Think again: preventing claims in insurance

People only make an insurance claim when something bad has happened. Does the way you deal with your customers’ claims then turn from bad to even worse? Wouldn’t it be better to work on preventing the claims from even happening?

Picture yourself as one of your customers. Someone keyed your car, or drove into your truck. Lifted your wallet. Stole your bike. Broke into your house.

Your property got damaged or destroyed by a wildfire, flood, monsoon or some other geography-dependent natural disaster.

Someone in your family got injured. Bad health means you can’t work.

For most people, such circumstances are a mega-pain, somewhere on a scale from major irritant to supremely stressful and a personal or family catastrophe. They’re usually followed by the painful practicalities of putting in a claim on some insurance policy you’d been paying into for years.

That’s when abstract theory about coverage suddenly turns into harsh reality. And it’s often a point at which people’s relationships with insurance companies reach a fork in the road. One path leads to a feeling of getting real support and help at a difficult, stress-laden time. The other leaves them feeling that the insurer is adding Insult to injury.

Experiencing a personal disaster is one thing. Adding the double whammy of then asking your customer to go through a painful claims process is probably a stretch too far.

Dealing with claims is often one of the rare occasions when insurers have a longer period of ongoing contact with their customers. Sometimes it’s one of the only real touchpoints.

The way the claims experience unfolds in practice can therefore have a key impact on a company’s reputation. It can make a crucial difference between a customer remaining loyal, and looking to shift their insurance coverage elsewhere next time it comes up for renewal.

Improving and refining the claims experience is therefore a big opportunity. Using the right tools, forward-thinking insurers can run intelligent, personalized campaigns designed to limit the kinds of occurrences that give rise to claims that can quickly become a sore point in the relationship between customer and insurer. For the insurer, it can be a fork-in-the-road decision between success (= reinforcing customer loyalty) or failure (irritating the customer enough to make them want to change insurer).

Claims mitigation and prevention solutions have been given a big boost by society-wide digitalization. But the rapid acceleration of digital take-up in the insurance world also means established companies are often under increasing pressure from competitors, new challengers, and break-the-mould disrupters. But they are also seeing opportunities for new, better ways to interact with customers. In this environment, a focus on claims prevention is providing new commercial openings and ways to build new, better forms of customer relations.

Claims prevention usually involves managing risk across a range of insurance businesses, from home to automotive to health. One important element in effective prevention lies in making people aware about the potential risk factors – what burglars look for to make their break-ins easy, for example, or the ways in which unhealthy diets and lack of exercise can contribute to poor health.

New predictive technologies – including artificial intelligence and advanced analytics – that can crunch customer data more effectively are now also being used to flag potential vulnerabilities and to suggest appropriate corrective measures. Insurers can use this data to drive new kinds of information and nudging campaigns.

The technological approach to claims prevention can also include using electronic hardware such as smartwatches and fitness trackers that can continually monitor the wearer’s health and/or vital signs, smoke and fire detectors. It can also feature event data recorders for vehicles. These register speed and acceleration, along with distinctive driver behavior, in an effort to identify those exposed to greater risks of an accident.

However, the huge amounts of data that such technologies and devices provide – amounts that will increase exponentially with the widespread rollout of the Internet of Things (IoT) – are only as good as the infrastructure available to process the data flows, and to repackage this potentially valuable information into formats that enable insurers to take concrete measures to manage and reduce risks and reap solid commercial benefits.

As just one example, software like digital experience platforms (DXPs) can help insurers keep ahead in fiercely competitive markets by helping do away with the need to make a claim in the first place – rather than helping process lodged claims in any cost-effective, user-friendly way. Prevention is better than cure.

The main purpose of digital experience platforms is to help and enable organizations to digitally interact with customers and other interested parties, and make sure these business processes and communication experiences can be managed and implemented effectively and responsively.

These software platforms can help insurers keep one step ahead of their customers (and of their own cost burdens), by helping prevent claims from happening, rather than processing them once the unfortunate event has occurred.

Magnolia and its ”create once, publish everywhere” capabilities is a great tool for insurers to use as part of effective risk prevention campaigns that can be sent through any appropriate communication channel. It helps insurance companies’ customers learn how to adapt their own behavior and promote best practices through tailored, targeted information and help about prevention measures. This value-laden content also helps to strengthen relationships throughout the so-called “customer journey”.

Magnolia and its distinctive combo of low-code software and easy-to-deploy capabilities gives insurance companies the practical, intuitive tools they need to quickly and effortlessly mold and deliver appropriate, targeted communication about many different aspects of how to prevent bad things (a.k.a. insurable events) from happening.

Magnolia enables you to quickly, effectively distribute and deliver key messaging and information, in the many different forms of your particular choice. Such efforts help you establish clear, relevant, and personalized dialogs with your customers about where the important risks lie, and what they themselves can do to help dial them down. These kinds of focused “conversations” help your policyholders reduce the perceived pain factor involved in being an insurance customer, and help you roll back your claims payments.

Advanced tools for content creation and editing make it easy to mold and deliver a wide range of content that you can quickly and cost-effectively publish in different places. Using Magnolia DXP, you can get the best messages to the right places at the best time.

The messaging that Magnolia enables insurers to provide to their customers is highly personalized, making it possible to address very specific customer groups and readily identifiable, real-world pains. This helps give customers at least a sense that their insurer is in touch with their real needs and concerns. They then tend to feel more cared for and better protected, which has big-time positive effects on customer perceptions about value over the entire duration of the insurer/policyholder relationship.

In a highly competitive market, investing in intelligent, customer-friendly ways to prevent claims from even happening can help significantly alleviate the basic trust issues that seem to riddle the insurance business.

Carefully curated data, combined with the right digital experience platform for communicating effectively with customers, make it possible to roll back the number of claims as well as their seriousness, and also to reduce premiums. This adds up to a big win/win plus for insurance companies and their customers.

It can also help to foster closer links at important, sensitive touchpoints in insurers’ relationships with their customers. For better or for worse, the interactions associated with making claims and experiencing how they get processed are precisely the interactions that get noticed, remembered, and retold far and wide for years to come. Some snafus even become urban myths that can scramble and trash an insurer’s reputation for decades to come.

An effective digital experience platform can profoundly alter claims statistics as well as market perceptions about a particular insurer. It can be an extremely effective way for an insurer to remold or reinforce its role in relation to customers, and also to stay ahead of competitors, market disrupters, and digital challengers.

Don’t let claims hold you back

Book your personal demo to find out how Magnolia can help you create unique digital experiences across all touchpoints and improve your bottom line.