(Car accident in Tokyo. Photo credit: Shuets Udono.)
Insurers are mostly hitting the mark on claim service, but that’s not enough to prevent customer churn, according to findings of Accenture’s Global Insurance Customer Survey, which polled nearly 8,000 auto and home insurance customers in 14 countries. Although a large majority (86%) of customer submitting a claim in the past two years are satisfied with the way it was handled, 41 percent of those who have submitted a claim are still either likely or very likely to switch to another insurer within the year, the research found.
While relatively few (14%) customers who have submitted a claim in the past two years are dissatisfied with the way it was handled, 83 percent of them are either planning to switch carriers or have done so already, according to the Accenture research.
“While a customer who is dissatisfied with the way his or her claim was handled is almost certain to defect, a satisfied customer will not necessarily remain loyal,” comments Michael Costonis, a managing director in Accenture’s Insurance Industry practice and global head of Claims Services. “The survey results clearly show that delivering average claims satisfaction levels is not enough. The bar has been raised and in order to clear it, insurers need to provide a differentiated claims experience that not only delivers on service but maintains the appropriate financial discipline as well.”
The Accenture survey also revealed that customers who have submitted an insurance claim in the past two years are almost twice as likely to switch insurers in the next 12 months compared to those who have not submitted a claim: 41 percent compared to 22 percent.
“The very act of filing a claim makes a customer much more likely to switch insurers, regardless of how satisfied they are with the experience,” Costonis elaborates. “Insurers should look at how connected devices and other digital technologies can help customers better manage risks to reduce claims frequency.”
Customers will trade personal information for value
Accenture’s survey also found that more than three-quarters (77%) of customers would be willing to exchange personal information in return for certain benefits. While 77 percent of these respondents would share information if that would enable them to receive lower insurance premiums, more than half (59%) would do it for quicker claims settlement, and 28 percent for personalized recommendations that could help them better manage risk and avoid losses, according to an Accenture statement.
When asked what types of information they would be willing to share, more than half (56 percent) of the automobile insurance customers surveyed said they would share information about the condition of their cars, 52 percent about their driving habits and 39 percent about their location via GPS, according to Accenture. With regard to home insurance, 78 percent of customers said they would share information collected by smoke, carbon monoxide, humidity or motion detectors, and more than one-third (35 percent) said they would share security video camera footage.
“Customers are willing to share information, and insurers that are able to use this information to help customers manage risks and reduce the number of claims will not only lower claims costs but may gain an advantage in terms of customer loyalty,” comments Thomas Meyer, managing director of Accenture’s Insurance industry practice in Europe, Africa and Latin America. “To do this, however, insurers will also have to meet customer expectations in a wide range of areas, including speed of settlement, transparency and use of innovative technologies such as mobile and social media.”
So what drives retention?
Accenture’s survey findings also suggest that speed of settlement and process transparency are the most important contributors to customer loyalty, with each cited by 94 percent of survey participants as a key expectation when interacting with insurers during the claims process. Ninety percent of respondents cited the ability to contact the provider at any time in order to check real-time status of a claim as an important expectation, the survey found.
Almost two-thirds (61%) of insurance customers said they would prefer to use digital channels to check the status of their claims. Roughly half (53%) said they would not recommend their insurers to friends and family if they did not have the ability to use digital channels to interact with these insurers, and more than two-fifths (44%) said they would switch to another insurer if they could not use these channels.
Increased importance of social media
Social media is another area with growing influence on customer perceptions, Accenture reports. Approximately one in three (29%) of respondents say they post or plan to post on social media channels about their positive claims experience, and a similar number (30%) say they post or plan to post about their negative claims experience. In addition, 43 percent of respondents said they either read or plan to read reviews that other people post about their claims experience.
Among other findings of Accenture’s Global Customer Survey are the following:
- More than one in six (17%) of customers surveyed admitted to overstating the value of their loss when they last submitted an insurance claim, but this admission of overstatement drops to 8 percent among those who are “very satisfied” with the management of their claim.
- Only 11 percent of survey respondents who have heard about mobile applications are currently using a mobile application for insurance, although 53 percent of those who have heard about such applications plan to use one in the future. More than one-third (37%) who have heard about such applications said they are not interested in using them.
- Customer satisfaction with claims experience varies from country to country; it is highest in Denmark (92 percent), the Netherlands (91%) and the United States (90%) and lowest in Italy (73%) and Spain (76%).
“The survey findings underscore the ‘make-or-break’ nature of the claims experience for insurers,” Costonis asserts. “Customers dissatisfied with how a claim is handled are not only likely to switch insurers; they are also likely to share their unhappy experience via social media. Insurers need to rethink their claims operating models, organizational structures and even their corporate cultures to get in sync with today’s demanding and digitally connected customers.”