This past year proved to have the highest insurance losses in history, totaling $135 billion. This staggering figure towered over the past year’s insurance claims and seems to be only the beginning for the global impact natural disasters are having.
« Quick Summary » This blog post will take a closer look at how insurers should be looking at the post disaster claims process:
- Five critical components for claim cost control.
- Build policyholder loyalty.
- Key takeaways for post disaster customer experience.
As hurricane season is approaching, it is important for insurance companies to utilize efficient and accurate processes to tackle the infamous disasters that come so often. Companies must ensure their clients do not have to wait for assistance after a disaster strikes by collecting and responding to claims with speed and precision. If not, companies risk placing their clients in a dangerous and uncomfortable position; needing assistance but forced to play a waiting game. The costs of placing clients in this position is not only high for the clients themselves, but for companies as well who experience finances that are unnecessarily expensive and frustrating.
FIVE CRITICAL COMPONENTS FOR CLAIM COST CONTROL
1. Reaching the customer
Natural disasters result in an extremely chaotic and high stress period of time. Both the customer and company want the claims process to be completed as quickly as possible. However, during catastrophic events, devices like landlines, computers, and fax machines tend to get lost as collateral damage, making it difficult for clients to submit these urgent claims.
Understanding this, cell phone providers in disaster prone areas have poured money into ensuring mobile cell service by designing cellphone towers to withstand winds of 120-150 mph. Cell phone service and usage often becomes the primary means of communication for victims of natural disasters.
Insurers need to realize that their customers may not have access to anything beyond the cell phone in their pocket. Understanding this, they must adapt to use an agile, mobile-focused solution to reduce delays in the processing of vital claims documentation.
Companies need to implement mobile processes that will allow customers to communicate with insurance adjusters with ease. By taking advantage of the versatile aspect that mobile phones provide, customers can contact their agents wherever they may be during this time of need to expedite the claims process.
2. Speed of the insurance claim
Typically, the insurance claim process can be resolved within two to six weeks, but it can sometimes take longer than that. When dealing with victims of natural disasters, this time frame is not sufficient. Clients need help, and they need it now.
Speeding up the claims processing time benefits both the customer and the insurance company. According to one insurance company, once a claim is approved, it can take at least 5 days to complete the payment, elongating the company’s financial cycles inordinately. From the insurance company’s point of view, an expedited claims process lessens overall expenses.
This is especially true for ALE, or additional living expenses, that insurance companies are required to pay after a disaster hits until clients can return to their normal way of life. If they can facilitate a payment process quickly, they can spend less on other accommodations and move forward to address the next client’s needs.
As the customer is dealing with numerous difficulties, the last thing they want is an endless back-and-forth process between them and the insurance company. They want to return to their normal way of life as soon as possible.
Disaster events, such as hurricanes, affect many people in large geographic areas. Companies must instill quick and easy processes as they have to address an extensive group in a short time frame. Being able to add efficiency and speed to claims processing benefits both the customer and the insurers’ operations.
3. Accuracy and precision
When handling customer’s personal information, it is vital to authenticate identification before moving forward. Without this step, companies cannot grant payments as identity is not verified. These forms must be compliant and complete, which some struggle to receive.
As it is a troubling time, many people fail to submit details that are necessary to progress the claims forward. For instance, some will solely write “car totaled” which may seem ample for the client, but is not nearly sufficient for the insurance company to file a claim. This is frustrating for the policyholders as it requires additional efforts in reaching the client to receive a more detailed incident description. With a platform that allows for real-time communication, easy sharing of photos, and identification, these frustrations would be minimized and in turn, more accurate.
During traumatic times, it is common that people do not have access to their original documentation and forms that companies are looking for as they may have been lost in the damage. When it comes to possessions, the insurance company may need to compile details on every item that needs to be replaced. It is important to understand that this is a normality in natural disasters and instead of letting this become an obstacle, companies must adapt their claims methods to facilitate these circumstances.
Proof of loss is another imperative step in the claims process. It is tedious to have to take pictures and fax them over to a company to validate the claims being made. This wastes precious time where people’s livelihoods are at stake. With smartphone technology at our fingertips, it is foolish to disregard the capabilities it has to ensure a precise transfer of documentation during a disastrous time.
4. Payment Efficiency
The very reason customers are calling is to organize a payment plan so they can start to restore the damage. However, customers cannot begin fixing anything until the insurance company confirms they will cover it. With this in mind, it is necessary that insurance companies implement methods with instant payment processes. This ensures that the customer can take advantage of every opportunity and optimize their time by expediting the reconstruction process with a speedy and accurate payment plan.
After Irma hit Florida in Sept. 2017, around 20,430 insurance claims were filed in the three Florida counties. This statistic is dauntingly high, leaving so many customers helpless as their insurance companies are working to meet their needs.
Incidental and loss of operations costs (like hotel, car rental and more) continue until payment is completed. It is in the insurance companies favor to instill quick payment methods to minimize their overall spendings. Instant payments are appealing to both parties and help clients get back on their feet within the quickest period of time.
During the aftermath of Hurricane Harvey and in preparation for Irma, insurance companies have increased their use of technology. Technology facilitates an insurance company’s ability to address disaster issues with the most efficiency and precision. For example, companies utilize technology in preparation of disasters by taking before and after pictures in order to accurately track damages.
While it is important to maximize the use of technology before a disaster strikes, firms should also optimize the benefits of technology during and after the crisis. Technology provides a platform of mobility, adaptability, and urgency and after a natural disaster, insurance agencies strive to embody all of these in their response efforts. CEO Tom Wilson of Allstate Insurance asserted that technology doesn’t just speed the claims resolutions process, but it is in fact cheaper too. With benefits as such, it is senseless not to take advantage of the capabilities technology provides.
HELPING CLIENTS, BUILDING LOYALTY
During a disaster, it is necessary that clients get the care and service that they need. By being adaptable and convenient, customers will appreciate the ease of their claims experience during an otherwise chaotic time.
As it is normal for hurricanes to wipe out a customer’s electricity, companies must adapt to adhere to their customer’s needs. It’s foolish to ask a customer to print off a claim form from their computer as it has most likely been destroyed or is in an unusable state.
While it’s never easy during a disaster, managing all necessary paperwork through a mobile technology like Lightico helps to make a burdensome experience more doable. Create an all-inclusive claims process for your customer that fits seamlessly into their lifestyle during a disastrous time.
Natural disasters are no joking matter. Without efficient and effective means of processing claims, getting customers back to normal can take what feels like forever. Insurance claim processors need to incorporate dynamic techniques and advance their practices to ensure a successful and seamless claims experience. Through the implementation of processes that demonstrate speed, accuracy, payment efficiency, and technology, insurance companies will be able to maximize their communal impact when a natural disaster strikes.