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Experience is critical to customer satisfaction and retention, but even more crucial is balancing satisfaction with cost-effectiveness.

Insurers’ ability to process claims effectively has never been more important to their financial results and customer experience. Look at most any carrier’s website and you’ll see lots of language touting their fast, fair, and friendly claims-processing practices and customer satisfaction statistics.

But claims is a function that relies heavily on the skills of individual claims adjusters and their demeanor with the claimant. And while the goal is to offer a fair settlement and pay the appropriate amount, carriers also need to minimize leakage and fraud. Delivering that balance in cost-effective manner-keeping both external-loss costs, such as attorney and expert witness fees, and internal-operating expenses low-can prove difficult without solid technical support, as manual processes lead to increased errors, missed steps, and cost much more to deliver than automated processes.

When asked to rate their own technology-enabled claims capabilities, many insurers are still sharply critical. Almost a quarter of CIOs surveyed in a recent Novarica study think their claims technology capability is poor or very poor. That doesn’t mean that their claims delivery is poor, but it does mean that it is very costly for carriers to consistently deliver a high-quality experience. And when a high level of customer service is a necessary differentiator to drive customer retention, the challenge becomes even more taxing.

Read the full article here.