For most insurers, the claims experience is an opportunity to highlight their value to policyholders. However, technology is changing how this process is handled, as well as customer expectations for insurance in general.
The pandemic and the emergence of insurance companies, traditionally not seen as a rapid adoption of technology, have contributed to a faster technological evolution in the industry for many insurance companies. Technology is now playing a significant role in the sale of insurance (think Internet companies like Lemonade, Next, and Corvus Insurance) and mandatory policies. It’s easier for policyholders to compare stores by price and coverage, keep track of their claims throughout the process, and in some cases get paid faster.
Companies like Amazon and the ease with which consumers can order or find something on a mobile device has changed expectations for the delivery of many products. Sprout.ai’s new study surveyed more than 1,000 consumers who purchased an insurance policy in the last two years and found that 21% expect their claims to be resolved within hours. Interestingly, they also found that 100% of 18-24 year olds surveyed expect their claims to be resolved within a week. The survey found that the reality is slightly different, with 43% of survey participants reporting waiting more than two weeks for their claims to be settled across multiple insurance lines.
Insurance has long been a business that values relationships, yet the study found that nearly half of respondents who purchased insurance from traditional brands would consider buying insurance from a competing brand. A third of respondents said they already buy insurance from both traditional insurers and challenger brands.
The study showed a definite correlation between customer service and customer loyalty, with 62% of applicants reporting a “good” or “very good” experience with their insurers and choosing to remain customers of those companies. Alternatively, of those who had a “bad” or “very bad” experience, only 19% were still customers of their insurance company, and 89% said they would use another company in the future.
In a press release, Sprout.ai CEO Roy Amir said: “Insurers need to be as focused as possible on the customer experience as measured by transaction net promoter ratings (tNPS), but have traditionally been slow to recognize rapidly changing consumer expectations, especially when it comes to the claims process. . The link between customer service and loyalty is especially prevalent among younger people who are less loyal to traditional insurance companies and are switching to digital challenger brands. Traditional insurers currently have the lion’s share of the market, but they need to focus on automating the claims process or risk losing out to digital competitors.”
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