Claim frustrations… WHAT’S THE TRICK?
Financial institutions must effectively manage customer claim complaints, to ensure consumer protection through the implementation of Treating Customers Fairly (TCF), a regulatory and supervisory approach that focuses on delivering specific fairness outcomes to customers.
Regulated entities are responsible for demonstrating their adherence to TCF throughout the entire product life cycle, including product design, promotion, advice, servicing, and handling of complaints and claims.
Complaints aligned with TCF outcomes
The Annual Report for the Ombudsman for Long-Term Insurance (OLTI) and Ombudsman for Short-term Insurance (OSTI) provides insights into the types of complaints aligned with the TCF outcomes, outlined in the Policy holder Protection Rules (PPRs).
In the non-life insurance segment, motor vehicle insurance complaints in 2022 predominantly revolved around claims rejections, due to policy exclusions, specifically the prevention of loss or lack of due care exclusion.
Similarly, buildings and homeowners’ insurance complaints were primarily related to claims being rejected based on policy exclusions, gradual deterioration, lack of maintenance, or wear and tear.
Empathetic and effective commu- nication
Something as simple as clear and accurate information regarding the coverage or terms of a policy assures that claimants have less claim frustrations. This includes explaining the claim process, providing updates on the status of the claim, and addressing any questions or concerns promptly. Transparent communication by an intermediary and managing the claim- ants’ expectations helps to avoid uncer-tainty and reduces frustration caused by a lack of information.
Dealing with insurance claim frustrations can be challenging. Being empathetic and practicing effective communication can significantly alleviate insurance claim frustrations in several ways. Empathy involves understanding and acknowledging the emotions and experiences of others. When insurance claimants feel heard and validated, their frustrations and concerns are addressed, which helps in reducing their anxiety and stress levels.
Empathetic communication conveys that their concerns are important and that their experiences are recognised.
Effective communication coupled with empathy helps build trust between the insurance provider, the intermediary, and the claimant. Trust is crucial in the insurance claim process as claimants need to have confidence that their claims will be handled fairly and efficiently. By demonstrating empathy and open communication, insurance providers can establish a foundation of trust, leading to a more positive experience for the claimants.
By actively listening and empathising with the claimant’s situation, insurance representatives can provide personalised support, address any hurdles, and guide claimants through the claims process more effectively.
A combination of factors
However, while being empathetic and practicing effective communication are essential steps in alleviating insurance claim frustrations, they may not be the sole factors in every situation. There are other elements that can contribute to a positive claims experience. Insurers should strive to streamline their procedures, minimise bureaucracy, and handle claims in a timely manner. Insurers should have well-defined and transparent procedures for assessing claims, ensuring that decisions are made based on accurate information and in line with the policy terms. Consistency and fairness also help build trust and alleviate frustrations.
To prevent misunderstandings, insurance providers should ensure that policy documents are written in clear and accessible language. This is where the intermediary and insurance representatives play a pivotal role. When insurance representatives and intermediaries are well-trained and knowledgeable about the claims process and product terms, they can supply the necessary support and expertise by providing accurate information, navigating complex situations with confidence.
Insurers can also leverage technology and self-service options to empower claimants and provide more convenience. User-friendly online portals or mobile apps that allow claimants to submit claims, track their progress, and access relevant information can significantly reduce frustrations. However, it’s important to ensure that these technologies are accompanied by clear instructions and support channels.
While empathy and effective communication are powerful tools in mitigating insurance claim frustrations, addressing these additional factors can further enhance the overall claims experience. By focusing on a combination of factors including efficient processes, clear policy terms, knowledgeable intermediaries and representatives, public education, technology-enabled solutions, and fair assessments, insurance providers can significantly reduce frustrations and improve customer satisfaction.
Marike van Niekerk Manager – Legal, Marketing and Communications and Compliance Officer MUA