4 Things Insurance Companies Struggle to Do Well

Posted by Andrew on March 23, 2020

Insurance is one of those expenses that seem burdensome up until the policyholder needs to make a claim. Whether the individual is in a car accident, experiences a loss due to flood damage, or any other covered incident, insurance becomes indispensable. However, there are many pain points for customers when it comes to their insurance providers. If insurers don’t take steps to rectify these issues, they may find their customers leaving in search of better insurance options.

The biggest areas where many insurance providers fall short include:

  1. Meeting young clients’ expectations. Millennials are more likely than other generations to shop around for a new insurance provider following a dissatisfying interaction. They expect emails or text updates about the status of their claims. They also expect to be able to access their claim information from the convenience of their phone on an app.
  2. Explaining insurance rates breakdown. Several factors affect insurance premiums. Insurance providers consider the type of car the customer drives as well as his or her age, gender, marital status, credit history, miles driven per year, and zip code before offering a rate. However, most insurers don’t explain how much weight they give to each category and this can make it difficult for insured customers to understand their premium or how to reduce it.
  3. Explaining coverage. Insurance providers know the terms of their policies inside and out. However, many insurance representatives struggle to present insurance products and packages in a way that is easy to digest for the average customer. Insurance jargon can confuse or mislead customers regarding their coverage.
  4. Processing claims correctly the first time around. Insurance companies want to resolve claims quickly just as much as the customer does, but several issues can trip them up in the process. Health insurance companies are notorious for claims processing errors. While claims processing has improved over the past decade, there are still a significant amount of denials. This leaves customers frustrated and drags out the settlement process.

The competition among insurance providers is fierce, as millennials have shown they have no qualms switching companies. One sour claim experience can result in the loss of a customer as well as any potential referrals that customer may have provided. To learn more about improving claim management, contact the experts at Actec.