Probably nothing in the insurance industry is as crucial or as delicate as the claims process. There’s a lot riding on it. There’s a lot that can go wrong for both customers and insurers. Now, insurance telematics is redefining claims on both fronts.
Claims and customers: satisfaction at risk, churn to follow
In the conventional business model, customers interact with their insurer only every 6-18 months. In any other industry, that interval would seem geologic in scale. Those long silences are only interrupted when there’s bad news to report: when a customer has to file a claim. With so few interactions to start with, a negative experience in claims can wreak havoc on retention.
Even when things go smoothly, the claims process brings churn. “Although a large majority (86 percent) of insurance customers who have submitted a claim in the past two years are satisfied with the way it was handled, 41 percent of those who have submitted a claim are still likely or very likely to switch to another insurer in the next 12 months,” Accenture reported.
Claims and insurers: costs and liabilities pose a challenge
Of course the claims process matters to insurers, too. The First Notice of Loss (FNOL) interval is never as speedy as one would like. Claims fraud is a perennial risk. Controlling the costs and liabilities involved hinges on the speed, quality and amount of evidence you can gather.
Telematics provides notable relief on both counts, for customer as well as insurer. For the customer, it can make claims painless, while facilitating the communication they need in order to manage expectations. (That in itself is a major component to customer satisfaction, J.D. Powers found)
Meanwhile, telematics empowers insurers with real-time, actionable data they can use to expedite the process and, if desired, to strengthen their bond with customers by selling additional services.