While facts and figures and new and improved product offerings can sway a potential policyholder when choosing an insurer, once that individual is a customer, the importance of having empathetic and highly-trained claims handlers on the telephones could make all the difference when policies are up for renewal. Stephanie Denton reports
Claims are an insurer’s shop window. Claims handlers have the task of delivering the product that the brand has portrayed and a claim is when policyholders test their insurance policies. So claims handling may be seen as one of the most important roles in the company. A recent roundtable, held in association with Blueprint, therefore, gathered experts in the claims arena to look at the role of claims handlers and the effect of insurers’ alternative approaches to assessing the performance of this key team.
Bob Still, customer services director at MMA Insurance, started the debate by saying how important claims handlers as individuals are: “The claims handlers are often the first contact that customers have. So we rely on a higher level of skill and experience to manage what are sometimes quite complex situations for customers.”
“The product knowledge is secondary because they have to be able to deal with the event. So on the claims side of first notification, we want people who are well organised and can understand what has happened to the customer and put in place what needs to be done – as opposed to an underwriter, who needs a lot of product knowledge. So it is really somebody who can take on board all the salient points and anticipate almost what is coming next.”
Graham Gibson, director of claims at Groupama, agreed: “When the customers come to us, it is in a distress situation. So we are dealing with somebody who is not in a comfortable state of mind and our claims handlers need the skills to have the empathy to actually control that customer and control the emotional side.”
“If anything, in the past we have probably been guilty of trying to get a technically correct answer rather than understanding that the claims handler is the customer’s sole point of contact with the insurer,” added Andrew McBride, claims director at QBE. “And they will judge your performance by that individual.”
With this in mind, Mr Gibson explained Groupama’s strategy: “We have gone for putting quite experienced handlers at the front end and the first notification of loss, probably more so than most other insurers. I think we have all been there, we have all had what I, perhaps unpleasantly, refer to as ‘kids on phones’, 18-year-olds with six weeks training who are then put on the phone in front of the customer and perhaps because of life experience, or perhaps because of the stress situation, these poor individuals struggle.”
Mr Still explained that experience is important: “18 and 19-year-olds are not often familiar with paint and plasterboard, whereas older people who have got some life experience are familiar with these type of things. And we find the more experienced individuals can strike up a degree of empathy that the customers require.
“Due to their experience, they will know from what the customer says what the next stage will be and they are able to talk the customer through that. So we are looking for somebody who has good customer skills, good empathy and is able to, in clear ways, tell the customer what is happening next.”
Tactical change
And this change in strategy by insurers is also changing the perception of the role within insurers. Stephen Roberts, head of UK claims at Brit Insurance, explained: “We have actually noticed, because we now appreciate the front end of the process, the jobs we offer in call centres are actually attractive. People are now choosing to come to the call centre as an advancement in their career, rather than either at the start of the career or the end of it. It is a place they want to be because it is now a much broader role for them.”
Rob Smale, claims director at Fortis, supported this: “There has been a problem in the industry when we were thinking of claims centres as call centres. It was usually the first job that you had when you joined the insurance industry then. If you were lucky, insurers let you out after a year and you went into a proper claims job. I think we are managing to reverse this now.”
And Mr Gibson added that giving claims handlers some responsibility makes a difference: “When somebody has the experience and the team manager says they are ready to get some ‘proper claims authority’ so they can actually authorise payments, it is a significant step up in responsibility. To go from a humble claims handler to someone who can actually pay out and spend the company’s money – that means a lot to people.”
Mr Still agreed and said the industry has made progress in this area: “The perception within the claims community used to be that claims was a starting point for a career, not somewhere that you would aspire to be. But I think the corner has been turned on that.”
And the company’s strategy with regards to how they allow that handler to deal with the customer is also important. Mr Still explained that allowing claims handlers to have a broad role is important: “People who deal with customers’ point of contact on the telephone act as a broker for the customer. They are the people who organise the customer’s claim, they are the ones who deal with contacts and the suppliers.”
Broadening horizons
Mr Roberts supported this: “Having empathy for the people is actually something that people are attracted to. And you get a much better calibre of person if you have got a broad job role for them.”
Also allowing a handler to own the call can make a difference according to Tony Emms, motor claims director for Zurich UK: “It becomes quite confusing for the customers about who to speak to, who is calling and who is handling the claim. Most of us are looking towards having someone who owns all of the contact, which is probably more complex to arrange but it is much better for the customer.”
Mr Gibson added that giving the handler control has been proven to improve the customer experience in his firm: “One of the things that frightened me around our customer statistics on households was when we dealt with the claim we were getting 90% to 95% customer satisfaction but then we started to hand off to some suppliers and it was below 10%. So that was a pretty scary number.”
Mr McBride added that this is particularly important in commercial claims: “A commercial customer does not just have one claim every few years, they have quite a number. They are not just looking for someone within the insurer to be responsible for this claim. They are looking for the same person to be responsible for all their claims so they have continuity of contact.”
Mr Smale said that the other important factor is allowing claims handlers the time to deal with customers: “I think the longest call we have ever recorded was an hour and a half. But you have got to allow that to happen.”
“We now look at the number of touch points it takes to settle a claim. And since we have given this latitude at first notification of loss, previously a claim was taking four and a half calls per claim; but it is now down to 1.8. That is a huge benefit to the customer and to the company.”
Another way insurers are giving claims handlers freedom is by throwing away the scripts. Mr McBride explained: “We don’t use scripting for anyone who is in contact with a customer because it is a pretty painful experience.”
Mr Gibson added: “You know when you are talking to someone who is working to a script, it just sounds awful. And it does not give the empathy, it does not allow the handler to use their initiative. How can you possible empower a handler if they are working in a scripted situation? Given the choice between working in that very controlled, very scripted environment or working in an environment where you can actually use your own decision-making processes to come up with a solution, I think we would all choose the latter.”
But Mr Smale said there still needs to be some control. “We have replaced scripts,” he explained. “We have gone to systems that are now supporting the conversation in a logical way. And allowing the handler to be themselves whilst still getting the information in the right place at the right time.”
Window dressing
It is a well-known fact that insurers have been cutting costs across the business for some time so how has this affected claims departments? Mr McBride said: “Across the industry my perception would be that some insurers are actually investing in their claims departments because they see them as their shop window. That does not just mean investment in technology, it means investment in people as well.”
And Mr Roberts explained: “It is proven with extra support and with the ability to purchase better staff and better systems, we can provide a better service to a client. It is probably costing us less overall because we are actually getting the investment in on the claims side to deal with things efficiently and well. And it is also improving the customer experience at the same time because they are actually getting that empathetic first touch. Then they are getting services that actually relate to their understanding of how the product should operate.”
Mr Still added that getting claims wrong can cost more money than investing in this department in the first place: “We have to accept any move away from the right first time management, it costs money. We all know how long it can take to solve an average complaint, never mind a difficult one.”
And how do insurers measure the success of their claims departments is it as a group or as individuals, and what are the key measures? Mr Gibson said: “We have a balanced score card approach, which drives claims handlers bonuses. There can be occasions when we actually drill it right down to the individual handler, but certainly we operate on a team basis.”
However, Mr Smale added that scorecards do not always accurately reflect what is happening: “It forces you to split data into the quadrants of the balance score card and sometimes, when it comes to customers, it is quite hard to populate that quadrant only by looking at a satisfaction survey. Actually, something like staff turnover is a customer satisfaction indicator.
“If you have a high staff turnover, you have probably got poor satisfaction. If you have got lack of compliance with the chosen process, that is probably a dis-satisfier. Either the handlers are not able to guide the customer down the right process or they are having to subvert the process because the process is wrong. I support the use of balance score cards, but I think you have to be careful.”
Mr Emms supported this: “You need to be careful you don’t drive the wrong behaviours. If you have an individual who knows that he needs to hit certain numbers for his bonus, it might drive him to do everything in his power just to achieve those numbers. For that reason, I would be a little concerned about taking it to the individual level and would probably be more interested in the team level.”
“We don’t use any metrics for driving down cost or crashing through thousands of calls,” explained Mr Roberts. “Most of our reward structure is based around improving yourself through training, producing good results as a team such as lowered complaints.”
Healthy competition
Mr Emms added that competition can be a positive thing in terms of different teams in one company: “It is very healthy to have teams in competition to some extent. I like to see the teams looking at each other and saying well we have achieved a better score than that team. Then they are all striving to improve.”
Mr McBride supported this: “I have seen a lot of environments operate very successfully in a competitive context. As long as the metrics or the measures are the right ones and they can’t get an advantage over each other by impairing the work of each team, they can only get ahead by delivering exactly what is being asked of them.”
However, Mr Smale raised the point that this can make measurement harder: “This has made life for our managers a lot harder. Using a clock and a pound note makes it easy to measure. But now we measure people and tell them how they have measured against other people.”
And Mr Gibson said this is a massive change from how it used to be done: “If you wind the clock back five or maybe 10 years, we would all have been talking about average call times and how quickly we can drive the customer through.”
Mr Roberts explained why this change is important: “We want to see whether, from a management perspective, changes that we might make to process make a difference, good or bad. We are not targeting the individual with a whip, that is just not the right way, it does not work.”
And although insurers are making steps in the right direction, the attendees agreed that there are still many unanswered questions. Tim Reason, a senior consultant at Blueprint, asked: “Does the act of measurement within those teams actually make a difference? And if it does make a difference, is it positive or negative? And by that active measurement, can you start to look at the processes that you have and change it?”
Financial crosshairs
His colleague Paul Frith, a senior consultant at Blueprint, said that this would be key for insurers in terms of knowing when and where to spend money: “If a firm is going to spend £1m or £2m on operational expenditure, understanding the key levers across the board and knowing which is the one thing that can keep the customer satisfaction up is important.”
But Mr McBride doubted the insurance market would achieve this: “Claims management is extremely complex, there are a lot of moving parts in there and it is different for each product line and for each sub-product and for each set of customers within that. We all work hard to try and understand that, but if we think we have got all the answers, we are badly misled.”
Mr Roberts supported this and added that, despite all the hard work providing a good service and measuring teams’ progress, there is always the issue of customers buying on price to contend with “When we provide a good customer journey, which happens more often than a bad journey, what does that actually mean for us as a company in terms of retaining that client? We put in a great deal of effort individually and collectively in the claims part of the industry to provide the service to clients, yet I am not convinced that clients look even after a really good performance to anything other than the price of the product.”
He concluded: “Quite often, someone will be paying £400 or £500 for a product. We might give them £40,000 worth of recompense under that and they will still go and move to one of our competitors at the end of the year.”
Story Credit: Post