The business of insurance is challenging. Highly complex, countless regulations and burdensome reporting, it also requires personalized service to each customer. Recent years have brought new riddles to solve, like commoditization and the digital revolution. For those who can manage these demands, it’s an industry that can be very rewarding.

For the past decade consumers started to believe policies differ only by price. This insurance commoditization has been plaguing the industry. Insurers are forced to compete for business by cutting prices to the bone and by spending heavily on marketing. These strategies drive up the cost of acquiring new customers while also cutting into profits. These expenses are not wasted if insurers can rely on high customer lifetime value to recoup this investment. But commoditized markets don’t offer this kind of long term loyalty.

The path out of this commodity trap is to prove to consumers that the policy is not the product and your product is different from others. How? By finding ways to deliver higher customer value and the best customer experience. The good news is, for insurers, improving customer service is the surest way to also deliver higher customer value.  

There is just one simple goal, commit to a great customer experience, one that differentiates the insurer from other brands. What does this mean? For the start of the relationship, it’s an easy sales process, competitive prices and helpful agents. Friendly, knowledgeable customer service and friction free payments is paramount when it comes to billing. Helpful, timely information on how to reduce risk and make life better helps build the relationship throughout the policy term. Most important of all is have a claims process that runs like a well-oiled machine, not confusing or a chore, that’s simple, with just-right communication that is proactive and straightforward.

Loss events, and how insurers react, triggers the most customer churn. Just making a claim raises the chance of a policyholder switching brands from a baseline of 22% to 41%. Consider that the cost of retaining a customer is one-fifth that of gaining a new one and boosting customer retention 5% raises profits by 25-95%. And there are a wealth of options for improving claims handling. Claims involve multiple steps, plus customers already expect claims to be a chore. It is usually a high stress and lengthy ordeal for all involved.

How do policyholders judge how an insurer performs during a claim? Responsiveness, error free, the right information at the right time, and managing and meeting expectations all rank high on the list of priorities for customers. All of this should be engineered with an eye toward reducing customer time and effort in the process. Engineering is the operative term– the only affordable strategy to improve claims customer experience is to implement smart automation, including those tools that implement artificial intelligence (AI) and machine learning (ML).

A few examples will help show how ideal these products can be in making the claims experience for customers:

  • Friendly claims chatbots guide policyholders through their FNOL.
  • Artificial intelligence reviews images and taps into available databases to instantly assess and report on damage when possible.
  • Machine learning adapts to understand when and how claimants wish to receive updates.
  • Integrated smart automation gathers information from in-house and external sources to minimize time and customer burden to complete the claim file.
  • Artificial intelligence enables accurate estimates about timelines for claim approval and settlement based on prior, similar circumstances and current context.
  • Intelligent automation reduces errors, and tracks and completes tasks.
  • Automated and guided processes, with built in checks reduce burden on adjusters, reduces time to train new staff, and helps reduce claims team turnover.

At each customer touch point in dealing with claim, there is an opportunity to incorporate new AI, ML and automated aids. These helps add up to transform how policyholders experience their claims and, ultimately, whether they feel the insurer is watching out for their best interest.

To see how Elafris Virtual Insurance Agents can help you connect with your customers, click here to schedule a free online demo.

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