Customer Service, Shoppers, and Retention: New Claims Tools Can Help

By Carlos Martins February 25, 2014

Carlos MartinWell, there’s good news and bad news. The percentage of auto insurance “shoppers” — those looking for a new policy — is at a six-year low, according to research from J.D. Power.  Insurance company efforts at customer retention are clearly succeeding. However, the percentage of shoppers switching carriers is at a six-year high. When policyholders do decide to leave, the competitive landscape has made it quite easy for them to find an alternative. And in today’s market, with high costs for new customer acquisition, an insurer may need up to five new customers to compensate for the one who got away.

So what’s an insurer to do? The real battleground isn’t on television and billboards, where carriers seek to attract new business. Nor is it on the streets, where agents pound the pavement and work their circles of influence. Rather, it’s at first notice of loss (FNOL). As soon as a customer files a claim, the insurance company needs to demonstrate superior service to keep that customer from fleeing to another carrier.

Of course, that concept isn’t new to the claims department. From adjusters to executives, claims organizations have known for years that the work they do is crucial to customer retention. Today, however, the competitive landscape has raised the bar for service, and company executives are putting more pressure on claims adjusters to handle claims quickly and equitably. After all, long cycle times lead to higher costs. And the financial market volatility and low interest rates that followed the 2008 financial crisis have kicked away the investment gain crutch on which many insurers have long relied.

The first step in reducing claims handling costs — and thus increasing profitability — comes at FNOL, with claims triaging. Quickly routing a claim to the right channel for handling can significantly reduce cycle time and increase an adjuster’s capacity to handle cases. Currently, the ISO ClaimSearch® team is working on a new suite of tools to help make the triaging process faster, easier, and more effective for both adjusters and claimants.

Launched in 2013 with an alert for foreclosures, the ISO ClaimAlert suite can help streamline claims triaging at FNOL. The alerts in the suite will automatically fire when a claim record shows an indicator of suspicious activity. ISO ClaimAlert: Foreclosure, for example, matches a homeowners claim against foreclosure records to determine whether the property is in one of the five states of foreclosure. If a match returns, the FNOL adjuster can investigate further, deciding quickly whether to route the claim to a field adjuster or even refer it to the special investigations unit (SIU).

Throughout 2014, ISO ClaimSearch plans to release a number of additional ISO ClaimAlert products that will help FNOL adjusters identify:

  • claims where the claimants have had prior SIU involvement
  • weather events associated with property damage
  • professional sanctions
  • vehicles already salvaged

Contact your ISO ClaimSearch account executive for more information about the ISO ClaimAlert product roadmap.

While fraud detection can help insurers protect their capital and policyholders, it has little direct effect on customer retention. With ISO ClaimAlert, though, claims departments can aggregate FNOL alerts to develop a profile of a meritorious claimant and use that to determine which claims they can fast-track.

For example, a claim has less likelihood of questionable activity when it has no prior SIU involvement, a weather event at the time and place of loss, and no history of foreclosure or financial stress. Adjusters can use that profile — developed almost immediately at FNOL — to decide that the claim is meritorious and that they should handle it quickly. That approach could make it easier to identify and fast-track meritorious claims, greatly reducing cycle time and attendant cost. As a result, profitable growth becomes much easier to attain.

The greater benefits, though, go to the claimant. Rather than have to wait for a site visit or a desk investigation, the claimant could get paid much faster. He or she will gain confidence in the insurance company, mitigating the risk that the policyholder will become a shopper — and likely a former customer.

The ISO ClaimAlert suite is now under development, and we’re eager to hear from you. Please contact your account executive — or ISO ClaimSearch customer support at info.ClaimSearch@iso.com — to let us know which alerts you would find most useful and how you plan to use them. We’re looking forward to your feedback so we can deliver a tool for you to use in retaining your customers.


Carlos Martins

Carlos Martins, SCLA is Vice President and General Manager of ISO ClaimSearch Solutions. Carlos leads the operations of ISO ClaimSearch®, the property/casualty industry’s premier and only “all claims” database with over 900 million claim records and market participation of more than 90 percent of the property/casualty insurance industry. Carlos is also responsible for the surrounding ecosystem of integrated solutions for ISO ClaimSearch which includes claim scoring, predictive analytics, third-party data, and visualization tools. Carlos brings to this role – and all ISO ClaimSearch participants – more than 30 years of experience in the property/casualty industry, where he has held a wide range of claims and technology roles. He is based in Jersey City, New Jersey and can be reached via email cmartins@iso.com or 201.469.3103.