For consumers, there are two key insurance moments: when coverage is bought and then when it’s used, with hopefully a long span of time between the two. And if there is a claim, then it’s up to the insurer to react to help the claimant recover. But too often, the claims experience spurs policyholders to consider changing insurers, especially among policyholders who’ve been customers longer (and have been paying premiums longer).[i] What else happens when there’s a policyholder unhappy about a claim? Claimants readily take to social bully pulpits with their claims grievances, effectively using Twitter and Facebook to “regulate” insurers into action.
In addition, they also file complaints with state insurance regulators, an activity that about 34,000 US consumers did in 2013.What’s their biggest gripe? A look at the National Association of Insurance Commissioners (NAIC) stats reveals that 56% of consumer complaints filed in 2013 were issues related to claims handling, with the biggest chunk, 24%, because of perceived delays. And that’s not counting delays associated with getting referrals, pre-authorizations, and finding willing providers.[ii]
Over the past year, I’ve been involved in a variety of client advisories focused on the claims experience for both consumers as well as insurer work teams responsible for getting claims paid. Why is the claim experience so easy to go off track? For starters:
- Lack of visibility into the dense middle bits of the claims process. Claims necessarily involve lots of moving pieces and handoffs between them. Even after the big mobile app and site investments that carriers have made to help consumers manage their policies and theoretically, claims, many of the apps just aren’t that easy to use or lack functions that help customers better predict when their lives will return to normal.[iii]
- Length of time for some claims to be resolved. Property claims usually get resolved pretty quickly, but long tail liabilities like worker’s comp, auto personal injury protection (PIP), and long-term disability claims can take years—on average 31.2 months—to settle, with insurers on the hook to process lost wages, authorize treatment, and pay medical providers—and increasing the number of chances that something will break in the process.
- The need to craft employer-specific plan features to win employee benefits business. It’s great when the insurer’s sales team lands a new employer account, but often there’s a “tax” associated with that win: the costs associated with non-standard plan offers, like covering 13 physical therapy visits instead of a usual 12. That means Visit 13 falls into an insurer’s exception processing bucket, delaying payments and worse, access to care for the plan member and driving up servicing costs for the insurer.
I’m going to be exploring how new thinking about dynamic claims handling is changing the insurance customer experience in a webinar with Symbility on Wednesday, February 26 at 2:00 pm eastern time. Join our discussion by registering here.
[i] When asked what would make US online insurance customers consider switching insurers, 42% stated they would consider switching insurers if they didn’t feel that their claim was handled fairly. See the February 23, 2012, “Gone Shopping: US Auto And Home Insurance Buyers Will Test eBusiness Strategies In 2012” report.
[ii] The report “Reasons Why Closed Confirmed Consumer Complaints Were makes for good reading at https://eapps.naic.org/documents/cis_aggregate_complaints_by_reason_codes.pdf