First notice of loss is one of the most important parts of the claims experience. It sets the tone for the entire process, and providing certain conveniences during FNOL allows insurers to hit on the most important KPI of the automotive claims process: ‘Ensure claimant feels more at ease during FNOL.’
While there are many potential ways to make a claimant feel more at ease during FNOL, some tactics have higher ratios of doing so than others. According to the J.D. Power Auto Claims Satisfaction Study, five things that can make a claimant feel more at ease at FNOL when met vs. not met (from least to greatest impact) include providing at least one service, avoiding placing claimants on hold, explaining coverage, explaining the claims process, and explaining the next steps.
Source: Data from 2017-2019 J.D. Power Auto Claims Satisfaction Studies
For example, a customer who is not placed on hold during the initial claim report is 1.5x more likely to feel more at ease than a customer who in placed on hold during the initial claim report. A person who has the next steps explained to them is 3.6x more likely to feel more at ease than a customer who does not have the next steps explained to them.
According to the 2019 study, when claimants feel more at ease from FNOL, they are significantly more likely to “definitely renew with their insurers” compared to claimants who do not feel more at ease from FNOL (80% vs. 51%, respectively). In addition, they have significantly higher Overall Claim Experience Satisfaction scores (918 vs. 779, respectively, on a 1,000-point scale).
It is important for insurers to provide a satisfactory first notice of loss experience. By focusing on the things that have the greatest impact, insurers can tactically strategize on how to make their claimants feel more at ease. If insurers gain momentum in meeting compliance with this top KPI, they can improve their satisfaction levels, retain their customers, and differentiate themselves from competitors.