Canadian Underwriter

Take the Holistic Approach

July 29, 2010   by Suzanne Sharma

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This year, as the industry crawls out of a rather bleak underwriting year in conjunction with a weakened economy, two colours are top of mind. They are the colours of potential prosperity or possible financial turmoil. They are the colours of renewed growth or continued dramatic change. Even as the industry contends with whether they are in the red or in the black, numerous trends continue to impact the P&C space. These trends are changing the way insurers and brokers, alike, interact with their customers, all in an effort to stay ahead of the competition.

Several key drivers are prompting changes within the area of claims.

One factor is that there are more versatile products on the market today. These more versatile products result in more complex claims processes, according to a recent report by PricewaterhouseCoopers LLP (PwC).

Another factor is the potential loss of industry knowledge due to large proportions of the baby boomer workforce retiring in the next 10 years. This results in an industry-wide hurdle, as claims companies struggle to hire and train staff to process more and more complex claims. This also includes a technological hurdle, as new hires and older experts learn to contend with newer technology, such as Xactimate and iClarify.Claims Calibration

The good news is that all of these obstacles can actually become competitive differentiators. According to a new PwC report, companies that pay attention to each possible hindrance will promote effective claims transformation, and this can reduce loss and expense ratios by up to 12%, while also improving customer satisfaction.

Since successful customer service is the bottom line for all client-facing insurance professionals, the notion of turning potential obstacles into strategic competitive differences is an added advantage.

New Tech Advantage
According to the PwC report, advancements in technology have allowed insurers to offer better and more immediate claims service, while reducing operational costs.

RBC Insurance, for example, has taken advantage of wireless technology and built a fully integrated dispatch system for its road adjusters. The system allows for seamless claim assignments based on client needs for both home and auto claims. Adjusters can then update the claims data instantaneously, allowing for faster claims resolution and cost containment.

“The challenge for insurers will be in making sure they are on par, if not ahead of the curve, as newer technologies become available in the claims world that make sense for the client,” says Ian McKay, senior manager of property field operations at RBC Insurance. “The insurer’s desire to be first to market has to be balanced and flexible enough to deal with all clients.”

The ‘client first’ mindset must form part of the common denominator for any claims department to be successful.

There are drawbacks, however. For example, this claims transformation means fewer on-site investigations, and this ultimately will lead to less hands-on learning for adjuster trainees.

Fred Plant, president of Moncton, NB-based Plant Hope Adjusters Ltd. explains that part of the insurer’s goal to help control operational costs is to limit the use of adjusters in more basic types of claims, relying on the contractor to investigate the site instead.

“While this might allow for short-term cost savings, in the long term if adjusters don’t have the basic experience to deal with simple claims, it will be more difficult for them to thoroughly evaluate the complicated ones and using a contractor won’t be enough,” says Plant.

Less Cost Means Better Relationships
Jeff Anderson, vice president of PwC Advisory Services, says that an improved claims transformation process that results in a reduction of operational costs is good news for brokers because it will make it easier to sell and maintain renewals.

Three-part theory

“Anytime a customer becomes unhappy with a carrier, they tend to move the broker as well,” he says. “By providing a better renewal system with controlled costs, premium increases should be somewhat mitigated.”

Don Brown, regional director of business development at FirstOnSite Restoration in Toronto adds that it always boils down to trust and the relationships you can build in the community. “The faster a broker calls us, for example, the faster we get to the sites and can investigate the loss, and the quicker it’s going to be dealt with in a timely manner.”

Industry professionals, other than front-line adjusters, are advised to educate themselves about various types of claims so they can help customers better understand their losses. FirstOnSite Restoration, for example, has a FirstInEducation seminar, which is open to brokers and claims handlers, that offers training in areas such as mould, water, smoke, or fire damage.

Put Customers First
Since brokers facilitate the relationship between their clients and the insurance industry, it’s essential that they take a proactive role in managing change in the claims environment. For example, brokers should be prepared to minimize grief for their customers.

The broker has a keen interest to ensure the product that is delivered is the best that it should be, so they should follow up.

“The ‘client first’ mindset must form part of the common denominator for any claims department to be successful,” says McKay. “The best practices must have processes in place that are not just transparent, but make it easy for the client.”

McKay adds that companies should be driven to produce timely settlements and minimize the client inconvenience, while at the same time customizing the claims experience to address individual needs. “It is not about over-emphasizing process and under-emphasizing solutions. It’s about taking responsibility and delivering on commitments,” he says.

Plant agrees with this and says the end result of any transaction should be good customer service. “The claims experience that the customer has reflects directly on the broker because they have facilitated the sale of the policy,” he says. “The broker has a keen interest to ensure the product that is delivered is the best that it should be, so they should follow up.”

In order to strengthen your bottom line and keep ahead of competition, brokers should consider taking these approaches and ensuring their customers are 100% satisfied.

© Copyright 2010 Rogers Publishing Ltd. This article first appeared in the May 2010 edition of Canadian Insurance Top Broker magazine.

This story was originally published by Canadian Insurance Top Broker.