The best insurance claims process for the digital world

In late 2021, well in the midst of a global pandemic that was changing the digital expectations for customers across industries, J.D. Power issued a report that said at least on the claims side, adoption of digital processes was lagging behind other bread-and-butter functions in finance.

“Banking and even utilities and other industries are just moving faster than insurance,” says Marty Ellingsworth, executive managing director of P&C insurance intelligence at J.D. Power. “The ideal experience hasn't happened yet for many people across many carriers.”

However, claims leaders from a range of insurance carriers say that they aren’t focusing so much on rapid uptake of their new processes as they are on creating a modern customer experience for the claims process, as digital implementations change expectations and possibilities across the board.

“I think we've seen a large transformation in customer utilization of digital claim capabilities the last few years, and a significant uptake on the part of customers,” says Pat Gee, SVP of claims at Travelers.

However, Gee adds, customers are still getting used to how the digital capabilities, which range from first notice of loss to status reports to virtual inspections and everything in between, work. The next step is to understand where new kinds of questions are being generated along the way.

“Anytime we move even simple claims into a more digitized process, it's incumbent upon all of us to create great user experiences that anticipate the questions a customer wanting to know what step is next will ask,” he says.

Claims leaders agree that the pandemic made customers more comfortable with digital processes overall. But, they add, insurance is generally more complex than grocery delivery or check deposit – to name a couple common points of comparison – which makes it difficult to match the expected experience customers get from those products.

USAA is seeing claims reported digitally at a 50% clip, but also increased calls to the call center, says Ramon Lopez , VP of claims operations. But that isn’t, in his estimation, because the process is confusing them. Rather, supply chain issues are causing repairs to take longer in general.

“There’s parts and labor shortages. So what we might be hearing as a challenges with adopting digital is in fact that people simply have further questions around why repair times are being elongated,” he explains. “That
wait time may not have been the norm for food to be delivered or for groceries to be delivered.”

Lopez says that insurers need to be identifying and studying those pain points and causes for them, and figuring out ways within the claims process to reach out proactively and address them.

“When you go through a claims digital experience, where are you being delighted and where is there empathy being shown? I think that there's room for improvement in our space,” he says.

In fact, Lopez and other leaders said that severity of a claim is a bigger predictor of how much outreach customers need in order to feel secure that their claim is being handled. Insurers can use this knowledge in building their claims process and plan for human intervention at those points.

“During the estimation process, there is a lot of data that is a particularly vulnerable point for the customer. They're not quite sure how much money they're going to get or how they're going to fix things. And so it's a perfect place to interject a human,” says Grace Hanson, chief claims officer for Hippo. “The orchestration of the entire experience and the interjection of competitively differentiating elements to that experience is ultimately what's going to make companies stand out.”

Early contact with a person who has clear responsibility and accountability for the customer’s claim is important, according to Martha Frye, SVP of personal lines claims for Nationwide. Customers calling call centers are often getting new people every time, which creates uncertainty. But if insurers get in touch proactively with a person who can then communicate through digital channels like text messaging or email that’s more efficient than phone calls, those calls will diminish and satisfaction will grow.

“Customers continue to tell the industry that they want to speak to someone up front, understand their coverage, understand what's going to happen next and get everything set, and then they're more willing to do digital interactions,” she explains. “Otherwise, you call your adjuster and maybe you get voicemail. Then it’s, ‘three people are involved in my claim, five people are involved.’ If you can push information to them at the times that they may be less assured, or if there's a delay or anything like that, then you don't involve more people in their claim and you don't have these times where they feel unsure.”

A mature digital claims process that has the right balance of human and digital contact is important during catastrophe events, says Lynn Bostedt, director of the digital claims team at AFICS, a subsidiary of American Family Insurance that provides claims service to all the companies in the organization.

“Where there's a huge influx of people that need a service, and traditional channels take longer because everyone's trying to get through at the same time, offering those options of other avenues for people able to get things started and move them along, actually improves their service,” she says. “Our vision is to facilitate customer preference and give them the tools and then they can go between them however they want.”

(Next: What’s next for digital claims? Our experts share their views of how the space is evolving.)