IAn insurance claim comes at a difficult time in a customer’s lifemaking it an often negative experience. At least, that’s what you might assume. That’s why I was surprised by my latest research report, Why artificial intelligence in insurance claims and underwritingAnd the
Speed of settlement drives claims satisfaction in insurance
Overall, our survey found that 70% of policyholders said they were either satisfied or very satisfied with the way the insurance company or insurance agent handled their claim.
As for the claims, that’s too high. And our survey isn’t the only data point that shows this. a 2021 JD Power survey focused on auto insurance It showed a record level of customer satisfaction with claims, reaching 880 on a 1,000-point scale. similar 2021 JD Power survey on property claims It showed a slight decrease in satisfaction rates (from 883 to 871), but this broke a 5-year streak of steadily increasing satisfaction scores likely due to conditions not directly related to insurance companies (eg supply chain disruptions and material shortages related to the pandemic). So, what is causing these increased satisfaction rates?
Multichannel communication and transparency are two reasons. Most insurance companies allow customers to open a claim on a website or app. The technology provides convenience in terms of using images for examination rather than scheduling a person to come to the site. Some insurance companies provide a dashboard to track the claim throughout its lifecycle.
These are all important updates that have helped make the claims experience much smoother. However, there is one piece that, according to our survey, increases satisfaction rates more than anything else: settlement speed. The longer it takes to settle a claim, the less satisfied the policyholder will be.
This insight is particularly important for insurers, as dissatisfaction with claims is a major factor driving policyholders to switch to another company, with 74% of dissatisfied customers saying they have changed providers (26%) or are considering it (48%). ).
Insurers should focus on AI to build on high claims satisfaction rates
With settlement speed being the primary driver, how do insurers continue to have high levels of satisfaction and, most importantly, build on it?
For many years, insurance companies focused on the omnichannel. We are now at a point where continued investment in omnichannel leads to diminishing returns. Of course, this does not mean that the universal channel should be ignored. New ways targeting younger generations, such as chat apps (WhatsApp, etc.), will remain an important strategy for insurance companies to expand their customer base. Mastering or modernizing any comprehensive offering channel for insurers will currently be critical to staying relevant. What I’m saying is that the universal channel is fruit hanging – and we’ve picked most of them already.
Instead, insurance companies should focus on artificial intelligence to automate the settlement process to be fast, easy and accurate. Of course, this is easier said than done. Automating the settlement process requires powerful data and analytics capabilities all connected in one ecosystem.
Disconnect between intent and action
Executives already know the importance of using AI in claims. The graph below shows that for each area of the claims value chain, at least 75% of CEOs said AI and machine learning can bring “great” or “great” value.
However, there is a disconnect between this intent and action. The same graph shows this gap, with only 44% of CEOs still saying they are ahead in the use of AI, automation and machine learning even in the most advanced fields (claims adjustment). In this scenario, our definition of the word ‘advanced’ after the level is ‘initial use’.
Insurance executives must look at priorities holistically
Therefore, about 80% of CEOs realize the value of AI in claims, and about 40% consider themselves to be ahead in various fields. Not surprisingly, claims investments will accelerate over the next three years, with 65% of those surveyed planning to invest more than $10 million.
However, insurers should not be discouraged, because the speed of settlement priorities aligns with other operational priorities, such as reducing administrative costs and bridging claims leakage – and the solutions are the same. That’s why CEOs should avoid trying to solve each problem individually, and instead ask how artificial intelligence, machine learning, and other automation can transform business in a way that simultaneously meets multiple priorities. For example, increasing settlement speed through automation will naturally reduce administrative costs and avoid claims leakage, while increasing customer satisfaction and retention.
Insurance leaders also need to have the courage to face these larger challenges and avoid putting too much time and energy into simpler priorities (such as the one-stop channel).
Insurance companies know what kind of value AI can provide, but they are lagging behind in implementation. Fortunately, a recent rush to the cloud will help. The cloud is an important foundation for leveraging the real-time data and modeling that will fuel this type of automation.
Overall, there is still a lot of work to be done to get technology platforms to the point where they can automate the speed of settlement and make better use of AI across the business. But it is clear that AI and automation are where the investment for insurance companies should go to reap the most benefits: satisfied customers, empowered employees, and more resilient businesses. Read Full report on the AI-led transformation in insurance To learn more.
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Disclaimer: This content is provided for general information purposes and is not intended to be used in place of consulting with our professional advisors.