Independent Agencies and the Internet: The Claims Dilema
Act cFluent Newsletter, November, 2005 - Subscribe today Subscriber benefits include early evaluation of new products and discounts.
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Direct reporting to carrier and restriction of claim draft authority have led many independent agents to remove themselves from the claim process unless presented with a problem. A study published by management consulting firm Accenture shows why not keeping tabs on the claim process and not monitoring your carriers' service can be dangerous. Among adults filing a claim in the last 5 years:
- 94% said quick resolution was important
- 82% said being aware of the process beforehand was key
- 74% said the amount of the settlement was important
- 41% were unsatisfied with how they were kept apprised of claim status
The proportion of clients likely to stay with their current insurance provider and likely to refer other customers varies by satisfaction component, but is uniformly high - 65% to 90%. Abdicating the claim process means abdicating control of client retention and growth through referrals.
Very few agencies today have claim specialists and those that do are usually focused on claim service for specialty programs or large accounts. Most claims are handled in such a way that the agent is the last to know what is happening with a claim. One alternative is to require service staff to monitor the claim progress by checking with the claimant and company at regular intervals. This is not usually viable since the hours in a typical account representative or CSR's day are pretty well filled up.
The good news is that most small claims can be easily grouped by line of business and, once that is done, many characteristics are homogeneous across 80% or 90% of the claims. For instance:
- Most personal automobile and homeowner claims settle for under $10,000.
- First payment of loss happens within 7 to 10 days for most personal auto and homeowner claims.
- The steps in the claim settlement process are generally the same.
- The intervals between the steps in the claim process are typically uniform.
Understanding which claims are similar and in what ways they are similar gives an agency a chance to set up a controllable, repeatable monitoring process that is cost effective, ensures customer expectations are met and maximized retention and goodwill referrals.
Remedy: Develop a process that educates customers about the claim process and allows your agency to monitor carrier performance so you can intervene before delays or problems result in dissatisfaction. The claim monitoring process you implement should also allow you to collect the data necessary to help your carriers identify performance weaknesses and improve them and validate your agency's value proposition.
More information on the Accenture study at:
http://www.bettermanagement.com/library/library.aspx?libraryid=12437&pagenumber=1
View a recorded demo of the cFluent Claim Manger Tool for Agency Websites at:
http://www.ConfluencySolutions.com/cats/cm
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