Winning Over the Policyholder: How Claims Can Help Improve Carriers’ Relationships with Insureds

Many years ago, as the holiday season wrapped our home in a festive embrace, a tranquil evening turned into a night we’d never forget. Our family was enjoying the warmth and peace of the season when a fire broke out, shattering the calm.

Miraculously, we all made it out safely, but our home was severely damaged, taking with it not just the roof over our heads but a treasure trove of sentimental belongings, including the carefully chosen Christmas gifts that had been hidden away.

In the midst of this chaos, we turned to our insurance company, and to our relief, the process was smooth. We filed our claim, and in what felt like a blink, we received the support promised by our policy.

This experience left us with a deep appreciation for the value of insurance. Unfortunately, this is a perception that not enough policyholders share today.

Consumers’ negative perceptions of insurance are rarely rooted in direct experience.

There are two types of policyholders: those who have had a major claim and those who have not.

When you’ve been through a devastating loss and your carrier partner has made you whole, it’s easy to appreciate the value of insurance. But policyholders whose only interaction with their insurance carrier is to pay the annual premium may not see this value as clearly. It’s not uncommon to feel that insurance is something forced on us – as a homeowner because your mortgage requires coverage or as a motorist due to state regulations. Nobody likes to be told what to spend money on, and if all you’ve done is pay money in premiums, you might feel like you’re wasting your money.

Skepticism towards insurance can deepen when people hear about problematic claims. These stories can take impressions from a vague dislike of the insurance industry to a genuine mistrust towards an insurance provider, fueled by tales of unresolved claims and unaddressed issues. Even though such stories reflect only a tiny portion of insurance experiences, the emphasis placed on negative anecdotes can magnify their impact, leading to an exaggerated perception of the problem.

Improving policyholders’ perceptions begins with awareness.

The claims adjustment process allows insurance companies to investigate and decide on their responsibility regarding a claim. Adjusters are tasked with creating detailed estimates of damages and providing an exact account of the loss. Sometimes, policyholders might feel they’re being unfairly scrutinized or offered less than they expect, particularly when comparing the adjuster’s figures to a contractor’s estimate. However, it’s important to remember that adjusters have specialized training to accurately assess the market value of labor and materials for the specific loss in question.

There are many common myths about insurance and the claims process that need to be debunked and reframed for consumers.

One widespread misconception is that insurance should solve all problems following a loss. In reality, a policy is designed only to return the home to its pre-loss condition and is not meant to cover issues unrelated to the event. When homeowners don’t understand this distinction, they may be disappointed with the reimbursement they receive under their policy. To eliminate this disconnect, it is incumbent upon the industry to clearly communicate that insurance isn’t a catch-all maintenance plan, and regular upkeep of a home remains the homeowner’s duty.

Another common myth is that insurance companies aim to minimize claim payouts to boost profits. To the contrary, ethical insurance firms train their claims teams to settle valid claims swiftly and accurately. In light of the industry’s significant challenges with micro fraud, claims handlers will thoroughly investigate to distinguish between legitimate claims and those that may be fraudulent or frivolous, and this may be misconstrued as an attempt not to pay. But though policyholders may misinterpret these actions as evasive, they are actually undertaken to ensure fairness.

Insurance operates on the principle that the cost of fraudulent claims is distributed among all policyholders through higher premiums. Consequently, preventing fraudulent and unjustified claims is crucial for keeping insurance affordable. This effort benefits policyholders significantly, even more than the insurers themselves, by helping to maintain reasonable insurance costs. Communicating the importance of this process (and its impact on a policyholder’s bottom line) can go a long way toward eliminating negative perceptions.

Digital technology can create efficiencies to improve the claims experience.

The journey to efficiency begins with the first notification of loss. Claims vary greatly in complexity, potential value, and the psychological impact on the policyholder, making a one-size-fits-all approach inefficient and costly. Artificial intelligence (AI) can be leveraged to automatically categorize claims, routing them through to the most appropriate processing path. Certain claims can even be flagged for remote assessment, which can be more cost-effective than dispatching an adjuster for an on-site evaluation.

The integration of AI and digital processes into claims handling can also help meet and exceed consumer expectations. When a policyholder wants a fast, frictionless resolution, digital solutions are particularly ideal. Many people today prefer handling everything online, from digital natives to busy individuals who would rather document their claim on a tablet themselves than wait for an adjuster to visit. These technological advancements are key to achieving faster resolutions, benefiting policyholders and insurers alike.

A quality claims experience can go a long way toward restoring policyholder trust.

Beyond providing accurate and timely estimates, adjusters’ soft skills play a vital role in shifting consumer perception. The circumstances that lead policyholders to file claims can be disruptive and distressing, and claims processing is largely rooted in service and showing empathy to policyholders as a result.

When an adjuster quickly arrives, listens attentively to the claimant, communicates in a personalized manner, pays attention to all details, and makes the process as efficient as possible for a swift resolution, it significantly helps rebuild trust with the policyholder. Insurance companies and claims organizations that invest heavily in training their staff in these areas can reap the rewards of improved relationships.

Often, the claims adjuster is the only contact a policyholder may have with their insurer, making their role crucial in shaping the future of the relationship. Whether handled internally or outsourced, the claims process provides a vital chance to impress the policyholder. With thoughtful, empathetic, quick, professional, and mindful handling, claims teams have the unique capability to win over the policyholder through a positive customer service experience and improve consumer perception of the insurance industry as a whole.

Millburn is COO, US Loss Adjusting, at Crawford & Company.