The fairness of claims settlements is the main source of dissatisfaction for personal lines motor claimants, according to a survey carried out recently for the advisory firm Accenture. Household policyholders cited claims advice as their problem area, which motor policyholders had as their second issue.
Accenture’s measure of dissatisfaction is based on the gap between the quality of claims service expected by the claimant and the quality of the claims service they felt they actually received. So essentially it measures a gap in expectation.
What is particularly interesting in reports about the survey is the reactions of insurers – these offer a window into the mindset of senior claims staff. It’s a timely window as well, for the UK’s Financial Conduct Authority (FCA) is current doing some research into the mindset of motor claims staff as part of a review into ethical culture. I’ll look at three messages those reactions send out.
Firstly, insurers seem to see the policy as having been bought, not sold. This distinction may be a subtle one, but it could say something about the underlying assumptions about customers at the heart of an insurer’s ethical culture. Policies ‘bought’ implies that responsibility for the purchase is tilted towards the policyholder, while policies ‘sold’ implies a tilt in responsibility towards the insurer. Another way in which this distinction comes out is in the view that any misunderstanding about the cover arises from how ‘how you’ve read the policy, not how I’ve written it’.
Secondly, insurers seem to view the role of their claims service as largely disconnected from the business of attracting and retaining customers, with the role of price comparison websites cited as an important factor in this thinking. Yet the Accenture survey shows that 7 out of 10 motor and household policyholders would look for an insurer with a good claims record. Finding that out is difficult at the moment, but could be easily overcome if price comparison websites incorporated a ‘Trip Advisor’ style feedback facility, or the FCA follow up on their outline idea to have insurers publish claims performance data. When claims performance becomes more transparent, that disconnect (and more particularly, the assumptions underlying it) could become a problem for some insurers.
Thirdly, insurers think policyholders see their claims service as a reluctant necessity – in other words, you’d prefer not to use it, but when you do, you want a good one, and not one you want a relationship with. On the surface, there’s something in that view – no one really wants to make a claim, for it involves a loss and all the disruption that goes with that. However, that seems to be about as far as it does go, for if price comparison websites now play such a prominent role, insurers’ main chance of having a relationship with their policyholder is at the point of claim. And while the insurer doesn’t want you to have another claim, it should want that short relationship to influence your longer term sense of connectivity with them. Price comparison websites may now dominate the policyholder / insurer relationship at its inception, but there seems no sense in insurers giving up on that relationship altogether. If that is now becoming part of the insurer mindset, then it potentially leaves the ethical culture amongst claims departments open to all sorts of ‘don’t care’ influences. Out of such circumstances all sorts of problems can arise, as the Competition Commission’s forthcoming report may highlight.