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Can the claims process be more customer friendly?

At a glance

  • In October 2017, Charlie Bush, Head of Property and Energy Claims, Zurich UK, was asked to present at the European Intelligent InsurTECH Conference
  • Here are some of the key messages that he delivered on the topic of ‘Moving to a Customer-Centric Insurance Claims Process’
  • This article was featured in our newly launched Zurich Quarterly Claims Journal

I want to start with a thought provoking comment; in my opinion there is an issue of trust in our industry, and specifically a lack of trust between the customer and their insurer.

We need to change the customer’s perception of insurance, which is that insurers are there to drive down the value of claims, and that is only after the inevitable battle of coverage.

Let’s start with Trust

Insurance is purchased by customers who want reliability from their insurers to agree to pay valid claims, as well as the management of claims through behavioural excellence. This is not only achieved by buying trust in a brand, or a company’s financial stability, but also in its people and their behaviours.

Based on a number of newspaper headlines and industry reports it would appear that some carriers are falling short of this mantra – the very mantra that insurance was founded upon of utmost good faith. The industry report I would like to dwell on is the Global report by Ernst and Young, “Reimagining customer relationships. Key findings from the EY Global Consumer Insurance Survey 2014

It is pretty damming that their research shows the percentage of consumers who cite ‘complete trust’ and ‘moderate trust’ in the insurance sector is in the bottom two of the six industries surveyed in all but two of the eight territories, which includes being rated lower than the banking sector. If you consider this report was commissioned in 2014 whilst there was a banking crisis it makes for even more depressing reading.

The report goes on to state that, ‘consumers are telling us that stronger, two-way relationships may be the key to future market leadership in insurance. Certainly they would not mind hearing from their insurance providers more often.’

I agree with the statement from EY, and believe that customers having purchased an insurance product expect an open, reliable, honest, and transparent service which is founded upon strong relationships.

I’m painting a slightly bleak picture, but let’s not beat ourselves, as we know that this is not always the case and there will be countless fantastic examples you will have been involved with where the opposite of the picture I am painting is true. My personal view is that in the right hands our insurance industry can absolutely deliver for our customers, however, for me it is about doing it consistently, which leads nicely in to my second point.

How have Zurich sought to deliver a customer centric claims process and, in turn, build trust with our customers?

From the outset we looked to create our Claims Commitment with the customer in mind, and following a formal working session with a number of our closest customers, combined with large amounts of ad hoc feedback on what an excellent claims experience looked like our Claims Commitment was created.

Whilst it sets out a number of operational indicators such as mile stones and response times, what I believe to be even more valuable is our behavioural approach towards working with our customers.
At the core of our commitment are four pillars which set out the principles of how Zurich will engage with a customer.

These are that the claims experience will be:

  • Clear: we want our engagement and our communication with the customer to be clear, and to avoid ambiguity
  • Personal: there is not a one size fits all approach. Simply put; insurance as a product is personal to the buyer, and therefore requires a tailored service
  • Effortless: we want the claims experience to be effortless on the part of the customer
  • Collaborative: we want to engage with the customer at the earliest possible opportunity. For instance on large claims we will arrange a conference call with the customer, the broker, and the appointed experts. This will be led by Zurich.

On the topic of collaboration it is worth pointing out that many of the commercial claims we manage involve other subscription market insurers, and also an intermediary, such as the broker, so working together is particularly important.

In order to deliver a claims journey in line with the commitment it requires robust leadership where the claims handler is able to form a strong and agile team, giving clear instruction which in turn leads to a prompt assessment on coverage. Key to achieving this is the effective and transparent approach to communication with the broker and customer.

Aside from the four principles of our commitment, the area that I would like to touch on briefly as to one way I believe we can restore trust in our industry is through Large Loss Scenario Workshops and pre loss customer engagement.

It is my belief that the various parties to an insurance contract need to engage with our customers directly pre loss. By working through hypothetical loss scenarios it enables all stakeholders to develop a mutual understanding of how the policy would respond in the event of a claim. Furthermore, such engagement enables the parties to understand one another’s businesses, for Zurich to learn the customer’s emergency response measures and their business continuity plans, and also an opportunity for us to set out the various roles and responsibilities of individuals in the claims process including our approach to claims management.

We have received numerous pieces of feedback from our customers to say that this approach has without question enabled Zurich to win and retain business.

Change in the London insurance market

There has been a recognition that in order for London to remain competitive and be the go to market place for complex insurance risks we need to modernise and enhance our claims operation. The London insurance market is seeking to modernise and streamline existing claims practices for non-complex claims through the introduction of a collaborative cross-market programme known as the Single Claims Agreement Party initiative or SCAP.

I am fortunate enough to be the Chairperson of the Inter Carrier Agreement work stream, one of three overall work streams, and whilst the workings of SCAP are complex the underlying objective is simple.
Current claims practice is that company market insurers such as Zurich agree all claims for their own interest irrespective of quantum and whether or not we are the lead insurer. Lloyd’s is different in that they have the Lloyd’s claims scheme and whilst this is better it is still by no means seamless.

The introduction of SCAP will mean that for London Market non-complex low value claims under £250,000 for the slip interest, the Inter Carrier Agreement will introduce a delegation of claims handling authority to the slip leader. In practice, this means that where, for instance, Zurich are the leading insurer on an in scope claim the decisions made by them will be binding on all the following insurers irrespective of whether they are a company insurer or Lloyd’s syndicate. Likewise, where Zurich are a following insurer the decision of the slip leader will be binding on Zurich, irrespective of whether the leader is a company insurer or a Lloyd’s syndicate.

This customer centric initiative was established to enhance the London claims service with the aim of streamlining and simplifying the claims agreement model for the benefit of our customers. It is intended to promote a quick and efficient claims process thereby improving and reinforcing the attractiveness of the London market.

So to summarise, I have set out what I believe the challenge is between the customer and the insurer, and how Zurich have sought to address this, as well as the wider London Market improvement initiative.

There is plenty more that could be discussed; around how we can provide an improved customer centric claims journey including new enabling technologies such as applications, drones and the use of social media.

Also the implications of what I believe will be an inevitable widespread change in approach to underwriting, including parametric insurance and Blockchain driven solutions. What this means not only for our claims market, but also our insurance industry as a whole is unclear, although the words of Peter Drucker strike a chord with me; ‘the only thing we know about the future is that it will be different’.

This article was published as part of our first Commercial Claims Quarterly Journal. Click here to download the full journal. 


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