In the last of our three-part series, we review thesettlement process and its impact on customer satisfaction ratingand overall claims management efficiency.

As relationships go, the one between a policyholder and his carinsurance company is not particularly high-touch. The averageperson only interacts with his carrier when purchasing or amendinga policy or when there is a claim. In the past two articles, wehave seen how adhering to an established set of best practices canexpedite the claim initiation, review and processing phases, savingboth policyholder and carrier time and mone To aoy. But in the lifeof an insurance claim, the real moment of truth is the settlementphase. It is the opportunity for the carrier to shine or fail.Since research indicates that unsatisfactory customer service isone of the few things that will prompt a policyholder to changecarriers, failure is not an option.

What Happens at this Stage and the DesirableOutcomes

There are several possible scenarios depending on the nature ofthe claim: Is the vehicle repairable or a total loss? Was there anybodily injury involved? In every instance customer satisfaction isJob #1 and the goal for each must be a quick, hassle-freeresolution with an emphasis on clear, responsive communication thatsets and then satisfies expectations.

• If the vehicle was repaired, then you want the customer to besatisfied that it was restored to pre-accident condition in atimely manner. If damage was minimal, you might also offer afast-track, direct-pay option.
• If the vehicle was a total loss, then your goal is to ensurethe customer believes he received a fair-market settlement.Offering access to a car-buying service can add value to thisinteraction and close the transaction loop.
• If there was bodily injury, then your goal is to make sure thecustomer maximizes his coverage through the use of VoluntaryProvider Networks (VPNs) that provide the most care for the policydollar limit.

What Can Go Wrong?

Any delay, disappointment, miscommunication or unmet expectationduring the settlement stage risks an unhappy customer, potentiallitigation and cost increase.

Misunderstandings about Coverage

• Is the customer aware that her policy carries a deductible anddoes she know how much out-of-pocket she will have to come up with?She may be operating on the assumption that the insurer will cover100 percent of the repair.
• Does the customer understand the per diem rental car coveragelimits in her policy? A customer who is used to driving a Lexus maybe less than thrilled with a Honda Civic rental car.
• Will the repair take longer than originally estimated? Acustomer who is expecting her car back in three days will be veryunhappy to learn it will take another week because nobody botheredto tell her a part had to be backordered.
• Was the customer less than satisfied with the quality or extentof the repair because it wasn't clearly explained when she broughtthe car in?
• Dissatisfaction with a Total LossSettlement
• People feel a genuine sense of loss when their vehicles aretotaled. They also have a sense that, after years of faithfullypaying their premiums, they are at least entitled to empathetictreatment. Failure to show empathy can lead a customer to think youjust don't care.
• Does your customer think her vehicle is worth much more thanwhat she is being offered in settlement because you failed toprovide credible third-party support for the settlementamount?
• Litigation and Liability
• Are your adjusters familiar with state medical billingregulations and do they follow them carefully and consistentlyacross all bodily injury claims? If not, you could have completelydifferent (and indefensible) settlement amounts for the same typesof claims. That level of inaccuracy and inconsistency puts you atrisk of litigation and liability.
• Cost Increases
• The more you have to negotiate, the longer a claim is open, themore costly it becomes. For example, when you have to negotiate atotal loss settlement offer, the average settlement value increasesby $843, according to J.D. Power and Associates (The Effort ofOne Touch, 2008).
• Loss of a Policyholder
• Contentious total loss claims have a negative impact oncustomer satisfaction scores. According to a 2011 J.D. Power andAssociates study, total loss claimants average 811 on a 1,000-pointsatisfaction scale – 42 points lower than scores for customerswhose vehicles were repaired.

Getting It Right

The good news is that for every potential pitfall there is anopportunity to avoid it and delight your customers in the process.Often, it only requires setting realistic expectations upfront,establishing and adhering to a consistent standard of bestpractices and proactively communicating with policyholders.Advances in technology are making that easier than ever before.

Manage Expectations

• Let your policyholders know from the start what will happenthroughout the claim process, including potential delays such asbackordered parts. Maintain communications during the process,expressing genuine empathy where appropriate. Ensure that there areproper, timely hand-offs between the members of your claimsstaff.
• Track customer satisfaction early and often. Solutions such asMitchell's AutocheX service give you the tools to resolve smallissues before they become big problems by capturing feedback fromthe start of the claim settlement process. You can establish yourown set of touch points and receive alerts so you can respondpromptly.
• Follow up after settlement to make certain the customer wassatisfied with claim handling and the repair. Surveyingpost-settlement customer satisfaction is also useful in trackingthe performance of your direct repair partners.
• Get Total Loss Right the FirstTime
• Customers are far happier when they believe their carrier hasprovided them with a fair market value offer. Solutions likeMitchell WorkCenter™ Total Loss, which are backed by a trustedthird party, use data that consumer can find by conducting theirown online research. That reassures the policyholder and buildscredibility for the insurer.
• Expedite salvage auctions and reduce cycle time with a solutionsuch as Salvage Management.

• Collect and Analyze Data
• Holistic analysis and reporting is an invaluable tool that letsyou understand performance by office and by region. Being able tolook across themes and exposures and apply what you see to industryindices provides actionable intelligence to improve operations andprocedures. For example, parts level auditing in WorkCenter can beused for subrogation opportunities by revealing which parts wereactually available at the time of estimate. Close file review showyou what opportunities exist to improve performance during theclaim process.
• Improve Payment and BillingProcesses
• Technology solutions such as Mitchell AutoExpress™ make billingmore efficient, ensuring that repair shops, medical providers andclaimants are paid fairly and in a timely manner.
• Accurately Assess Injuries
• The ability to perform first-party medical bill review is animportant component to facilitate extending customer benefits. Withthe help of solutions like Decision Point, adjusters are able tomonitor the accuracy of medical bills and expenses so thatcustomers do not reach their policy limits too quickly and are ableto obtain needed medical care.
• It costs you money and you risk miscommunication when adjusterswho are not trained negotiators handle this important process. Itis far more efficient to use technology solutions that can providenegotiation guidelines, reduce expensive back-and-forth on thephone and provide supporting third-party backup data thatdemonstrates fairness. Mitchell ClaimIQ™, for example, enablesadjusters to evaluate the various aspects of a claim with astandard framework that incorporates medical bills, generaldamages, wage loss and permanency. It also provides a negotiationchart for consistent, easy access.
• Focusing on a systematic process that guides adjusters throughthe various steps of liability assessment lets them more accuratelyidentify comparative negligence situations. The end result of moreappropriate settlements can often mean lower premiums forpolicyholders.

Leveraging an integrated set of technologies that work togetherhelps to ensure that adjusters have the needed tools to enhance theclaims settlement process for their customers. With the rightcombination of best practices, accurate proactive communicationsand technology you can facilitate claims settlement, save time andmoney and deliver the level of customer service that keepspolicyholders satisfied.