The level of an insurer’s service may have more of an effect than driving customers away. According to results of a new survey from Accenture, poor customer service from an insurance company is more likely to cause an individual to commit fraud against that company.
Results from the “Accenture Insurance Consumer Fraud Survey 2010” point to four overall key findings that contribute to the slowdown of claims performance:
1. Poor service is more likely to encourage fraud
2. Claims filing frequency and fraud increase in a difficult economy
3. Fraudsters believe they can get away with it
4. Consumers expect insurers to continue their investments to prevent fraud
Fifty-five percent of the more-than-1,000 adults who responded to the survey believe poor service from an insurer might make a person more likely to commit fraud against that company. Also, according to the individuals surveyed, insurance fraud occurs because of peoples’ need for money (cited by 60% of respondents), or because they believe they are paying too much for insurance (42%). One-third of respondents said that those committing fraud do so in order to make up for the deductible they would have to pay.
“The potential increase in the likelihood of fraudulent claims is driven by both the consumer’s desire to recover monies and as retaliation against poor service,” says Michael Costonis, executive director of Accenture’s Insurance practice in North America. “This creates a significant challenge for insurers to examine every aspect of claims service delivery, including the way they review and analyze potentially fraudulent claims and the service touch points with their policyholders. Doing this correctly will help insurers stay competitive and attract and keep customers in this tough economic environment.”
Among the survey’s other key findings:
• More than half (56%) of respondents say that they would likely report someone who has committed insurance fraud, while one respondent in five is uncertain about their position on this issue
• The proportion of individuals who have filed an insurance claim increases with age and income. For example, the survey shows that among people over 55, more than 60% have filed a claim, and people earning more than $100,000 per year were much more likely (59%) than people making less than $50,000 per year (40%) to file a claim.
• Men are more likely to have filed a claim than women: 50% of male survey respondents say they’ve filed a claim as opposed to 44% of women respondents
• While consumers who have recently filed a claim were most likely to have done so through an agent (48%) or through a call center (46%), the survey indicates that people are making greater use of the Internet to file claims. According to the survey, the number of Internet-based claims has increased from nearly zero in 2003 to 7% today. U.S. adults over the age of 34 prefer dealing with agents, while younger individuals prefer direct channels such as phone and Internet, according to the survey.
• Approximately one U.S. adult in 10 (11%) knows someone who has inflated the value of his or her insurance claim. The proportion of people who know someone who has inflated the value of a claim is highest among the youngest survey participants (19% of respondents aged 18-24) and the wealthiest (19% of individuals with incomes over $100,000).
Accenture says insurers should note that technology is not a stand-along answer to improving fraud detection and claims performance. Technology needs to be considered concurrently and in harmony with multiple business considerations. To read more recommendations, download the report here.
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