Our customers are rational beings. They reach the best decisions for themselves as long as they have the right information. At least, that's what we in the insurance and other industries tend to assume in our dealings with them. But what about the psychological and social factors involved in reaching a decision?
Behavioural science suggests that in fact humans are very much influenced by the context in which they make decisions. Rather than relying on the hard facts, we all like to use rules of thumb or cues from our environment to help us decide.
Using behavioural insights in claims handling
Can claims management benefit from behavioural science? Today, correspondence in life or disability claims handling is notoriously dry, formal and full of complex specialist information. This is hardly surprising – after all, it's all about sharing the facts of a given claim among treating doctors, medical specialists, claims assessors, employers and many others. Behavioural considerations have clearly taken a back seat in the claims management process so far. But many insurers today are keen to change this in the hope of improving responsiveness, take-up and cooperation and, ultimately, customer satisfaction.
To find out how behavioural aspects can be used to this effect, Swiss Re's Behavioural Research unit ran more than 100 trials in the insurance industry. Their findings suggest that applying behavioural insights effectively strengthens our focus on the customer and improves the claims management process with the various players involved.
Are professionals more rational than others?
Take the doctors and expert professionals we work with, for example. With their educational background and the nature of their work, you would expect them to be 'super-rational' in their opinions and quite immune to any given context. But behavioural science suggests that they too are influenced by behavioural biases, just like anyone else.
This has been confirmed with trials in a healthcare setting, where the aim was to improve the quality of the treatment the doctors provide and to increase their adherence to medical protocols. Behavioural measures in this case are based on the assumption that most professionals have a strong positive self-image that they are keen to maintain. So what we can do here is highlight a doctor's performance compared with peers, or point out that our efforts to support their patient with their insurance claim are well aligned with the doctor's role.
Challenges in the claims environment
But before we get anywhere near implementing a successful behavioural economics approach, we need to tackle a string of challenges in today's claims environment. These include the need to integrate multiple legacy claims systems, the complex interactions among the many stakeholders supporting customers with their claims and the industry's slow uptake of technology. Would you believe that in this digital age, many insurers are still using paper claim forms and interacting with doctors via fax!
We obviously need to take these factors into account when designing alternative means of correspondence or measuring and analysing results. Still, this much is certain: even small adjustments to claims processes using behavioural insights will boost both claims performance and the customer experience.
We can apply findings from behavioural science to improve the claims journey in many areas, from reducing the time it takes to pay valid claims to improving return-to-work rates. If you're interested in collaborating with Swiss Re's Behavioural Research unit, please get in touch.
About the author:
Nick Mingo is a Claims Rehabilitation Specialist based in Sydney, Australia with extensive experience working in occupational rehabilitation and claims in Australia and the UK. For the past three years, Nick has been working on applying behavioural insights within the field of claims management. Nick holds a master's degree in behavioural science as well as degrees in psychology and exercise science.
Category: Funding longer lives