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We’re currently experiencing the aftermath of a particularly disruptive period for the relationship between a customer and their car insurer.

The insurance loyalty penalty is at the forefront of consumer consciousness following the “super complaint" submitted by Citizens Advice late last year. This is likely to have contributed to the record number of households switching at least one financial product in 2018, with car insurance the most common. A number of new flexible insurance services have sprung up in response to this disruption, challenging established players.

In this context, a simple claims process should be a hygiene factor. While we know price and product are important to attract new customers, customer service is key to retention. Yet the Financial Ombudsman Service received over 12,000 complaints related to motor insurance in 2017-18 – a third of all insurance-related complaints – UK consumers are not always happy with the service they’re receiving. And scrutiny around the claims process is set to increase.

The FCA recently launched a consultation proposing that insurance firms report general insurance values data for publication, including an additional measure to identify where unhappy consumers have made a complaint as part of the claim process.

It’s clear that there’s more of a need than ever for insurers to re-examine their claims processes, to ensure they’re as simple and pain-free for their customers as possible. Regardless of size or product offering, there are four simple steps that all insurers can take to do so:

1. Look at everything you do through your customers’ eyes
It’s widely understood that customers principally care about their time, the amount of effort they have to put in to choosing an insurance provider or interacting with them, the quality of the product or service they receive, and the price they pay.

Customers don’t want to pay for waste and inefficiencies within your processes and procedures – insurers should look to identify these and remove them as soon as possible. Classic examples include internal handoffs and measurement of internal SLAs.

If you approach the process with the intention of ensuring it flows for your customer, getting it right first time every time becomes the focus. Internal handoffs are minimised, specialisms are challenged and often your frontline handlers and systems can be trained to deal with issues at the point of enquiry.

Crucially, you only measure the things the customer cares about, which creates an efficiency of itself through reduced inbound enquiries and increased satisfaction.

2. Bring in like-minded partners to help you achieve your vision
Businesses struggle when they try to do everything themselves. Picking the right partners to solve problems and drive improvements is crucial. Partnerships between established providers and third parties are common practice across the insurance industry – and can be used to bring in external best-in-class customer experience-led technologies to augment your offering.

At First Central, our in-house software, Focus, was built with integration in mind. We’re looking to invest and work with partners in the future to help develop our technologies, and ultimately provide our customers with quicker and more accurate claims settlements. 

3. Create an internal culture of continuous improvement
The people who are closest to the customer – your claims handlers and customer service representatives – know best. They see problems and opportunities first, and will invariably know how to solve them. Create a culture which empowers them to do so. At First Central we encourage everyone to put ideas forwards, and we involve them throughout. Always do change with people, not to people.

Insurers should also be sure to use data and fact, not opinion, to drive decision making. All too often people find reasons not to do something, with just a hypothesis as a basis for the decision. In this day and age, it’s relatively easy to try out different approaches and understand exactly what difference they make. Be brave in trying different things, and move on quickly if they don’t work.

4. Personalise
Whilst the insurance industry has previously faced backlash for using data from customers’ social media platforms to calculate premiums, broadly speaking, consumers are happy for businesses to use their data if there is a benefit to them.

Smart use of data, for example, can help insurers protect their customers from fraud, and help provide more personalised products and services. As long as insurers are transparent with their use of customer data, and demonstrate that they are compliant with regulations around data use, then they will be able to capitalise upon a powerful opportunity to improve the experience of their policyholders, and increase their loyalty.

Read Jonathan's views on the Civil Liability Bill.