Trust: the glue of life
Zurich’s Charles Bush discusses the rebuilding of customer trust, a subject he spoke about at the recent European Intelligent InsurTECH Conference.
There is an issue of trust in our industry and specifically a lack of trust between the customer and their insurer. Here we will look at the subject of moving to a customer-centric insurance process, from the perspective of commercial insurance as opposed to the retail sector, so that is multinational, global companies that purchase their insurance in the London market.
Beginning with the topic of trust, insurance is purchased by customers who want reliability from their insurers to agree to pay valid claims as well as the management of those claims through behavioural excellence. This is not only achieved by buying trust in a brand, or a company’s financial stability, but also in its people and their behaviours.
Based on a number of newspaper headlines and industry reports, it would appear that we are falling short of this mantra; the very mantra that insurance was founded on of utmost good faith. Of particular relevance is a global report by Ernst and Young – Reimagining Customer Relationships: Key findings from the EY Global Consumer Insurance Survey 2014.
It is pretty damning that E&Y’s research shows the percentage of consumers who cite ‘complete trust’ and ‘moderate trust’ in the insurance sector is in the bottom two of the six industries surveyed in all but two of the eight territories. Only in LATAM is the insurance sector rated more highly than the banks, which considering this report was commissioned in 2014, at the height of the global financial crisis, makes for even more depressing reading.
The report states that of the most important characteristics during an ongoing relationship with an insurer are: being ‘easy to understand’, ‘clear communication’, and ‘being easy to deal with’. The report goes on to state: “Consumers are telling us that stronger, two-way relationships may be the key to future market leadership in insurance. Certainly, they would not mind hearing from their insurance providers more often.”
I agree with this statement from EY and believe that customers, having purchased an insurance product, expect an open, reliable, honest, and transparent service that is founded upon strong relationships.
This is painting a slightly bleak picture, however – we all know this is not always the case and there are countless fantastic examples where the opposite is true. In the right hands, our insurance industry can absolutely deliver for our customers; however, it is about doing it consistently.
During the past 18 months, Zurich has sought to deliver a customer-centric claims process, in turn building trust with our customers, through the delivery of our Claims Commitment.
From the outset, we looked to create our Claims Commitment with the engagement of our customers through formal working sessions combined with ad hoc feedback on what they saw an excellent claims experience looking like.
At the core of our commitment are four pillars which set out the principles of how claims professionals at Zurich engage with our customers.
These are that the claims experience should be:
Clear – We want our engagement and our communication with the customer to be clear, and to avoid ambiguity.
Personal – There is not a one-size-fits-all approach. Simply put; insurance as a product is personal to the buyer, and therefore requires a tailored service.
Effortless – We want the claims experience to be effortless on the part of the customer. As an example, although the customer will need to provide certain information we want to ensure that this is requested with a purpose, asked for only once and where possible, stored on file from the underwriting submission.
Collaborative – We want to engage with the customer at the earliest possible opportunity. For instance, on large claims, shortly after notification, we will arrange a conference call with the customer, the broker and the appointed experts.
In order to deliver a claims journey in line with our commitment, it requires robust leadership where the claims handler is able to form a strong and agile team, giving clear instruction, which in turn leads to a prompt assessment on coverage. Key to achieving this is the effective and transparent approach to communication with the broker
Aside from the four principles of our commitment, one way I believe we can restore trust in our industry is through large loss scenario workshops and pre-loss customer engagement.
It is my belief that in our quest to build engagement and trust between the various parties to an insurance contract, claims professionals need to engage with our customers directly pre-loss.
With the cooperation of the broker, and willingness from the customer, insurers supported by a loss adjuster work through hypothetical loss scenarios enabling all stakeholders to develop a mutual understanding of how the policy would respond in the event of a claim. Such engagement enables the parties to understand one another’s businesses, for insurers to learn the customer’s emergency response measures and their business continuity plans and is also an opportunity for us to set out the various roles and responsibilities of individuals in the claims process, including their approach to claims management.
There has been a recognition that for London Market insurers to remain competitive and be the go-to marketplace for complex insurance risks, we need to modernise and enhance our claims operation.
In summary, the London insurance market is seeking to modernise and streamline existing claims practices for non-complex claims through the introduction of a collaborative cross-market programme known as the Single Claims Agreement Party initiative (SCAP).
I am fortunate enough to be the Chairperson of the working group tasked with drafting the SCAP clause, and while the workings of SCAP are complex, the underlying objective is simple.
Current claims practice is that company market insurers agree all claims for their own interest, irrespective of quantum and whether or not they are the lead insurer. Lloyd’s is different in that it has the Lloyd’s claims scheme and while this is an improvement on company market practice, it is by no means seamless.
The introduction of SCAP will mean that for London market, non-complex, low value claims under £250,000 for the slip interest, the SCAP clause will introduce a delegation of claims handling authority to the slip leader. In practice, this means that the leading insurer on an in-scope claim will make decisions that will be binding on all the following insurers who have adopted the SCAP clause, irrespective of whether they are a company insurer or Lloyd’s syndicate.
This customer-centric initiative was established to enhance the London claims service, with the aim of streamlining and simplifying the claims agreement model for the benefit of our customers. It is intended to promote a quick and efficient claims process, thereby improving and reinforcing the attractiveness of the London market.
Charles Bush is UK head of property and energy claims at Zurich Insurance
In November Charles was awarded ‘Young Claims Professional of 2018’ by the International Association of Claims Professionals
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