Customers can accept bad news. What they struggle to accept is not knowing why. As claims decisions become increasingly automated, transparency is becoming one of the most important measures of customer trust.

There is something quietly fascinating happening in claims.

For years, the industry’s innovation story has been almost entirely about speed. Faster notification. Faster validation. Faster settlement. Faster repudiation. Every conference presentation, technology pitch and transformation programme seems to begin with the same proposition: how quickly can we get to a decision?

This is a good thing. I like it.

Modern claims platforms can analyse policy information, claims histories, image data, fraud indicators and behavioural patterns in seconds, delivering levels of consistency and efficiency that would have been unimaginable a decade ago.

But increasingly I find myself wondering whether we are solving the wrong problem. The industry has become exceptionally good at making decisions. What it has not become nearly as good at is explaining them.

Every Claimant Asks the Same Question

Strip away the technology, the regulations and the process maps, and most claims ultimately arrive at the same moment when the customer receives the decision.

At that point they rarely want to know what software reached the conclusion. They are generally uninterested in predictive modelling, machine learning or data enrichment. Instead, they ask the most natural question in the world.

Why?

Why was the claim paid? Why wasn’t it? Why was the settlement lower than expected? Why was the damage considered wear and tear rather than an insured event? Why did the policy payout not be ‘what it says on the tin’?

Fairness is Only Useful If People Can See It

The insurance market sometimes falls into an understandable trap.

If the decision is correct, surely that should be enough. Except that it rarely is.

A perfectly justified decision can still feel arbitrary if the reasoning remains hidden behind generic language, policy references and templated correspondence. Customers do not experience fairness through internal governance frameworks. They experience it through communication.

A claimant may disagree with a decision and still accept it if they understand how it was reached. Equally, a customer may receive a technically flawless outcome and still feel aggrieved if the explanation is vague, legalistic or incomplete.

Those two scenarios produce very different levels of trust and a part of our aim as a sector is to produce the environment in which the claimant has complete confidence and belief.

The FCA is Looking At Us

This issue is becoming harder for the market to ignore. Recent evidence submitted to the House of Lords highlighted significant variations in claims acceptance rates across parts of the insurance market. Home insurance acceptance rates can vary substantially between providers, while contents insurance demonstrates similarly wide differences in outcomes

That does not mean somebody is necessarily getting it wrong.

If the same loss could potentially receive different treatment depending on the policy purchased, how important is it that customers understand the reasoning behind the outcome? It is a truism that customers do not always understand the policy they have purchased, so explaining the decision rationale becomes even more important.

Reverting to the ‘computer says no (or yes)’ is not sufficient. And the greater the complexity, the stronger the case for transparency.

The industry measures settlement times relentlessly. We track indemnity spend with forensic precision. We monitor leakage and fraud savings in minute detail.

Perhaps we should start measuring claimant understanding with the same intensity. Because understanding is often the point at which transparency becomes trust. And trust, despite all the advances in technology, remains the most valuable asset any insurer possesses.

Eddie Longworth, CEO, e2e Total Loss Claims Management- Writing in a personal capacity