In Focus: Is claims experience beginning to overtake price as the deciding factor for customers?

WE ASKED: ”As customer expectations around claims experience rise, has the insurance industry reached a tipping point where claims performance, rather than price, determines which firms win or lose?”

Benedict McKenna, vice president, division claims manager at FM

Client expectations around claims have changed significantly and that has inevitably shifted the competitive landscape.

Price still matters, particularly in the current economic environment, but claims performance is increasingly what defines an insurer’s reputation. When a loss occurs, clients judge us on how quickly we respond, how well we communicate and how effectively we support their operational recovery.

In that sense, claims has become the moment of truth. Customers expect clarity, momentum and technical credibility – not just a cheque at the end of a long process. They want to understand what’s happening, what’s coming next and how their business can continue operating. Insurers that can provide that level of certainty build trust and loyalty that pricing alone can’t secure.

For us at FM, that means investing in claims long before a loss ever happens. Through pre‑loss planning workshops, clients and brokers know their coverage, the claims team and what to expect if the worst occurs.

When a loss does happen, our in‑house loss adjusters are on site quickly and are empowered to make on‑the‑spot commitments – including advance payments – to keep recovery moving and minimise disruption. That combination of preparation, authority and technical expertise removes friction at the most critical moment.

Insurers consistently delivering this kind of experience will stand out, while those relying on price alone will increasingly struggle to differentiate once clients have a claims experience to compare.

Ben Bolton, managing director at Gracechurch Consulting

The market hasn’t quite reached a tipping point – yet. Price still leads. But claims has moved from being an afterthought to becoming a much more important differentiator at point of sale and at renewal.

In our research, claims now rank second only to price when brokers place business – a significant shift from just a few years ago, when it barely featured at all.

That change reflects a more customer-focused market, where service and customer experience are playing a bigger role in buying decisions.

Brokers are a major force behind it. Armed with better data on claims outcomes, they are filtering panels more carefully and directing business towards insurers that can demonstrate consistent, high-quality claims performance.

Their public comments about the value of strong claims service increasingly reflect what is happening in practice.

So, going forward, insurers that still view brokers simply as placement channels are missing the point. The real contest is not for shelf space, but for trust.

Insurers that help brokers earn the customer’s decision – through service support, practical tools, sound advice and timely claims resolution – will win a greater share of the market.

Matt Scott, co-founder at Insurance DataLab

We’re not quite at the point where claims performance outweighs price, but the industry is clearly heading in that direction.

Expectations are rising, and there’s a much sharper focus on claims than there was even a few years ago. The recent Which? super complaint is a good example of that – it’s putting claims handling firmly in the spotlight and reinforcing the idea that price alone isn’t enough if the experience falls short when it matters most.

In commercial lines, that shift is even more pronounced. Brokers are expecting more from insurers, not just in terms of coverage and pricing, but in how claims are handled and resolved. Claims performance is becoming a key part of how insurers are judged.

Our new Commercial Lines Claims Pulse survey shows just how significant that is. Brokers that have had a positive claims experience are almost 10 times more likely to place business with the same insurer compared to those who’ve had a negative experience.

That’s an important stat for insurers to understand because it highlights how quickly a single claims experience can shape future decisions and relationships.