The Claims Experience: Where Insurance Brands Win or Lose Customer Trust

Drawing on insights from DataEQ’s UK Insurance Sentiment Index: Claims Edition, this article explores how UK insurers can transform the claims experience into a driver of trust and loyalty through proactive communication, empathy, and digital innovation

Leanne Smit – Senior Data Analyst, DataEQ 

In the intricate world of insurance, the claims process stands as the ultimate "moment of truth" for policyholders. This is where a company’s promise is tested, and the outcome can either forge lifelong loyalty or lead to instant churn. It is during these often stressful and sensitive times that the human element of insurance truly comes to the forefront. 

Consider Maria, a policyholder who, after experiencing a household flood, was met with prompt approvals and clear, transparent updates from her insurer. This efficient and supportive experience not only resolved her immediate crisis but deepened her trust, turning a stressful event into a testament to her insurer's reliability. Now, imagine David, who after a car accident, endured months of silence and repeated calls, only to find his claim denied on a technicality he felt was unfair. This experience left him feeling betrayed and unheard, eroding years of loyalty in an instant. 

Why Claims Matter More Than Ever 

Online reviews and social media play a pivotal role in shaping consumer perceptions during their decision-making process. For UK insurance providers, standing out in a competitive market requires strategies that foster positive sentiment on public platforms, thereby enhancing appeal and cultivating a trustworthy image.  

The claims experience is a crucial driver of overall customer satisfaction, retention, and referrals. It accounts for a significant portion of public conversation, comprising 8.8% of general insurance discussions and 10.9% of life and pension insurance discussions, as seen in DataEQ’s latest UK Insurance Sentiment Index: Claims Edition. Insurers who capture positive experiences during the claims process are arguably as effective in attracting new customers as those praised for an easy sign-up process, as customers seek peace of mind that their insurer will support them when needed most. This focus also aligns with Consumer Duty outcomes, ensuring insurers meet customer expectations and manage their reputation effectively.  

Dissecting the Current Industry Challenges 

Despite the critical importance of the claims process, sentiment analysis reveals persistent pain points for both general and life & pension insurers. These challenges often stem from operational inefficiencies and a perceived lack of customer centricity. In fact, slow claims processing and poor feedback regarding the status of claims were a much larger driver of customer dissatisfaction than the outcome of claims.  

• Communication Breakdown: Email communication emerged as a major source of frustration, with a Net Sentiment of -78%. Customers frequently cited slow or absent responses, repetitive or automated replies that failed to resolve issues, and a lack of follow-up after initial contact.
• Delayed Claims Processing: Turnaround time is a significant pain point. For general insurers, nearly 45% of turnaround time complaints related to the status of claims. Life & pension insurers also face substantial negativity, with a Net Sentiment of -54% for turnaround time, often due to issues with death certificates, medical records, and repeated requests for already submitted documents, leading to prolonged timelines and emotional distress. The status of claims received an extremely negative Net Sentiment of -88% for general insurers and -73% for life & pension insurers.
• Customer Service and Staff Conduct: The Net Sentiment for customer service was -25% across the industry. Common complaints highlight rude, dismissive, or unprofessional behaviour, inconsistent service levels, long wait times, difficulty reaching agents, and repeated transfers without resolution.
• Contentious Claims Outcomes: Customers frequently expressed frustration over delays in repair timelines and the quality of repairs. More critically, issues such as claims denied without valid reasons (often citing technical loopholes), feeling misled by policy terms, and payouts perceived to be below market value contribute to accusations of unethical behaviour and significant mistrust. 

Human-Centred Claims Handling 

Despite these challenges, opportunities exist to transform the claims experience into a source of positive sentiment and trust. Human skills and empathetic interactions are pivotal in navigating these often emotionally charged moments. 

• Proactive Communication as a Trust-Building Tool: Insurers who provide prompt approvals and clear, transparent updates throughout the claims process foster positive experiences. Customers respond well to staff who demonstrate a good understanding of the product, communicate clearly when explaining complex processes, and provide timely updates. Frequent, proactive updates are highly appreciated, particularly by life & pension customers. This ensures customers feel informed and supported, rather than left in uncertainty.
• Emotional Intelligence in Claims Handling: The conduct of staff significantly influences customer perception. For life insurers, staff generally meet customer expectations in this area, with customers frequently praising their compassionate approach. Key attributes of well-perceived staff conduct include compassion, patience, and respect. Customers frequently commend staff who are friendly, polite, professional, and respectful. Even when claim outcomes are not ideal, positive sentiment can be driven by clear communication, respectful interactions, and a willingness to assist. Staff who can help customers navigate complex claims more confidently and reduce the stress of the process are highly valued. By fostering a culture of empathy and responsiveness, insurers can transform potentially damaging experiences into opportunities for connection, reassuring customers that their voices are heard and valued.

How Technology Can Help — Without Replacing the Human Touch 

While human empathy remains paramount, technology can significantly enhance the claims journey by streamlining processes and providing transparent communication. Digital claims processes are becoming increasingly popular due to their generally user-friendly design. When implemented effectively, digital tools can provide efficient, well-structured systems and quick access to policy details and claims tracking. 

However, current digital channels still present significant pain points. Customers frequently report technical problems like login failures, unresponsive or slow websites, confusing navigation, difficulty locating important documents, and occasional errors in processing claims or payments. Furthermore, issues such as slow response times and a lack of real-time updates continue to affect customer satisfaction. 

To truly support the human touch, digital channels must be reliable and intuitive. By investing in robust digital platforms, insurers can provide: 

• Automated Updates: Proactive and timely updates on claim status, ensuring customers feel informed without needing to chase insurers.
• Streamlined Digital Journeys: User-friendly interfaces with clear instructions and efficient online transactions, making it easier for customers to submit claims and access information.
• Accessible Digital Support: Good web chat support can be a convenient alternative to phone support, providing quick and clear answers to customer queries.

By ensuring seamless and reliable digital interactions, technology can alleviate customer frustration, allowing human agents to focus on the more complex, emotionally sensitive aspects of claims handling. 

Closing the Loop — From Complaint to Competitive Advantage 

Best practices derived from customer feedback highlight several key areas for improvement. These include efficient processing, regular and transparent updates, compassionate staff, and a reduction in unnecessary bureaucracy and documentation requests that add to customer distress.

Insurers should leverage unsolicited feedback to identify pain points and continuously invite reviews throughout the customer journey, including post-claims interactions, to portray a balanced view of customer experiences.

Looking Ahead — The Future of Claims Excellence 

The most successful insurers understand that feedback is not a setback, but a roadmap to improvement. By listening, adapting, and acting transparently, insurers can transform challenging moments into opportunities to strengthen trust.

The future of claims excellence lies in blending human empathy with technological innovation. As digital processes continue to gain traction, the industry must prioritise streamlining these journeys, enhancing communication, and reducing administrative hurdles. The goal is not merely to process claims, but to deliver a seamless, supportive experience that reinforces the insurer's brand promise at every touchpoint.

This continuous evolution, driven by active engagement with customer feedback, will cultivate a more authentic brand image. Insurers that proactively adapt and focus on empathetic, efficient claims handling may stand out in an increasingly competitive market, paving the way for lasting loyalty.

Ultimately, each claim represents more than a transaction — it is a defining moment that reveals whether an insurer can truly be trusted. By addressing persistent pain points and committing to transparency, responsiveness, and genuine care, insurers can turn moments of vulnerability into moments of validation. This approach not only improves satisfaction but also strengthens retention, building a foundation of enduring trust and loyalty in the digital age.