Are insuretechs outpacing insurance companies when it comes to offering faster claims and niche products?

4th June 2019

This week an insuretech firm, CoverGenius, revealed that customers are waiting 10.5 weeks on average before a claim is processed. Unsurprisingly, being slow to process claims is one of the biggest frustrations that customers have with their insurers.

If there’s nothing wrong with the claim – then why does it takes so long? The answer is that in this day and age there’s simply no excuse for such poor service – especially when companies have all the technology at their disposal to make the process more efficient.

CoverGenius’ research highlights that the delay creates unnecessary stress and inconvenience for customers and in the worst cases it is even impacting their relationships and their work too.

The frustration is heightened when a comparison is drawn to other financial services providers. Many banks have created apps for easy, effortless interaction and transactions for customers. With just a click of a button, transfers and payments can be made instantaneously.

CoverGenius’ report highlighted the following challenges and frustrations with the claims process:

  • 29% found that they were subject to having multiple conversations to give information
  • 24% found they had to chase the status of their claim
  • 22% said there were delays in responses from insurers
  • And 22% said they felt they were treated with suspicion from the claims operator

Surely an app would provide an answer to most of these problems? Instead of having multiple conversations with different people in the call centre and having to repeat the same story the app could provide a platfrom where a customer could upload all the information of the claim – proof of address, pictures of the lost or damaged item and any other relevant information.

Instead of chasing claims, an app could also help to tell a customer how their application is progressing through the use of a breadcrumb trail. It could alternatively provide updates via alerts to keep customers informed. Customers will also not feel judged as there’s no emotion that could be read from an app.

It’s not like this hasn’t already been done by some insurers.  American based Lemonade showed the industry how it should be done by using bots and machine learning to allow customers to experience the joy of zero paperwork and a hassle-free application process that doesn’t involve call centres.

Yes – the entire customer experience is app based and it’s chatbot even has a friendly name (Maya). The insurance company boasts that its AI can evaluate claims in about three seconds but it’s not the only one that has built technology to help it process claims this fast.

Across the pond Axa’s fizzy provides automatic and direct compensation to policyholders if their flight is delayed. It uses blockchain technology to make the claims process smoother and there’s no need for customers to report the claim.

Both companies created technology that would help customers with immediate payouts letting them get on with replacing what they lost and enabling the insurers providers to bask in the glory of providing instant solutions.

The good news is that more companies are investing in technology to speed up the process. According to one report by postonline.co.uk, 87% of insurers are investing more than $5million (£3.8million) a year into AI. What’s more, half of them are planning to use technology to transform their business in the next three years.

But is this all happening soon enough? Perhaps not. Just this week we read about how Uber partnered with tech company Inshur to offer insurance services to its drivers. Through an app, drivers can apparently log in using their Uber ID, scan their licenses, select a policy and pay for it.

If insurance companies are slow to provide an offering, it’s clear that companies are willing to partner with insuretechs instead, particularly if they are prepared to step in and offer service where there’s a gap.

 

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