The 2023 Service Quality Marque achievers all get four fundamental things right, which can be summed up as follows:
#1 They all deliver consistently through great teamwork: inconsistency undermines trust and service suffers disproportionately if it’s not consistent, so they know that working as a team is what makes the difference to making sure everything is covered
#2 Teams also use the research and other feedback to identify weak spots and work on them so the whole becomes greater than the sum of the parts, they’re not scared either (or too proud) to ask the brokers what they can do better and this opens up communications channels
#3 They all score well on responsiveness: Speed is the strongest driver of service and teams that don’t deliver on this aspect just don’t achieve the SQM because all their scores get dragged down.
#4 They all focus on quality people service and consistent behaviours: SQM teams get larger cohorts of individuals mentioned for good service and this is because they set the behaviours and expectations out clearly for their teams and they deliver against these – after a while it becomes a habit, ‘the way we do things round here’.
Is claims service quality becoming the key to competitive advantage?
Despite all the talk about it being insurers’ “shop window”, the reality is that claims still takes a back seat to underwriting. Look at any number of insurer websites and how they describe their claims 'promises': 'We only pay fair claims...’We strive to pay all fair claims’.... We pay 99% of all fair claims'. These hedged phrases ring hollow as authentic promises; still the underlying message is 'we'll decide whether to pay and you'll have to like it or lump it'.
Perhaps I exaggerate to make the point, and there are some great claims teams out there, but there’s no doubt the good guys get dragged down by the generality.
But change is afoot. The whole insurance industry is shifting to focus on the customer and delivering what they want. Why? Competition - brokers are in a huge competitive battle and now realise that a focus on the customer is the only way to win. That, coupled with regulatory pressure and frustrations with insurer service post-pandemic creates the perfect storm for a shift to much better service and at the epicentre is claims service.
And while claims might be the Cinderella operation it is reputationally sensitive - being tarred with the brush of avoiding paying claims is highly commercially damaging (remember BI anyone?) - and the taint is hard to shake off. More to the point, less business will go to those who don’t deliver good claims service.
All the most recent evidence points to claims service becoming more prominent, including the fact that claims, which hardly used to feature, is now brokers' #2 challenge after Pricing. Plus, brokers are increasingly commenting in our surveys that they want proof of good claims service to help them in winning and retaining business.
More strategically our analysis also shows that insurers won't grow unless they offer good claims service – yes, there's an identifiable cost, but it's actually an essential investment for the future. With the growing investment in insurer brands this focus on claims will only intensify - it's the core brand promise after all.
One big broker has recently asked all its major insurer partners to share their claims promises with a view to evaluating whether they're really showing the proper claims intent and whether they deliver against it - this is unusual but it’s another example of how the issue is being prioritised.
Last, technology is offering insurers a way of making the handling of claims more efficient and with this comes the possibility that teams can focus freed up resource on delivering (much) better customer experiences which they can showcase (as per our Quality Marque) to gain competitive edge.
This is powerful stuff and I have no doubt that the insurers who are first out of the gate with 'guaranteed' better claims service will win out over those who only sell on price.
Finally, if you're not convinced change is in the air, look to Amazon's recent entry into the insurance market - limited yes, but what have they positioned on? 'Quality insurance products, 'guaranteed' by Amazon.
Be very scared traditional insurers, very scared.
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