Exceeding customer expectations


In 2017 Lemonade, an Insurtech company reported a claim handling world record. The insurer reported a claim settlement speed record – 3 seconds and no paperwork.

According to the insurer, a policyholder submitted a theft claim for a $979 Canada Goose Langford Parka on Dec 23, 2016. Within seconds, AI Jim, Lemonade’s artificial intelligence claims bot, reviewed the claim, cross referenced it with the policy, ran 18 anti-fraud algorithms on it, approved it and sent wiring instructions to the bank, informing the policyholder the claim was paid at replacement cost and closed.

This event was lauded everywhere as heralding an era of insurance customer’s delight by using state of art technology. In personal insurances claims most of the companies do provide a simplified and seamless way of claims settlement. Broadly claims fall into three categories:

  • Small, straightforward claims, settled efficiently and generally with good customer experience. This represents the majority of claims.
  • Large straightforward claims settled quickly. This, unfortunately, is rather rare.
  • Large, complex claims where insurers can be slow, and process is cumbersome

In Indian market lot of initiatives have been taken by the insurers and average time of personal insurance claims settlement is days or weeks and not months as it used to be earlier when entire claim process was manual.

But improvement in claims processes has not stopped customers expecting even better experience. If you ask an ordinary insurance customer how satisfied, he is with the services of his insurance company the answer in all probability will not be a satisfying one. Since the real test of a general insurance policy is at the time of a claim the pain points from the view of a customers can be summarized as under:

Not knowing how and whom to report a loss

Lack of empathy after reporting the loss

Excessive paperwork

Delay in processing of the claim

Denial of claim

Lack of communication

Adversarial attitude of surveyors and other claim handlers.

Claim payment less than expected

Grievance resolution

Despite substantial technological innovations in communication and response systems the roadblocks in communication still exist. Different strata of society are comfortable with different means of communication. The old generation prefers face to face communication or personal phone calls with real person at the other end whereas the new generation is comfortable with the toll-free line or chat bot or other electronic means of communications. Despite many companies having provided quick means of communication through electronic means customers still feel frustrated with the lack of response or adequate response from the insurance companies. Many a times they approach grievance redressal cell of the company or Ombudsman

In Indian market when you see the insurance claims data available in public disclosures of insurance companies you find the average claims settlement ratio as more than 95% but most of the large claims take years to settle.

That brings us to question what is lacking in the claim process that leaves customers dissatisfied. It boils down to the pain points mentioned above and high expectations from insurance companies. The next question is what industry is doing to address those pain points.  Due to constraints of space we cannot address the large and complex claims here but for the smaller and personal claims following steps could make the claims process easier:

Some of the steps industry can take in India are as under.

Simplify policy wordings

Online claims settlement

Increase use of ML and AI to speed up the process of claims

Increasing cashless settlements in motor OD and health claims

Parametric claims settlements where an assured amount is payable in the event of a loss triggering

What customers can do to ensure that their claims are settled quickly

Be transparent and truthful in providing information during buying insurance and at the time of reporting of claims. In motor it could be previous insurance details, claims history etc. whereas in health the previous health history preexisting diseases should be stated truthfully. Contrary to general impression that revealing such details could impeded the settlement it rather helps companies to understand the fortuity better and there is exception where such information does not come in the way of claims settlement

Take help of their agent or intermediary to complete the formalities and paperwork.

Provide all information quickly.

Even after doing everything listed above the claim is not settled, approach grievance redressal mechanism of the company which is available in every company’s website.