Insurers Face a Rough Season Ahead for Winter Claims
While winter may seem far off, insurers may want to think about the upcoming winter months. With the U.S. seeing more severe weather events, like the Texas Freeze in 2021, there’s a heightened risk for property damage, traffic accidents, and other weather-related hazards, and it’s up to companies to prepare for a rough season ahead for winter claims. To minimize insured losses, companies need to supply the right customer education, making sure that policyholders understand their coverage and ways to prevent damage from occurring. They also must be prepared to handle more complex claims, lengthier processing times, and a dip in customer satisfaction if policyholders don’t get prompt and effective service.
Winter Storm Season Proves Challenging as Severity Increases
The winter storm season in the U.S. typically runs from October to March and presents a unique set of challenges for insurers. Freezing temperatures and snowy road conditions increase the risk of weather-related traffic accidents. In fact, according to the U.S. Department of Transportation and Highways, almost 25% of all weather-related accidents in the U.S. happen due to snowy, slushy, or icy roads. This could be unwelcome news for most drivers as over 70% of America’s roads are in snowy regions.
Winter storms also have the potential to cause a wide range of property damage. Roof failure caused by snow or ice commonly spikes during winter months. Also, freezing temperatures can cause frozen and burst pipes, which can lead to extensive water damage if not properly addressed. House fires are another common peril in the winter as people use more heating and lighting systems than usual when battling cold temperatures.
These perils cannot be underestimated and they’re only getting worse. The unforgettable ‘Texas Freeze’ of 2021, one of the worst winter weather events in recent history, led to $15 billion in insured damages, and 2022 was the second highest year on record for winter storm-related losses. Experts estimate that severe weather events have caused $121.4 billion in U.S. property damage over the past 5 years, which averages out to around $940 per U.S. household.
That’s why it's imperative that insurers take immediate steps to prepare themselves for a busy winter claims season, to ensure they can provide excellent customer service during a hectic time, but also to prevent losses through proactive measures.
U.S. Insurers Prepare for a Busy Winter Claims Season
With increasingly severe weather events predicted, U.S. insurers are getting ready for the influx of property damage and auto insurance claims. Many in the industry are now moving beyond damage reimbursement towards claims prevention, which may include recommending preventative actions, such as inspecting a roof for any damaged or missing shingles and replacing them if needed.
In fact, a Bain & Company survey has shown that over 50% of Americans have expressed interest in learning more about ways to reduce their risk. By educating customers on how to identify potential risks before they occur, the hope is that insurers can reduce company losses from severe weather events and provide better customer service during this period.
Insurers are also investing in customer service teams and training ahead of the winter season. The goal is to ensure that customer care agents can handle a higher volume of calls with ease, while still providing a quality experience. To do this, U.S. insurers must often hire additional agents or equip existing ones with specialized training focused on claims adjudication during extreme weather conditions.
The Special Challenges During Winter Months
Winter months often lead to more complex and challenging claims. The additional paperwork and longer processing times make it difficult to manage a high volume, especially during a season where weather-related losses are more common.
Claims adjudicators may have difficulty assessing the damage caused by winter weather due to limited visibility from snow or ice buildup on roofs and other structures. Furthermore, policyholders may need to provide added evidence to prove that their property was properly maintained for an insurer to accept a claim.
Staffing shortages due to extreme temperatures and poor road conditions can also be problematic, making it difficult for both in-house employees and on-site adjusters to get to work. This can create delays in the claims process as well as cause customer satisfaction issues if response times aren't met. As such, insurers must be prepared for the unique challenges of winter claims season to ensure their customers receive the best possible service.
The right CX strategy also goes a long way in countering one of the industry’s most problematic challenges - rising levels of consumer mistrust. According to a recent IBM report, 42% of insurance customers don’t fully trust their insurer, and it may have something to do with the fact that 60% of U.S. insurers admit to not having a CX strategy in place.
In an increasingly saturated market with many different insurance products and options, it’s more imperative than ever to deliver the best customer interactions, and the right CX partner can help you provide fast and effective services during the busy winter period.
Managing Risk Through Policyholder Education
As many insurers are discovering, the best way to manage risk and minimize the amount of winter claims is to ensure that policyholders are adequately prepared for the increased risk of property damage. For instance, insurers could launch education and awareness campaigns to inform customers of the risks associated with winter weather, while using data-driven analytics to give their policyholders personalized recommendations about preventative measures.
To encourage customers to act on these recommendations, insurers could offer discounts on premiums or other rewards for taking preventive steps, such as installing a dashboard camera in a vehicle or insulating outdoor pipes prior to winter.
Supplying up-to-date information and alerts about incoming winter storms can also help prevent loss, but this also means digitizing some of your customer journey, so that customers can automatically receive text or email alerts.
In addition to educating policyholders on their coverage, insurers should also supply information on what their policy excludes, such as flooding or hail damage, to avoid the risk of customer dissatisfaction. Many claims become complex and difficult to resolve, and often lead to customer retention issues, when expectations are not met. For instance, a recent survey showed that 56% of homeowners believe their policy covers flood damage, even though many standard policies do not, and only 4% of homeowners have the necessary add-on of flood insurance. Unfortunately, many customers discover this fact after the damage has already occurred.
For insurers to keep the loyalty of their customers and potentially upsell additional insurance products, it’s vital to provide excellent customer support during the claims process, and this involves thoroughly educating policyholders and ensuring they have adequate coverage ahead of winter storm season.
The Benefits of Choosing itel as Your CX Partner
Choosing itel as your CX partner allows you to benefit from an unparalleled level of support and technology. It will allow you access to a skilled team of experts who understand your needs during this hectic period.
We can ensure smooth claims processing while providing quality customer service throughout the winter season. itel's work-at-home platform gives you access to top talent across the U.S. Our pool of skilled, hand-picked licensed Property & Casualty agents, as well as non-licensed customer service agents, can augment existing support teams, offering Voice, Email and Chat solutions that ensure that customers receive 24/7 care when they need it most.
Our advanced data reporting and analytics can help you identify new claim types and claim frequency, so you can identify trends and proactively address them before they become issues. Additionally, our Data Science & Innovation team can help you digitize some of your customer journey to speed up claims processing times, while our specialized team of highly trained insurance agents can cross-sell and upsell at strategic touch points.
With itel as your CX partner, we can make sure that policyholders know about their coverage, are adequately insured, and are aware of how to minimize risk by supporting education initiatives. So, this winter season, no one is left out in the cold.
Stay ahead of the winter claim curve and manage a busy season with increased confidence. Contact Us.