41 Percent of People Who File Insurance Claims Ultimately Switch Providers, Study Reveals

insurance claims center

It’s an alarming statistic and one that was highlighted at Connected Insurance USA this year. Accenture shared this number in a revealing claims customer survey titled, Why Claims Service Matters.

The company surveyed nearly 8,000 insurance customers, of which, approximately 40 percent had submitted a recent auto or household insurance claim. The findings warrant a deep dive by insurance companies that wish to improve customer experience and reduce churn. For example, 41 percent of customers who have filed a claim in the previous two years can be expected to switch providers in the next 12 months.

These compelling stats from Accenture prove the power of a positive or negative insurance claims experience.
For innovative insurance companies willing to strategically approach this problem, the most important customer satisfaction factors are:

  • Receiving a fair settlement
  • Speed
  • Transparency
  • Responsiveness
  • Empathy
  • Utilization of preferred communication channels

It is no surprise that mobile technologies (e.g. smartphones, texting, apps, etc.) are insureds’ preferred channels of communication. However, effective use of these tools within the claims process hasn’t been widely adopted.

Many insurance companies tout the use of apps, but the Accenture results clearly show that the “app solution” is not addressing the problem. Forty-three percent of insured haven’t heard of the apps, and of those that have, 46 percent don’t know much about them.

Retention isn’t the only benefit of communicating with customers in a preferred manner. It is also a big determinant within NPS scores. Accenture found that 52 percent of auto and 54 percent of home insurance customers will not recommend their current provider unless their preferred communication tools are utilized.

This leads to the two biggest questions an insurance executive should be asking:

  1. What are my customers’ preferred communication channels?
  2. How can my company meet my customer’s needs?

The answer is actually very simple: texting! In fact, 89 percent of consumers prefer text messaging over email or phone calls. On top of that, 77 percent have a more positive impression of companies that text. With a 98 percent open rate, texts are seen far more than emails (which have roughly a 20 percent open rate).

Insurance companies who enable communication through text messaging will also be able to use the claim center transformation as a competitive differentiator, therefore taking advantage of this high attrition rate. As the study shows, when insureds from other carriers start shopping around they will be looking for a new provider that communicates in their preferred manner. Establishing a customer-focused reputation will increase these innovative companies’ chances of acquiring new customers.

Insurance companies that offer customer-preferred communication channels such as texting will stand out from the crowd. As time goes on, it’s crucial to adopt new technologies and understand consumer preferences. The companies that fail to adapt will be left in the dust.

Zipwhip’s texting for business is the fast, easy and convenient way for customers and businesses to reach each other. Learn more today.

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