In this extract from DST’s insights paper ‘Growth from the inside out: Mastering the complexity of operational excellence in financial services’, Head of Relationship Management Shaun McKenna explores the profound impact of operational excellence on claims management and customer retention.
There are two things that really stand out about claims.
Firstly, they are a relatively infrequent opportunity for an insurance company to prove its worth. In the extreme case of life insurance, a claim is the one chance to deliver in a customer relationship that may have lasted 40 or 50 years.
Secondly, claims managers are often dealing with people facing significant stress – aggrievement, injury or illness, or significant personal or financial loss.
If ever there was a moment of truth in financial services, this is it. An insurance claim isn’t just about a customer claiming on their insurance. It is also about the insurance company claiming that customer… once and for all.
But, unfortunately, insurers have been placing their attention on customer touchpoints while viewing the claims management process that underlies it as a pure expense. They either innovated with a primary focus on cutting cost or avoided innovation entirely by maintaining spreadsheets and printed or PDF manuals.
This leads to a customer experience that promises much, but fails to deliver. It is also the prime reason why, according to a 2016 DST survey:
To make matters worse, the ‘do nothing’ approach is more likely to increase costs than reduce them. It leads to slow, manual processes, excessive handovers, difficult to find records, experienced examiners performing routine tasks, duplications, errors, limited compliance and performance reporting capabilities, poor communication, and a raft of other issues.
Thankfully, this is now changing. More and more insurers recognise that the claims process itself is the real source of differentiation; and they are applying operational excellence principles to change the claims game.
Put simply, operational excellence is the ability to deliver sustainable competitive advantage through enhanced operational performance. It is achieved by aligning your planning, people, and processes to clearly defined customer and organisational goals. In this case, that means a claims process that empowers customers while optimising efficiencies and compliance.
Based on the work of Sandy Kemsley in the DST-sponsored ‘Case Management in Insurance: Focus on Claims Processing,2 operational excellence will drive these benefits by unlocking the ability to:
You could further add to this list:
In the end, there is one reality operating here. Your customers’ claims experience will ultimately be defined by what they cannot see, rather than what they can.
To learn more about operational excellence, register now to receive DST’s next insights paper ‘Growth from the inside out: Mastering the complexity of operational excellence in financial services’.
This insight was first published in the September 2017 edition of Australian Banking & Finance magazine.
1 DST Systems, ‘Consumers, claims and key concerns’. November 2016, https://www.dstsystems.com/insights/consumers-claims-and-key-concerns
2 Sandy Kemsley, ‘Case Management in Insurance: Focus on Claims Processing’, July 2016, https://www.dstsystems.com/insights/case-management-in-insurance-focus-on-claims-processing