How Much Does Claims Handling Matter?

By Carlos Martins  |  February 4, 2013

When a catastrophe strikes, the claims department has one primary mission: serving its customers. But that mission also fulfills another purpose. By delivering a superior claims experience, with knowledgeable claims professionals who process claims accurately and quickly, an insurer applies its most important marketing tool: customer satisfaction. That effect then multiplies when one happy customer turns into many more. Customers talk, and when a potential policyholder is in the market for a new provider, he or she will remember hearing about the claims experiences of friends.

So it pays to get this part of the business right, and there has been ample opportunity lately, especially in the Northeast, for an insurer to enhance its reputation.

Last November, in its preliminary bulletin on Sandy, Property Claim Services® (PCS®) reported approximately 230,000 auto claims, a number then revised upward in a recent resurvey. The auto claim levels were unprecedented for this type of catastrophic event.

The good news has been the property/casualty insurance industry seems to have responded appropriately, with efficient, customer-focused claims handling.

Claimant satisfaction increased six points from fourth-quarter 2011 to fourth-quarter 2012, reaching 861 on a 1,000-point scale, according to J.D. Powers and Associates, as reported in an Insurance Networking News article. The article notes that the fairness and timing of claim settlements contributed to the increase. Specifically, the average time to pay fell to 13.9 days in fourth-quarter 2012 from 16.4 days a year earlier. The average time to pay total-loss claims dropped an average of 5.1 days to 18.5 days.

Of course, none of those findings are surprising. Claims executives have long known the benefits of reducing the time to pay and ensuring a fair settlement. Yet the tangible results of the recent J.D. Power and Associates survey show how important claims department efficiency is, and that knowledge reinforces the need to continue seeking improvements.

One of the tools insurers have at their disposal is ISO ClaimSearch®, the industry’s all-claims database, with more than 840 million records. While ISO ClaimSearch tends to take center stage at the other end of the spectrum — detection and investigation of suspicious activity — the same data can contribute powerful claim fast-tracking capabilities.

You can use ISO ClaimSearch during the triage process at First Notice of Loss (FNOL) — along with additional integrated tools such as ISO ClaimAlert™: Foreclosure and ClaimDirector — not just to find fraud indicators but to determine which claims are meritorious. With that insight, you can identify the claims you can handle fastest — to the delight your best customers. You may also find you can reset monetary fast-tracking thresholds, drastically reducing your claims overhead and generating a significant cost savings for your organization.

The lessons from Sandy are still fresh in the industry’s mind, and the benefits of streamlined and efficient claims handling are clear. Now you have a chance to implement even more improvements with data and analytics you already have. Taking a new look at your existing system can help you retain customers, cut costs, and, in the end, attract new business.

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 1.2 billion 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 or 201-469-3103.