Extreme weather events are becoming more frequent. For insurers, this means that a surge in claims is more likely. With current hiring challenges, it’s more important than ever to have a “Plan C” ready and waiting.
Natural Disasters Are Becoming More Frequent – And More Costly
In 2020, the U.S. experienced 22 weather and climate disasters that resulted in at least $1 billion in losses, according to NOAA. That was a record. It was also a record-breaking year for tropical cyclones, with 30 named storms, and a record-breaking year for wildfires.
It would be nice to assume that 2020 was an anomaly, but the reality is that natural disasters appear to be on the rise. NOAA says that the U.S. experienced an average of seven billion-dollar events between 1980 and 2020, an average of 13.5 between 2011 and 2020, and an average of 16.2 between 2016 and 2020. That’s a startling increase.
Now Property Casualty 360 is warning that a La Niña weather pattern could exacerbate drought conditions in California, and that could make wildfires worse. The weather pattern could also result in more snow and rain in other parts of the country.
A Surge in Claims Can Put the Squeeze on Insurers
The Insurance Journal says that more than 456,500 insurance claims were filed in Texas after the winter storm that took place in February 2021.
Claims are typically isolated events that come in one at a time. When a widespread weather event occurs, however, hundreds or even thousands of claims can occur all at once. This high volume of claims will strain the insurer’s resources – but don’t expect the policyholder to be understanding.
HubSpot says that 33% of consumers rank having to wait on hold as the most frustrating aspect of getting customer service, and another 19% rank slow response times as the top frustration.
People hate waiting. When they’re dealing with a natural disaster, they expect their insurer to be there for them.
Poor Customer Service Can Lead to Customer Churn
Accenture found that 41% of customers who have filed an insurance claim switch insurers in the next 12 months, while only 22% of policyholders who have not filed a claim decide to switch. These numbers show that customers who have filed an insurance claim are nearly twice as likely to switch insurers.
Even in the best of times, retaining a customer after a claim is a challenge. If policyholders are dealing with long wait times, slow responses, and poor customer service, the likelihood that they’ll switch can only increase.
“Plan C” – The Premier Choice
Don’t let a surge in claims contribute to a surge in customer churn. Put your “Plan C” in place with Covenir.
Our claims team answers the phone and resolves questions without runaround, making your policyholders feel heard and understood. We are the team that will enhance your customers’ journey.
Here are just a few of the many advantages of partnering with Covenir:
- Available 24/7/365 for FNOL receipt and claim support
- Expert, empathetic claims services for all types of personal and commercial insurance lines, with deep expertise in auto and homeowners claims
- Custom, tailored services to exactly meet your needs
- Extensive industry experience – all onshore
- Available to extend your team during busy times, after hours or for catastrophe response
- Flexible, collaborative test and learn approach
- Able to support 175 languages
Contact us to put your “Plan C” in place before the next claim surge.