– July 27, 2010
Working together to create a strategic advantage through improved agent carrier relations
The relationship between claim adjusters and agents can be an adversarial one. Each side often finds itself correcting issues created by the other side. Agents may set the wrong coverage expectation for a customer, leaving the adjuster to deliver the bad news. Adjusters may get overloaded and not return phone calls in a timely manner, resulting in a complaint to the agent’s office. In the worst case scenario, adjusters and agents may badmouth each other to customers, putting customers in the middle.
Aligning incentives to help agents and adjuster work to the same goal
Adjusters and agents work for the same company and should have the same overall goals – right? Not always.
Some agents want to keep their customers (and commissions) at all costs, even if that means covering a claim that shouldn’t be covered or paying more than what is owed. Adjusters want to retain customers, too, because fewer customers means fewer claims and ultimately, fewer adjusters. However, losing a customer doesn’t result in an immediate reduction of income for an adjuster as it does for an agent. And, many companies place a stronger emphasis on claims process compliance – opening practices, estimating accuracy, etc., than on customer satisfaction. Too many inappropriately paid claims can result in an adjuster losing his or her job altogether.
Efforts can be made to better align goals and incentives such as incorporating a loss ratio component into agent bonuses and placing a stronger emphasis on customer satisfaction in adjuster measurement and compensation. These tactics help. But, due to their relative roles in the organization, some tension between adjusters and agents may be inevitable.
Use the customer’s expectation to work with agents to help the claim process
Therefore, should agents be involved in the claim process at all? Most customers understand the difference between agents and adjusters and don’t expect agents to handle their claim. But, as long as customers buy insurance through agents and pay them a commission, they will expect them to be involved, at a minimum, to explain their policy and to serve as their advocate if claim issues arise. Equipping agents to meet these expectations through training on policy coverage and access to claim status information can go a long way toward preventing or resolving potential issues. And, by meeting customer expectations, agents can help improve claim satisfaction.
Agency staff and locations can give claims an advantage with customers
In addition to meeting basic customer expectations, are there ways for agents to actually help the claim department? In my recent blog post Increasing Claim Satisfaction Doesn’t Mean Increasing Staff, I mentioned the cost and customer satisfaction benefits of enabling agents to answer claim status inquiry calls, instead of referring them to the adjuster. There are other ways to leverage agents in the claim process. Agencies are often the first place customers go when they have a claim. Having the claim reporting application at the agent’s fingertips to take a complete report and get the claim started reduces hand-offs for the customer and saves time for claims. For small claims with clear coverage, there is an opportunity for agents to settle the claim, within specific guidelines.
There are particular customers and claim types where the agency role is more critical. When a customer speaks a foreign language, especially one other than Spanish, agency staff may have capabilities the claim department doesn’t. Customers will likely have a better experience speaking in their own language directly to an agent versus going through a translation service paid for by claims. The elderly customer who needs special assistance is another example of a customer type that may benefit from agency involvement in the claim process.
The agency relationship and proximity to the customer are also important for large, individual losses and catastrophe claims. In-person empathy and “hand-holding” can be highly valued in these situations. But the agent’s proximity to the customer provides another advantage. In the era of claim centralization, where offices are closing and more work is done over the phone, agencies provide a point of presence in the community. During hurricanes, when phone lines are down and people are scattered due to evacuations, agents can take claim reports and issue payments for temporary living expenses until adjusters arrive on site.
Clearly, agencies have a role to play in the claim process. Enabling agents and their staff to perform their role efficiently with empathy and professionalism can benefit customers, agents, and the claims department.
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Agents can contribute tremendously to the claims process and we have had many great experiences with agents being proactive in helping to align the interest of all parties. That said, we have also had the “fire-ready-aim” agents that receive a call from an agitated client and only serve to exacerbate the problem. Agree with you 100% that access to claim status information or at a minimum an immediate response to agent concerns is ideal. There is no reason in today’s environment that an agent shouldn’t be able to access claims status on-line securely, view the complete history of the loss, all of the artifacts, and have instant access to the adjuster handling the loss. This allows them (or someone on their staff) to respond to their insured armed with knowledge, and to intervene in a positive way if something is being overlooked or mishandled.
In the world of trucking insurance, the emotions of the insured are transferred and then amplified through the agent to the claims personnel. Often the insured has not heard what he wants to hear from the claims adjuster, or is making assumptions which are then stated as fact to the agent.
Additionally, the agent can be of a great help in calming an adversarial insured. OR, the agent can add more fuel to the fire by stating his opinion as to how the claim should be handled. It’s a complex mix, and for every success there are equal failures.
Agents are not, for the large part, coverage experts. In some cases, when asked directly, we find they have not read the policy that they have sold. Further complicating the issue as their opinion is often the word of the insurance gods to a client who is not as sophisticated when it comes to the complexities of an insurance claim, especially a high valued cargo claim where a broker is applying pressure to settle, NOW!
Personally, I would have every agent, from the MGA ranks through the retailers spend time in the claims department to gain an understanding of how it works, what people are telling us, and how stories are manipulated to obtain a paid claim.
Handling truck claims successfully takes years of development and training, in the field and on the desk. The same can be said for the most successful of agents.