Vertical Market Manager, Claims, LexisNexis Risk Solutions, Insurance, U.K. and Ireland 

References:

[i] https://www.consumerintelligence.com/articles/have-pricing-reforms-changed-consumer-shopping-behaviour

[ii] https://www.cii.co.uk/news-insight/media/press-releases/articles/cost-of-living-crisis-changes-consumer-s-claims-expectations/102244

[iii] https://resources.sprout.ai/consumer-research-report

[iv] https://www.fca.org.uk/news/speeches/rolling-regulation-forwards