By: Pradeep Nimje, Business Analyst, Insurance

The rapid acceleration of digital technology in the last few years has transformed the landscape of insurance claims lifecycle. All thanks to implementation of disruptive technologies like Artificial Intelligence (AI), Machine Learning (ML), chatbots, remote assessment, mobile self-service apps and integrated communication platforms.
These technologies have powered operational efficiencies, boosted productivity and enhanced customer relationships. Speaking of which, technology has power to transform the customer journey and experience, which plays a crucial role across the insurance value chain, especially during the claims reporting and settlement process. That’s why in the digital age, insurers must ensure an intuitive and frictionless omni-channel experience for their customers.

Customer (Experience) is king

Compared to other industries, the customer journey in the insurance industry is unique. That’s because it is a subscription-based business, where customers pay in advance and get the value of their purchase later in the form of claim settlement. This is the reason why it is called the ‘moment of truth’ for insurers.

The cost of acquiring a new customer can be up to 10 times the cost of retaining an existing one. Even a minor surge in retention rates may lead to major savings on the acquisition cost and increase premium revenues. Studies have shown that there is greater scope for improvement in the customer satisfaction levels. The reason being a huge gap between customer expectations and feedback on paper, and the claims settlement process on the ground by insurance companies.

Premium experience through technology

The Property & Casualty insurance market seems to have benefited on various technology inclusions and their advancements. For instance, insurers can employ advance data analytics such as smart data capture and voice/ image analytics. This includes First Notice of Loss (FNOL), verification and validation by carriers , triage claims, initial fraud detection analysis, and enabling a rapid settlement process. On the other hand, receiving, classifying and processing claims using self-service applications, employing proactive communication and facilitating ease of exchanging information has a significant impact on the life cycle time and claims expense.

With digital self-servicing, straight -through processing and lower call volume, insurers can increase their ooperational eefficiency by 30%. However, channel explosion (Omnichannel intake) has raised the stakes for delivering quality experience across age demographics of customers. Younger policyholders are digital-native and tech savvy. This audience demands a one-click buying experience, subscription-based journey, product recommendations based on purchase history, and social media reviews. Plus, they prefer personalized suggestions based on their own purchase history. An instant claims process is likely to be appreciated, shared and commented on by theses consumers on social media. The bottom line is that one good experience of the claims process can bring instant fame for the insurer. And one bad experience can affect reputation and bring customers/ prospects to switch to competitors.

What are the challenges?

As per a recent JD Power property claims satisfaction survey, some of the key challenges in achieving higher customer satisfaction are as follows:

Time = customer satisfaction: Customer satisfaction score among claimants who received accurate claim length estimates is 151 points higher than among those whose claim took longer than expected.
Concierge-type services at FNOL stage enhances customer satisfaction and retention: There is a significant hike in the Net Promoter Score and customer satisfaction when carriers book a hotel appointment for a claimant immediately upon FNOL.

Be the beneficiary of a reimagined customer experience

In the modern digital age, customer experience and journey should be the core of the claims process strategy. Thanks to digital technologies and social media channels, customer touchpoints are truly 360-degree, 24/7 – be it customers interacting with insurers on Twitter, or speaking to an insurance agent on a video call.

Breakaway insurers will need to seize the ‘moment of truth’, fortify customer loyalty and foster growth. For that, they will need to leverage an extensive set of data and adopt enhanced analytical tools and techniques. In fact, data & analytics is one of the best ways for insurers to synchronically improve financial returns, distinguish from competitors and deliver a seamless and personalized customer experience. Finally, insurers must maintain consistency and transparency of communication across all channels in their value chain.