The operation of processing a life insurance claim is the greatest opportunity for life insurance companies to make an impression on an insured’s family and friends and therefore, make the case to do business with them.
A recent study by LIMRA found the manner in which a claim is processed is more often than not indelible — for better or worse — rendering the company with little room to maneuver afterward.
The study, “The Moment of Truth: Individual Life Insurance Claimant Satisfaction” found that 95 percent of life insurance beneficiaries were “satisfied” with their claims experience. However, the study also found that there is ample room to improve in order to bump respondents’ claims experience into the “extremely satisfied” strata.
There are discernible and practical differences between the two that come down to much more than a superlative adjective. Respondents who reported that they were “extremely satisfied” are nearly four times as likely to be interested in doing more business with the insurance company; more than three times as likely to recommend the carrier, and more than twice as likely to feel strongly about the critical role that life insurance plays following the death of a loved one.
The survey found that top-performing companies separated themselves in the areas of responsiveness and ensuring an easy claims experience. Close to 75 percent of surveyed beneficiaries reported that the claims process was easier and less stressful than other administrative tasks. Beneficiaries gave higher ranking to companies that exhibited “care and compassion” and “knowledge and competence.”
The median turnaround for top-performing companies’ claims processing was found to be 19 days, with beneficiaries exclaiming that they were pleased with how quickly their claims were turned around.
Just over 25 percent of beneficiaries worked with an agent during the process although those that did were effusive in their praise for the agent. Although the claims process can be transactional, companies and agents can stand out in the service arena. Insurers that offer grief counseling, coordination and legal services will leave a positive impact on beneficiaries. An easy way for companies to do so is to train their distribution team to play a more personal role before, during and after the claim.
LIMRA surveyed 4,242 life insurance beneficiaries who received a death benefit for one of 11 participating carriers during the second quarter of 2012.