Text or Phone? How to Optimize Policyholder Communications

A dead battery the day before a road trip. The customer calls the insurance carrier’s roadside assistance number. After an initial phone call to report the claim, the service rep gets back to the customer within minutes via text. After they agree to opt in to text communications, the service rep informs the insured that, “the technician will be there in 35 minutes.” Waiting by the car, the customer receives another text, this one from the technician who says he will arrive in five minutes. After testing the dead battery, the technician installs a new one. The result? One very happy customer ready for vacation.

This simple example illustrates the value of texting to provide better service at the “claims moment of truth.” Today’s customers want to communicate quickly and conveniently, using multiple communication channels, like phone, email and text. Customers want to decide when they want to communicate, how they want to communicate and how often they want to communicate via these different channels. For insurance carriers, this means creating an omni channel experience and choosing the right channel for the right message.

How Texting Makes Life Easier for Everyone

People have learned intuitively when it’s better to email, text or have a phone conversation. With the rise of robocalls, most people won’t answer a phone call from an unfamiliar number. But 90% of texts are read within three minutes of receiving and the average person responds to a text within 90 seconds. In fact, text response rates are 295% higher than phone call response rates.

That said, the insurance industry hasn’t always done a stellar job setting proper claims expectations or keeping customers informed throughout their claim experience. This causes unnecessary stress for both the customer and the claims staff.

Here’s a classic example: After speaking to the policyholder initially, the adjuster sets the expectation that the estimate will be finalized by day’s end Tuesday. Three days go by without a word. On Friday evening over drinks, a friend of the customer asks how things are coming with the accident. “The guy said he’d get back to me by Tuesday, but I haven’t heard a thing.” “Hmm,” says the friend, “Maybe you should talk to a lawyer. I know someone good.” The reality is the claims adjuster was juggling so much that they failed to get back to the customer with an update.

Let’s replay the scenario using texting. The customer is waiting to hear from the claims adjuster on Tuesday. But behind the scenes there is a delay in completing the appraisal. The claims adjuster texts the policyholder on Tuesday. “I’m sorry, the appraisal got delayed. I’ll have it for you Friday by end of day.” Quick, simple, informative. No need for making a phone call and leaving a voicemail that the customer may not check.

For claims staff, every day is filled with a cascading series of tasks that each create their own unique stressors. Phone calls are a big part of the day – not just calling or answering – but chasing after calls that aren’t returned, trying to reach people and get the critical information needed to determine liability or validate damages. Often, claims adjusters are working with antiquated systems, or multiple applications that don’t communicate well. All of this creates stress. Texting can alleviate some of this, freeing time for staff to focus on the claims that need critical thinking and extra attention.

Balancing Communication Modes in the Claims Process

The key to using texting – or any communications channel – is to use the method that best fits the intent, complexity and content of the message. But you also need to be aware of the customer’s preferences.

So, when does it make sense to use SMS versus other communication channels in the claim process? A good guide is based on the level of issue complexity, claim severity and the need for empathetic connection. Take a simple claim, like insured auto A hits unoccupied parked auto B where there are no injuries. Since liability is clear and there is little risk of increasing complexity or severity, most of this communication could be handled via text after the initial introductory phone call to establish a relationship. In this scenario, the insured and claimant just want to know when and how the claim will be resolved.

As an example, you can use texting to:

• Introduce yourself with your contact and claim number information. “Hi Ashley, this is Brianna Smith at ABC Insurance. Here’s your claim number.”

• Ask for and receive documentation. “Could you text me photos of the car damage today?”

• Set expectations around documentation requirements. “We’ll need to get the estimate from our direct repair shop. It should be ready by end of day tomorrow. I’ll get back to you as soon as I have it.”

• Schedule a time to talk or for an onsite visit. “I need to come to your house and inspect the roof damage. Can we do that Monday at 2 PM?”

• Offer service vendors’ contacts for restorative services. “We’ll be using Roger’s Roofing for the tarp and temporary repairs. You can call or text Roger at xxx-xxx-xxxx.”

• Reach out for simple clarifications or to follow up on documentation. “Hi, just checking in. Do you have any questions about the claims process and how we are proceeding?”

• Share good news with the policy holder. “Your rental car reservation is all set…”

• Confirm that payment has been processed. “Payment has been issued and you should receive the check within 3-5 days.”

• Provide updates on status, especially for long-tail claims. “Hi Ashley, thanks for your patience. I wanted to let you know where things are with the roof repairs.”

Now let’s change the scenario: Insured auto A runs into auto B and injures an occupant of auto B. The claimant must go to a doctor, get an MRI and have cervical spine surgery. There are some elements of this kind of claim where you could use text, but all of the substantive discussions would likely be better conducted via phone or video. There is more complexity and a greater need to connect sympathetically.

Other examples of where it may be better to use phone or video:

• Provide an overview and/or detailed explanation of the claims process.

• Demonstrate concern due to serious situation or deteriorating customer relationship.

• Discuss liability, damage and coverage issues or disputes.

• Review settlement documentation with the customer.

• Inform of initial or subsequent loss facts or damages investigations.

• Negotiate claim settlements.

• Communicate denials and their basis.

• Ask follow-up questions and have conversations where details need to be teased out.

The Bottom Line: Happier Customers, Higher Quality Outcomes, Less Stress

Texting capability is a digital strategy cornerstone for insurance carriers. It allows adjusters to get the information they need while satisfying policyholders with fast and convenient communication. Texting can also have a profound impact on the bottom line. By lowering cycle time and shortening the lifespan of the claim, carriers can create higher quality claim outcomes. Texting also lowers handling stress for claims adjusters, making it easier to check things off the “to do” list and move on to the next task.