Ultimately, the most important thing an insurance company can do is pay valid claims as promptly as possible.
This is what claims teams seek to do, and the evidence suggests they are getting better. In critical illness, for example, 92.2% of claims were paid out across the market in 2016 (1), compared with just 80% in 2005 (2).
How are protection providers closing the gap?
According to Geoff Butcher, UK claims officer at Zurich, providers should frequently “take a step back” and look at which elements of their claims process are working, and which could be improved.
Two years ago, Zurich’s claims team locked themselves in a room and discussed every aspect of the process. From an initial list of hundreds of recommendations – some large, some ‘marginal gains’ – they settled on 47 improvements.
“We worked our way through them one by one, and implemented them,” Geoff said.
In 2017, Zurich paid 95% of critical illness claims and 99% of life insurance (death) claims (3).
One of the changes made at Zurich was a simple – and instant – one: claims handlers became claims specialists.
“We wanted customers to know they were dealing with a specialist, and a person rather than a process,” Geoff said. “This meant case ownership: the specialists were empowered to make decisions and act according to the claim. For example, you may handle a claim differently if a customer is in hospital rather than at home.”
Another tweak was straight out of the digital playbook: customers are now invited to email or even text in medical evidence if they prefer to do so.
There was an acknowledgement that perhaps the last thing a claimant who had been diagnosed with a serious illness wanted to do was complete a claims form. So claimants can now take a photo of their GP’s or consultant’s letter and send it in digitally.
“This was a massive step forward,” said Geoff. “We’ve seen a drop in our end-to-end times and the [customer] response has been great. I’m not sure, actually, how many advisers are aware that we do this.”
For certain types of protection claims, there are traditional ‘blockers’ to a swift payout. For example, on death claims, the grant of probate can be time consuming and hold up a payout.
Likewise on income protection, claimants often wait until their deferred period is coming to an end before informing their adviser or insurer. As well as delaying the claim, the customer will still likely be paying a premium during this time.
So Zurich made two simple changes: it upped the limits it would pay on death claims without probate, to £75,000 if there is no solicitor, or £150,000 if there is.
Similarly, on income protection, it incentivised customers to make a claim as soon as they knew they were having some time off work due to illness or injury – by instantly stopping the premium while they processed the claim.
Geoff said: “An income protection claimant might look at their policy and it will say there is a deferred period of six months, so they might not let us know for five months.
“The problem is that if you’ve been off work that long, the routine may have become entrenched. If we get early notification we may be able to arrange rehabilitation (Zurich offers rehabilitation services) or physiotherapy. It’s a mechanism for us to get involved sooner.”
'The team cares'
One element that often goes unnoticed is the effect handling claims has on the specialists – and the extra mile they will sometimes go as a result.
“I remember one example where we received two claims for breast cancer at the same time,” said Geoff. “The claims specialist, who dealt with both, learned that they were actually mum and daughter. They hadn’t referenced each other at all in their claims, but it soon became apparent.
“The claims specialist also learned that, at the time of their diagnosis, they had been planning a day together – a spa day I think. So we sent them some vouchers on top of the claims’ value. It had a huge impact on them.
“We can’t always do things like that, but we have done a few times. The team cares.”