For many adults in the United Kingdom, insurance is a “grudge purchase” – bought to insure against the possibility of something unfortunate happening – and the value test is the customer experience at claim time, according to “The Reality and Opportunities in Claims Management: Consumer Experiences in the United Kingdom,” a new report from Celent.

The report is based on primary research on UK customers’ claims experiences and offers an examination of customer expectations, considers what is important from the customer perspective during the claim process, and offers views on fraud, preferred interaction methods and customer loyalty. It also offers Celent's opinions on investment priorities to improve the claims experience.

“Customers are clear that they want to be paid what they claimed for,” said Catherine Stagg-Macey, SVP with Celent’s Insurance group and author of the report. “But what’s intriguing is that many view inflating claims as acceptable behavior. This creates a dilemma for the insurer—how to trade the speed and value of settlement against customer expectations and satisfaction.”

Key findings of the report include:

• Almost 90 percent of adults in the United Kingdom have one type of insurance policy.

• Customers may have had insurance for several years and not made a claim. The point where policyholders get to experience the value of an insurance policy is at that point of making a claim. This is the moment of truth.

• Feedback in claims experiences highlights that the industry has some way to improve the customer experience of settlement times, post-claim service and internal information sharing.

• Research in this report shows that there is a tenuous link between the customer claims experience and their resulting loyalty. Having a good experience seems to have little impact because UK consumers are still very aware of cost-saving opportunities at renewals. However, having a poor experience is very likely to impact loyalty in a negative manner.

• Investing in sound customer experience should be considered a hygiene factor. Under investing will result in customers walking away at renewal time. Investing heavily in this area is unlikely to pay off in increased customer loyalty. At some level of investment, the insurer will accept that the customer experience is as good as it can get.

• Further investment should focus on shifting the customer satisfaction curve by using big data and analytics. The final frontier is tackling the consolidation and modernization of the claims application landscape to support better operational and financial management of the claims organization. 

According to the report, there is an uneasy balance between the customer experience at claim time and the efficiency and effectiveness of the claims process. Celent said that while there are inexpensive ways to improve the claims experience, but that alone is unlikely to positively influence customer loyalty.

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