The defining relationship between an insurer and a customer occurs at the time of a claim. Lior Koskas explains how to maximise the opportunity
Insurers get precious few opportunities to impress their customers. They are in the challenging position of having to deal with them almost exclusively at difficult or upsetting times.
While customers pay money to their insurer every month, they may have little or no verbal contact with their insurer over the entire period of cover, unless something in their lives goes wrong and they need to make a claim.
It's vitally important, therefore, that when a customer calls to register a claim that the process should be effective, fair and rapid. Customers may well base or modify their opinions of their insurer based on this single piece of communication, so any insurer who can excel at this level is strongly placed to reap the benefits in customer retention.
Surprisingly, insurers are now presented with an excellent opportunity to do just this. While working to detect and reduce fraud in ever more efficient ways, insurers need to consider how the spin-off benefits can have a marked effect on overall customer service.
A modern approach to claims fraud has a positive side to it, where it's not just about catching or deterring individuals attempting to make a false claim, it's also about quickly and efficiently identifying the genuine claimant so they can be fast-tracked to settlement.
The cost of fraud is huge. Datamonitor estimates the insurance industry faces a fraud bill of some £20m a week on household and motor policies alone. Thus fraud reduction is a highly valuable process in its own right.
Reducing the problem helps insurers to protect their financial position and, of course, is an ethically important stance to take. The insurance industry is expected to make an ongoing, concerted effort to reduce fraud - and has to be seen to be making such an effort.
On the other hand, the insurance industry is a good example of how important customer retention can be. Where consumers are constantly bombarded with competitive marketing messages and are ever more aware of the need to look for the best deal, any that can be retained over a long period are very valuable.
The major point of interaction between insurer and customer is at the point of claim, where insurance staff need to ask a series of questions to initiate the process. Many insurers rely on conversational routines that place little or no emphasis on assessing the integrity of the claim via their 'front line' staff.
Insurers often rely on the experience of their claims technicians to identify risk and decide which claims can be processed and which need further validation work.
Many insurers remain faithful to conversational techniques that were developed a number of years ago, working through questions which do little to add value to the claims process and often frustrate the genuine customer.
Some in the industry work through a basic process running to some 50 plus questions just to initiate a claim. While this may give them confidence that they are using a tried and tested approach, it actually does very little to aid customer service and even less to help detect fraud. Customers faced with long telephone conversations when they are often in the midst of a highly stressful situation may not feel that their insurers are being as understanding as they would like.
It is tempting to assume that a greater emphasis on fraud detection may involve more detailed conversations - resulting in less satisfied customers who have to spend more time answering them and that, as a consequence, this objective will have an adverse effect on the desire to offer best customer service. These two objectives should neither be competitive or mutually exclusive.
Operators acting as the first point of contact for claimants have the potential to generate a marked impact on both fraud and service - and can deliver far more benefit to their employer than is derived from merely fielding the first notification of loss.
This initial claim conversation presents a tremendous opportunity to either fast track a genuine claim and build a great rapport with that customer, or identify specific risk issues related to the possibility of fraud and commence a highly focused follow-up.
By ignoring this type of approach and failing to give staff the skills and tools to assess risk, the output is likely to make an immediate and significant contribution to the backlogs and bottlenecks that frustrate so many valuable customers.
Correctly structuring these conversations can maximise customer confidence as their claim is seen to progress quickly and in the right direction. This 'correct structure' focuses on asking questions that guide professionally trained operators to assess and manage risk from the very beginning of the claims process.
By using linguistic analysis, reinforced with accompanying technology, operators can focus on any customer responses that indicate relevant risk to provide a rounded, advanced method of validation.
This combined approach should aim to assess all the important signposts revealed in the emotional, cognitive and linguistic factors present in a customer's claims related conversation.
The correlation between these various characteristics enables the insurer to assess levels of risk, high or low, associated with a particular claim and take the appropriate action.
Any areas which indicate risk can be investigated further, even to the extent that a specific part of the conversation may be identified as requiring further discussion, often with technicians deploying the same techniques.
A hugely beneficial by-product is that genuine customers and their claims can be identified and moved through the process much more rapidly.
The time it takes insurers to make decisions and offer settlement can be a great bone of contention for claimants, but just as advanced validation can indicate increased risk, it will equally show where there are minimal or no risk factors associated with the claim in hand. IT
' Lior Koskas is business development director at Digilog UK