The Most Important Metric in Claims

The Most Important Metric in Claims

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According to JD Power's most recent claims satisfaction study, “the most important metric in claims” is cycle time—specifically, time till customers get paid. And it just so happens that for the third year in a row, the best in the business is a Guidewire ClaimCenter customer:

An Amica claim gets paid in 11 days, which is a measurably faster process than the industry average…. Three weeks is the breaking point—you take longer than that and satisfaction tumbles tremendously, and the industry basically just barely scrapes in on average.

Now it is my privilege and pleasure to help Amica analyze and benchmark its claims performance with Guidewire Live. So the first thing I did when I saw this article was calculate metrics for Amica’s U.S. homeowners claims closed with payment in 2013, and I found that the typical time to first payment was … 11 days. (Note that we at Guidewire Live take our customers’ data confidentiality very seriously, and I would never reveal any customer’s individual performance under normal circumstances. Amica kindly gave me permission to share what is after all just a confirmation of a publicly printed story.) I also saw that Amica compares favorably to our benchmark of the equivalent homeowners claims from other U.S. insurers—as one would also expect given the JD Power results. So when does this get interesting?

Well, when customers need a claim management center like ClaimCenter and join Guidewire Live, they sometimes point out that the participants comprising the benchmark group are not numerous enough to represent “the industry.” It’s an understandable concern, and we have some standard answers:

  • Our benchmarks built from raw transactional data and updated daily are much more accurate than the stale, survey-based generalities you are getting (or not getting) now.

  • We compare relevant claims from participating insurers, not their entire book of business, and you can slice and dice those claims for yourself and the benchmark to suit your needs, with filters for catastrophes, loss causes, dates, locations, coverages, litigation, indemnity levels, etc., etc.

  • Even if the benchmark does not perchance represent the whole industry with respect to the level of a given metric, your trends in relation to the group trends are still telling and significant intelligence.

  • More customers like you are joining Guidewire Live all the time and increasing the depth of the benchmark group.

All that is true. But from time to time, we get to compare that benchmark to outside data such as the JD Power survey. And in this instance, I am proud to say that the Guidewire Live benchmark does not represent “the industry”—because the industry pays its typical claim in 21 days, and Guidewire Live customers pay theirs in 18 days. So congratulations to Amica for leading the pack, and congratulations to our joint ClaimCenter & Guidewire Live customers as a group for beating the industry by 14% on the most important metric in claims! Keep up the good work!