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An insurance claim comes at a stressful time in a client’s life, often making it a negative experience. At least, that’s what you might assume. That’s why I was surprised when our latest research report, Why AI in Insurance Claims and Underwriting, showed high settlement rates in personal lines across all geographies. In this article, I’ll explore what exactly drives these satisfaction rates — and what you can learn from it.
How Long Does Insurance Companies Have To Settle A Claim
Overall, our research found that 70% of policyholders said they were either satisfied or very satisfied with the way their insurance company or agent handled their claim.
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For claims, this is quite high. And our survey is not the only data that shows this. JD Power’s 2021 survey focused on car insurance showed record high customer satisfaction with claims, reaching 880 on a 1,000-point scale. A similar JD Power survey of 2021 property claims showed a slight drop in satisfaction rates (from 883 to 871), but this broke a five-year streak of steadily rising satisfaction scores and is likely due to circumstances not directly related to insurers (such as which is eg supply chain disruptions and material shortages related to the pandemic). So what is causing the rising satisfaction rate?
Omnichannel communication and transparency are two reasons. Most insurers allow customers to open a claim on a website or app. The technology offers the convenience of using photos for inspection instead of scheduling a person to come to the site. And some insurance companies offer a dashboard to track the claim over its lifetime.
These are all important modernizations that have helped make the claims experience seamless. However, there is one factor that, according to our research, affects the satisfaction rate more than anything else: settlement speed. The longer it takes to settle the claim, the less satisfied the policyholder will be.
This insight is particularly important for insurers, as claims dissatisfaction is the main factor driving policyholders to switch, with 74% of dissatisfied customers either saying they have switched providers (26%) or considering switching providers (48%).
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Knowing that settlement speed is a key driver, how do underwriters continue to achieve high levels of satisfaction and, more importantly, build on it?
For many years, insurers have focused on omnichannel. We are now at the point where continued investment in omnichannel is yielding diminishing returns. Of course, this does not mean that omnichannel should be ignored. New routes targeting the younger generation, such as chat apps (WhatsApp, etc.), will continue to be an important strategy for insurers to expand their customer base. And refining or modernizing any omnichannel offerings insurers currently have will be key to staying relevant. I say that omnichannel is low-hanging fruit – most of which we’ve already picked.
Instead, insurers should focus on AI to automate the settlement process to make it fast, easy and accurate. Of course, this is easier said than done. Automating the settlement process requires robust data and analytics capabilities that are all connected into a single ecosystem.
Executives already know the importance of using AI in claims. The chart below shows that for each area of the claims value chain, at least 75% of executives said that AI and machine learning can bring “significant” or “great” value.
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However, there is a disconnect between intention and taking action. The same chart shows a gap, where even the most advanced area (claims adjustment) still only 44% of executives say they are advanced in their use of AI, automation and machine learning. In this scenario, our definition of “advanced” is still the “early usage” level.
Thus, about 80% of executives understand the value of AI in claims, and about 40% consider themselves advanced in various areas. Not surprisingly, investment in receivables will accelerate over the next three years, with 65% of respondents we surveyed planning to invest more than $10 million.
Insurers should not be discouraged, however, because settlement priorities are the same as other executive priorities, such as reducing administrative costs and leaking claims – and the solutions are the same. That’s why executives should avoid trying to solve each problem in isolation and instead ask how artificial intelligence, machine learning, and other automation can transform business in ways that hit multiple priorities simultaneously. For example, increasing settlement speed through automation will naturally reduce administrative costs and avoid claims leakage, while increasing customer satisfaction and retention.
Insurance leaders must also be bold in tackling bigger challenges and avoid investing too much time and energy in simpler priorities (such as omnichannel).
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Insurers know the value AI can offer, but are lagging behind in implementation. Fortunately, the latest jump to the cloud will help. The cloud is a critical foundation for leveraging the real-time data and modeling that will drive this type of automation.
Overall, there is still a lot of work to be done to get technology platforms to the point where they can automate settlement speed and better leverage AI across the business. But it’s clear that AI and automation should be invested in for insurers to reap the most benefits: happy customers, empowered employees and more resilient businesses. Read our full report on AI-led insurance transformation to learn more.
Disclaimer: This content is provided for general information purposes and is not intended to be used as a substitute for consultation with our professional advisors. Too bad. Many personal injury victims, however, will choose to negotiate with their insurance provider before escalating their complaint to civil court.
Although this approach has advantages, prosecutors may still encounter difficulties. Sometimes the insurance company may not respond in time. Knowing how long an insurance company has to settle a claim in North Carolina can help you formulate a plan of attack.
Should I Accept The Settlement My Insurance Company Offers Me?
Often, both the plaintiff and the defendant will seek a settlement before ever filing a formal lawsuit in order to limit the cost of legal fees and/or speed up the process. Letting the insurance claims process unfold allows the insurance adjuster to investigate the facts of the case as well as the severity of your injuries. Your medical records related to the injury will also be taken into consideration.
From there, you will eventually submit a claim to the insurance company. Working with an experienced attorney and a trusted doctor can help you understand the true value of your damages. At this point, it will be up to the insurance company to provide a quote in return.
It is important to understand that there is no specific time by which the insurance company will be required to respond. The process may be different in each situation, and there is no law that prescribes a deadline. One thing you can do is ask the insurance company to respond by a certain date, such as within thirty days of receipt.
Even after giving a time frame to the insurance company, there is no guarantee that they will respond. After a few weeks have passed, you may want to consider contacting the insurance adjuster directly, either with a follow-up letter or by calling the company to inquire about the status of your case.
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If you have followed all these steps and still have not been able to request an answer, you always have the option of continuing with a formal trial in civil court. In some cases, working with a reluctant insurer will force you into a formal case.
Staying in the game and negotiating with the insurance company is often a good way to increase the value of any settlement offered. But if your losses exceed what the insurer offers to cover or you feel the company is acting in bad faith, filing a personal injury claim in court is a good option to consider.
Having trouble negotiating a settlement with the insurance company? At Nye Law Group, our experienced legal team can help you earn the settlement you deserve. Our consultations are free.
Call 912-200-5230 or fill out the form below to reach an experienced Charlotte personal injury attorney at The Law New Group. As the corona virus forces us into a new normal, the work of insurance companies has not stopped. They must continue to sell, renew insurance policies and handle claims.
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Insurers responded to the new circumstances with different approaches and new work processes. Their customers have access to online support and companies have moved to online sales meetings. Deadlines for compensation claims and submission of documentation have been extended. The validity of insurance policies is automatically extended. The exposure of their employees is limited by using virtual communication tools to ensure smooth operations given the current situation. By adopting these measures, they gave a helping hand to their customers and relieved them of some worries.
Disruptive changes in customer behavior and emergency responses have dramatically changed workloads in organizations. Many on site