Like many industries, the global Life insurance landscape is changing. Two factors, in particular, are currently making an impact. Firstly, as the global economy continues to recover from the crisis in 2008, the number of life insurance policies purchased is on the increase. Secondly, the way consumers communicate with vendors has changed the world we live in. Consumers seek similar methods of communication from their insurance provider – i.e. via digital channels
In fact, according to the 2014 Accenture Claims Customer Survey, 50% of policyholders said they would never use an insurer who didn’t offer digital channels. This is a major challenge for insurance firms’ IT departments to meet this need while having to cope with legacy systems.
One of the most common topics discussed in the industry today is the technology that powers the claims life cycle. Today’s consumer expects a different experience compared to a decade ago. The advent of social media means that insurers need to pay heed to the claims process more than before. This is because feedback on the claims experience is more visible than ever before.
For many, purchasing an insurance policy is still considered risky. The wrong product or coverage may leave them in dire straits at the time they need to claim. For this reason, today’s consumers research policies online and use comparison sites, but often still prefer to discuss with an agent before actually purchasing.
Perhaps for the first time, direct consumer feedback of the claims process is available to potential new consumers. Therefore, perhaps for the first time, direct consumer feedback of the claims process is influencing purchasing decisions.
This brings a new spotlight on claims and an added emphasis on claimant-centricity as a contributor to sales success.
Making a Claim
Traditionally, the claims process in life and health markets has been paper driven and cumbersome, albeit often initiated with a phone call to the insurer.
Forms would be posted out to be filled out and returned with all of the relevant claim information. Of course, delays in gathering the relevant information and any delays in the postal service to deliver the forms often slowed down the whole process.
Today, sending forms over email is more common and provides the beneficiary with a more immediate result, improving the claim experience. Even better is an online portal or mobile application, that allows the beneficiary to make a claim, filling in the forms electronically and scanning in the relevant documents if necessary, increasing the efficiency of the entire process.
Similarly, for payments: After sending the forms by post, the beneficiary had to patiently wait for a claim decision before the insurer sent a cheque out by post. This manual, paper process added days to the process; the beneficiary then had to consider how best to get the cheque to the bank within opening hours to get the payment processed.
Today, most insurers will complete an EFT payment directly to the beneficiary’s bank account.
These examples above should be considered as relatively low-hanging fruit. To truly make your claims process more claimant-centric, you need to review your existing business process and adopt technologies that can automate managing the complexities that emerge in life & health claims.
For example, a death claim might in itself be simple, but the interrelationships often are not. There could a claimant(s) that is not a beneficiary (i.e. one or multiple executors), or there could be multiple beneficiaries. There may even be an agent involved. Each of these parties may have a different expectation of how a claims process should feel and are almost certain to have different preferences for communication.
Conversely, a critical illness claim might have a single claimant (or two if you include their spouse/partner) but has a more complex diagnosis, payment calculation, payment structure, history, log, rehabilitation plan, and so on.
Therefore, ‘claimants’ come in different guises and may have different needs at this critical point in your relationship with them. Becoming more claimant-centric is not just about the speed in which you handle the claim, it is as much about how you handle it.
Efficiency and Effectiveness
A decent, modern claims platform can provide slicker claim intake, auto-adjudication where practicable and sophisticated (and fully auditable) calculations & payment processing. That’s all good and really helps the claims process.
But just as important is having information about each element of the claim available to claims handlers at every stage and to claimants, agents and beneficiaries (as appropriate) via multiple channels of phone, email, portals & apps. Being able to communicate what stage the claim is at (and what happens next) in this way makes the process become more claimant-centric.
Adopting the best claims technology can make a claims department more efficient. Adopting the best technology to become more claimant-centric will make the claims department more effective.
Given that claims experiences will increasingly influence purchasing decisions, it is time for the claims department to be moved to the forefront of the business and leverage new technology solutions to improve claimant-centricity to meet the needs of today’s consumer. Especially as this is the point in their relationship with you that you are needed the most.
With 65% of insurance customers willing to switch insurance companies based on an adverse claim experience, it is time for insurance carriers to think about how claimant-centric their claims processes are.
Depending on the current state of your claims department, next steps will vary. This guide can help you and your team to build the business case to push a change through your business, sooner rather than later.
And of course, if you are still operating on an old legacy system you should begin to consider a claims system upgrade.