Customer service lacking at point of claim, says report

Customer service at the point of a claim is not up to scratch and insurers risk losing customer loyalty, according to the latest research by analytics firm Celent.

The findings were released today in conjunction with the launch of a new solution by software provider Roundcube to enable insurers to handle the claims management process better.

Celent’s research found that the insurance industry needs to improve the customer experience of settlement times, post-claim service and internal information sharing. It also concluded that under-investing in technology will result in customers walking away at renewal time.

Roundcube UK country manager Peter Foy said: “In terms of sophistication, the UK insurance industry is ahead of the rest of Europe. But the underlying technology infrastructure has been underinvested in for decades and does not support the ambitions of forward thinking insurers.

“There is a genuine need and appetite for intelligent systems which enable claims managers to deliver the best customer experience possible and drive greater customer loyalty, as shown in the Celent research.”

The Roundcube solution is based on a flexible, pure service-orientated architecture (SOA) which means it can be easily integrated into any existing IT environment.

Celent’s report ‘The Reality and Opportunities in Claims Management’, which surveyed 221 UK insurance policyholders, revealed that  consumers who have experienced recent claims are more willing to pay 10% more premium for an outstanding customer experience from their insurer, versus those who have not recently experienced the ‘moment of truth’

A poor claims experience is sufficient to drive customers to switch insurers, according to the study, with those who have had a claims experience having a different perspective on reasons to switch than those who have not. Those who rank ‘poor claims experiences’ and ‘poor customer experiences’ almost double in number, it found.

The ABI estimates there is £1.9 bn in undetected fraud in general insurance in the UK per year.

The research found that attitudes towards claims fraud appear to be hardening, but three areas stood out where customers believe behaviour is acceptable or borderline: claiming for distress (51%), estimating upwards on value (48%), and adding items to the list to cover for forgotten items (37%).