Claims: A Make-or-Break Moment for Insurers
If ever there is a time when an insurance company puts its promises to the test, it is when a claim is filed. For policyholders, this can be the moment of truth when they see how well their agent or company handles their claim after an incident.
Unfortunately, claims are an area in which trust can break down quickly between an insurer and a policyholder, with the main issue being how a claim is handled. In fact, the claims management process continues to be a major hurdle for insurers who want to give their policyholders the highest level of customer support.
So what are the main issues? According to Risk & Insurance, policyholders want insurers to provide both increased transparency throughout the claims process and faster claim payments. Unfortunately, both issues pose a considerable challenge given that adjusters are often disconnected from the original policy and overburdened with administrative tasks. Here, we’ll look at what’s happening in both areas and ways to improve the claims experience for policyholders.
Faster claim payments
According to Accenture, 95 percent of consumers surveyed said that the speed of a settlement is extremely important. Today, most states have regulations that establish a time frame in which an insurance company must acknowledge, investigate, and pay a claim. States that don’t have an official time frame generally set a reasonable time limit, such as requiring that a payment be issued 30 days after a settlement has been reached. Whatever the time frame, any delay in getting a claim check issued can result in negative feelings that could become the standard by which an insured judges the insurer’s customer service.
Once a claim has been deemed eligible for a payment, it’s important to issue a check to the insured as quickly as possible. Today, companies can expedite claim payments with a digital payment process. Not only do policyholders receive digital payments much sooner than checks, but digital processing also saves the insurance company time and money by reducing manual processing. Plus, digital payments are less vulnerable to human error compared with those completed manually.
Imagine being a policyholder and not knowing why your claim has been delayed. Even worse, what if key information needed to adjudicate the claim was received by underwriting but not communicated to the assigned adjuster? Transparency is a vital part of the claims process. Currently, far too many silos exist separating claims professionals and underwriting teams. This has made it difficult to communicate crucial claims information internally, which can delay processing. Unless improvements are made that can break down the barriers and facilitate internal communication, issues and delays throughout the claims cycle will continue.
Transparency helps decision-makers collaborate on a claim and keep policyholders informed. Fortunately, new technology platforms that are focused on the claims management process incorporate ways to improve transparency. These include facilitating communications and interactions among adjusters, underwriters, agents, and policyholders, which in turn improves the overall claims experience.
A claim can be delayed for many reasons. Perhaps the insured has not yet provided the information necessary to fully underwrite the claim. And on the insurer’s side, perhaps adjusters do not have the capacity to properly inspect a claim situation.
The fact remains that when a claim is filed, an insurance company has a duty to avoid settlement delays. As a legal contract between an insurance company and the insured, an insurance policy imposes strict obligations on insurers to follow through with their commitments as stated in the contract. Furthermore, in addition to their responsibility to their clients, insurers also have the legal duty to comply with state and federal laws.
When it comes to processing claims, all insurers have a responsibility to:
- Act in good faith.
- Conduct a proper investigation.
- Be responsive and communicative.
- Make full and prompt claim payments when the liability of a client is not in question.
- Settle or deny a claim within a reasonable time frame.
- Provide a written explanation when a claim has been denied.
While it’s not possible to control every aspect of the claims experience, focusing on challenges surrounding faster claim payments and transparency can help. This includes investing in key technologies capable of improving the claims management process. Remember, claims time is often the moment of truth that can make or break customer loyalty, so it is definitely worth the effort to get it right.
Ready to join the digital revolution and to reap the benefits provided by digitizing your company’s claim payments? With One Inc’s digital claim payments solution, ClaimsPay™, we make it easy by seamlessly integrating into your current system and existing inbound premium payment platform. Contact us today!
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As the lead writer at One Inc, Patricia is passionate about helping insurance companies successfully overcome modern industry challenges. She offers news, stories, and tips to help insurance professionals improve sales and retention, enjoy greater operations efficiency, and provide the best value possible to your policyholders.