June 23, 2014 | Written by: Pete Arterburn
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I have spent a large part of my working career in the insurance industry as a captive agent for a large multi-national insurance carrier. The experience that I have had within the industry has eased my transition as a consultant to help bring clients’ perspective and understanding from a sales, process, and operations flow. I have also had the privilege to see a complete picture on what goes on “behind the scenes”, operationally, in business processes, and in software/hardware capabilities.
From a consumer experience point of view and having helped clients in the past through a multitude of claims, I can confidently state that this can be a very painful process and can be a make or break time for an insurance company to continue a relationship with its clients.
The arrival of spring in North Texas means that it’s the start of hail season. For me as an agent that would mean I would be selling the promise that if there is bad weather and it damages your home or your personal property, we won’t give you the run around; we will make you whole again subject to your deductible.
Seems so simple, but yet the process from when the first piece of hail touches your roof or to when the last nail is put into the last shingle can be excruciating. Having to call your agent or company to report a claim, waiting another day or so to hear from someone to give you a claim number, having to deal with the insurance adjuster and dealing (hassling) with multiple contracting companies is all part of the arduous journey to make you whole again. And, of course, when the insurance company says that they will pay only half of your roof, or stain half of your fence, or paint half of your car… the pain grows.
A little while ago we weren’t lucky here in North Texas and got nailed with hail the size of golf balls. I was amazed at the outpouring of support by the local roofing companies and contractors. In less than 24 hours they first professed their condolences and then politely (and sometimes not so politely) offered their services while giving me a guarantee they can get it covered and fixed if I would just sign “here”.
As a consumer you can feel overwhelmed – what should you do, what is right? One contracting company is saying they will “cover” my deductible, the other is saying that it’s illegal, another said it’s illegal, but there is a gray area. This has all happened on my front step (and I am experienced). Then comes the question on whether my insurer will only pay for half of my roof or fence – should I not submit a claim this time (risk higher rates) and wait to put in a claim for the next storm? I don’t really want to pay two deductibles for one roof.
Add up the lack of transparency for an insured, the typical lack of experience and the uncertainty of who can offer earnest advise , and it is pretty clear why many insured customers loses confidence / trust in the process and, ultimately, in their carrier.
Along with the potential for having your rates hiked because of losses, a fear can be that you will be dropped.
Then there are the more technical issues that confront the inexperienced insured; is it coded as a CAT (catastrophe) claim? If so how does that affect my overall rates? Along with an insured’s confusion, agents are frequently unsure on how to advise.
(As an informational point if you are in the U.S.: With most insurance companies, should a storm be classified as a Catastrophe Loss (CAT), the particular claim for that storm does not count towards their frequency of claims and may not be tied directly to their rates. Then again, if it is a CAT claim it probably affects my insurance rates indirectly.)
My experience is that (except for the criminally motivated) an insured customer would rather not have a claim. Given the factors outlined above, confusion, hassle, misinformation and ultimately more expense, it is clear why. From an insured experience perspective, anytime a major storm hits, the carrier has the spotlight and it is up to them to drive the experience. If they don’t provide easy access to understanding the process (manage expectations), provide clear and helpful communication, empathetic client service, nor provide alternatives to help and remediation it seems clear that they have failed at the moment of truth and will lose clients over time.
Carriers are well aware that they are at a critical crossroad. With the social juggernaut that has landed at the insured’s’ feet, understanding who is most helpful and empathetic during a claim becomes instantly reputational.
The entire claims and service process is being redefined. As a former producer and selling the “promise” every day, I professed and sold that the company I was representing was going to deliver. There were times they absolutely did, but there were too many times they did not, and clients were lost due to those instances.
How many companies truly are “ready” for a large catastrophic storm to go through? Do they have the infrastructure to handle it properly? Their distribution channel is selling the “promise”, but how are companies ensuring delivery, or more importantly, “the experience” of the promise that was sold? In the long run, we will find out who has grasped this point and who has not. The former will still be around to continue to serve their customers.