The Twin Track Approach to Successful Claims Settlement.
In the world of claims and, especially, at the interface between claimant and insurer we often hear of the need to deliver ‘extraordinary’ service. With claims being seen by some as a differentiator from the competition it is argued that an ‘extraordinary’ level of service results in greater client loyalty, renewal behaviour and advocacy
Some of these assertions (because they are rarely backed by objective evidence of behavioural changes) may well be true but it seems to me that the claims world continues to confuse what we deliver with how we deliver it and, in doing so, misses the real demand from customers and the real opportunities to save time, fulfilment cost and administrative expense
A recent visit to my local PC World store serves to illustrate the point.
Designing a Great Claims Product
My goal was to purchase good quality Bluetooth earphones to work with my iphone. In this instance the product I was seeking to buy and use was obvious. In truth, had I not needed to ask a few questions about functionality then I could have bought the item online and had my immediate needs fulfilled. However, I chose to access the additional service package on offer which consisted of assistant knowledge, easy comparability, testing of items etc
The product that I required and the accompanying services available to me were clearly differentiated and easily understood. Had I chose to dispense with the additional services then no doubt the product itself would have been cheaper
This is where the world of claims settlement – particularly in personal lines – becomes confused and starts to incur unnecessary costs whilst often failing to deliver what the claimant is really looking for. The product that we offer is that of claims fulfilment – repairing a car, fixing storm damage, replacing lost goods, repairing water leaks, replacing carpets, and all the other events that insurance covers
Alongside and running throughout claims fulfilment are the additional and accompanying services that we also throw into the mix – claims handler knowledge and advice, 24 hour access, on-line tracking systems, work guarantees, sourcing replacement goods etc etc
This latter group of what are essentially sales and after sales services may well have a key part to play in securing customer satisfaction and this will inevitably vary considerably according to customer type and claim complexity as well as the quality of the services supplied. However, do not confuse them with the core product requirements of the customer – the need to stop a leak, get a vehicle back on the road, replace the stolen watch and customer demands for speedy and fair settlement as part of their core product requirements
Learn from EasyJet
The significance of viewing the role of claims settlement in this dual-definition split between product offer and accompanying services is that it allows us to identify where the real problems might be, the opportunities to improve on the core of what we do, and to tackle those underlying cost drivers that only ever seem to drive expenditure upwards. Customers are usually pretty clear on what they really want in order to resolve their problems and everything else is an optional extra
I’m not suggesting that claims departments adopt a Ryanair or EasyJet approach to customer management but both of these businesses (which are amongst the most profitable airlines in the world) are absolutely clear that their core product offer of cheap flights to foreign climates is where they will deliver what is required of them – everything else (including baggage, allocated seating, check-in etc) are additional accompanying services. In this instance, they will seek additional payment and, of course, if you don’t want any of these extra services then your costs as a consumer and as an airline are lower
Similarly, in the world of claims our job is, firstly, to focus on those better, cheaper, faster ways of delivering the core product of claims fulfilment. If a simple building repair takes 4 weeks when the actual work involved warrants only a few days labour then we must question our own supplier, project and logistics management. Why is it that many insurers are still not able to provide same day settlement of cash offers? Innovation in the world of motor claims and repair is better than in many other sectors but still we struggle with the simple task of intelligent deployment of repairs that would reduce costs and cycle times
By not confusing the claims ‘product’ with the accompanying claims ‘service’ the world becomes a lot clearer and it’s easier to design and deliver great solutions that meet customers’ real needs
Eddie Longworth is Director at JEL Consulting
Seguici sui nostri canali social: Facebook e Twitter
Leggi tutte le nostre notizie cliccando QUI
Eddie Longworth