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Strategies for addressing policyholder satisfaction

Four strategies for addressing policyholder satisfaction with new digital claim technologies while keeping disruption to a minimum.

Last week we discussed the challenges that insurers face around implementing new insuretech in the claims process. This week let’s take a look at some strategies you can use to build a more robust digital approach while keeping policyholder disruption to a minimum.

Strategy No. 1: Look for ways to transition policyholders to digital claims reporting. A recent J.D. Power survey found that satisfaction with the auto claim reporting process is at an all-time high, driven primarily by increased satisfaction with first notice of loss. It’s then easy to see why auto insurers are hesitant to move first notice of loss to a digital platform.

However, given that increases in auto claims severity are outpacing claims frequency, the need for increased efficiency in auto claims processing is critical. It’s one area where digital holds strong potential to bolster both operational productivity and policyholder satisfaction.

Strategy No. 2: Streamline claim payment—including multiparty payment—with an electronic approach. Most auto insurance companies continue to deliver most claim payments by check. However, checks lengthen the time it takes to get a claim paid, decrease efficiencies and add administrative costs. It results in policyholder frustration when policyholders have multiparty payments and must wait for physical checks to be paid and physically endorsed before regaining access to their automobile. Paper payment also leaves auto insurers vulnerable to trust erosion: 78 percent of organizations were hit with payment fraud in 2017, according to a 2018 Association for Financial Professionals (AFP) survey.

Moving from checks to electronic payment could boost policyholder satisfaction while delivering significant cost savings for auto insurers. According to the AFP, check-based payments are 10 times more expensive than electronic payments.

Strategy No. 3: Explore the use of artificial intelligence (AI) to automate claims processing. A McKinsey study found digital claims transformation has the potential to reduce claims expenses by 25 to 30 percent through increased efficiency. It’s also a move that could increase policyholder satisfaction by 20 percent while increasing claims effectiveness. One approach is to use AI to:

  • Walk policyholders through the claims submission process—digitally
  • Detect instances of fraud before they occur
  • Analyze scanned documents and uploaded images to determine whether the loss is covered under the policyholder’s contract
  • Quickly provide repair estimates after an accident
  • Prioritize high-severity claims submissions for claims adjusters

Strategy No. 4: Use telematics data to strengthen education around safe driving. It’s projected that 35 percent of the insurance market in North America will be usage-based by 2024. With that trend in mind, it’s a good idea for P&C insurers need to finetune their approach – and enhancing the level of digital customer service that policyholders with a telematic device receive is a critical step. There is a trend to provide increased value by offering driving tips in as close to real-time as possible, such as immediately after the trip has been recorded. These tips could be pushed out through mobile alerts via the driving app.

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