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How to Build a Modern Claims Experience

Claims have become the next battleground for winning and retaining customers, and insurers are exploring new ways to apply people, process and technology to create a superior customer experience.

Owen Williams, SVP and claims CIO for Chubb, describes the Warren, N.J.-based P&C insurer's claims service as best-in-class and asserts that customers who go through Chubb's claim experience are prone to become customers for life. "Claims handling is a key differentiator for us in the marketplace, and so we continue to invest in the kind of people, process and technology that yields customer service that exceeds our competitors' performance," he says.

Maintaining that performance edge today requires adapting Chubb's ($11.8 billion in 2011 net written premium) customer- and agent-facing claims capabilities to consumer adoption of mobile computing, which, Williams says, is driving the need to deliver real-time information within a personalized service offering. This means projecting the claim experience onto multiple platforms and devices in any context.

"Today's insureds want the flexibility to choose the level and type of interaction that makes the most sense for them," Williams explains. "For example, someone might choose to initiate a claim through their agent but receive status updates on the claim via a mobile device."

  1. Simplify claim reporting.
  2. Clearly set expectations.
  3. Improve information sharing.
  4. Keep all parties informed.
  5. Provide options.
  6. Issue payment promptly.

While rapid technology change is inevitable, insurers shouldn't assume too much about how it will manifest itself in future customer interactions, Williams suggests. "I don't think anybody really knows how technology is going to change the way people interact," he cautions. "However, it will be different than it is today, and it is very likely that insureds will dictate the way they interact with Chubb, rather than the other way around."

Chubb, which underwrites a variety of personal and commercial lines products, is known for its high-end homeowners and other prestige personal property coverage. The carrier's adaptation is part of a larger trend of insurance companies shifting their competitive focus to the claims battlefield, indicates Richard Pankhurst, an Austin, Texas-based director with PricewaterhouseCoopers (New York). Various price-focused marketing strategies have been "done to death," Pankhurst says, and a focus on the claim promise has taken hold in the past six to 12 months.

Claims: Delivering on the Promise

"Many insurers understand that they can't compete on price, but that they don't need to. They realize that they can win new customers and retain existing ones if they can deliver on the promise," Pankhurst reports. "This is an area that is cracking wide open. It's pivotal to the industry and will be the driving force of claims operations and technology investment over the next five years."

Insurers in the vanguard of claims improvement are taking responsibility for proactively and quickly guiding the claims process and pushing out relevant information to claimants rather than forcing claimants to pull it from the insurer, according to Donald Light, a Palo Alto-based senior analyst with Celent. "It's a matter of making processes happen more smoothly and of giving claimants the ability to have a sense of where they are in the entire process," he says.

Insurers need to deliver key claims information to policyholders through their channels of choice, Light affirms. But enabling those front-end connections depends on more flexible back-office technology. "The essential technologies to make sure that adjusters are doing the right thing at the right time are workflow and business process management," he says. "Modern core claims systems have these capabilities built in."

PwC's Pankhurst adds to the list consistent data capture, scripting, integration of external data sources and integration to other core systems as elements making modern claims system the "No. 1 ingredient" in delivering a customer experience comparable to the one provided by other industries. "The key to a satisfactory experience is setting expectations," Pankhurst asserts. "Modern core systems facilitate the assembly of a work plan composed of the right activities and guide adjusters and other participants through them."

Insurers also must shift from a process mentality focused on executing steps, to a people-focused paradigm emphasizing communication and aimed at keeping customers happy, Pankhurst advises. "The emphasis must shift from mastering procedure to empowering people to do a good job by training staff and giving them the best tools," he says. "We'll see a significant up-skilling in adjusters themselves with regard to customer management skills."

Carriers need to focus on keeping adjusters happy, too. Much thinking has gone into making these professionals more effective through structuring their roles, Pankhurst says. But more attention has to be paid to the quality of their work environment, and recruiting and retaining talented new professionals to the job will require equipping them with leading-edge tools, he insists.

As part of a people-and-communications approach to claims, Pankhurst recommends what he calls integrated communications management, which unites the back-end system capabilities with all of the preferred channels of interaction for agents, adjusters and customers for any given communication.

Powering the Retention Engine

Grange Insurance (approximately $1.1 billion in 2011 revenue) took aim at this type of communications strategy with its move to HP Exstream as the carrier's single system for the creation and delivery of claim correspondence. The Columbus, Ohio-based carrier, which offers auto, home, life and business insurance, implemented HP Exstream in 2011 for enterprise document creation and distribution, and went live for claims-related purposes in February 2012. The software supports Grange's "System of One" platform consolidation strategy and the carrier's goal of driving growth and retention through claims excellence, according to CIO Michael Fergang, who notes that the carrier received 160,000 claims in 2011.

Michael Fergang
Michael Fergang, Grange Insurance

Grange constantly reviews customer satisfaction using the Net Promoter Score (, Fergang says, and the company records all customer calls, embedding them in the relevant claim file. By evaluating these sources of intelligence on an ongoing basis, he adds, Grange can determine individual claimants' preferences and shape training for professionals interacting with policyholders.

"There's a direct correlation between customer satisfaction and retention," Fergang observes. "Net Promoter is our vehicle to evaluate that very quickly."

HP Exstream fits perfectly with Grange's focus on the service and satisfaction feedback mechanism, according to Andy Hellard, Grange's application development supervisor, who ran the HP Exstream implementation. "Today we have many manual processes, and we have lacked consistency in form and voice in our customer communications," Hellard acknowledges. "This was an opportunity to consolidate to a single platform and deliver a consistent customer experience across all claim correspondence."

HP Exstream enables the business to centralize control of correspondence and give the business the ability to customize communications to many customers or to a single customer — without IT intervention. According to Hellard, "The software takes the relevant output from core systems and enables you to format it to any communication channel or device. It provides us with the architecture to move to multichannel communications."

Grange initiated use of HP Exstream within claims in medical payments and subrogation, reports Beth Rickard, the carrier's senior project manager on the initiative. Potential efficiency gains flowing from increased paperlessness and retiring redundant systems have justified a large program around document creation centered on HP Exstream, she says.

The implementation has already produced speed and efficiency dividends, including reducing letter production time from about 11 minutes to 1.5 minutes, Rickard notes. "We've seen immediate results, and the efficiency gain is huge," she says. "It means getting more consistent communications out to our customers more quickly."

At least as important, adds Fergang, "We will be able to communicate within the channel that the agent or policyholder desires in the future, which is very powerful."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio

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