How to bring greater empathy to the claims process

Insurers’ responses to the devastating 2022 floods across Australia’s eastern states have been under the microscope since the parliamentary inquiry was tabled in August last year. 

The Standing Committee on Economics, which is conducting the inquiry, has heard from affected communities as well as insurers, and empathy is among the key themes to emerge throughout the proceedings. 

RACQ Group CEO David Carter told the inquiry that while the insurance industry has become better at identifying policyholders with chronic underlying vulnerabilities, more empathy is needed to support traumatised claimants. 

“It is a different type of vulnerability,” he said. “It is the uncertainty and concern and almost fear of what is going to happen, given the damage that has been incurred. We need to do more training for that specific aspect.” 

Empathy makes a difference

The 2022 floods were some of the worst in the country's history. Homes were destroyed, communities were displaced, and lives were lost. The disaster triggered 303,407 insurance claims, according to data from the Insurance Council of Australia. 

While those claims totalled almost $7.4 billion, it’s impossible to put a price on the trauma and devastation of the claimants, whose lives were turned upside down. 

Empathy is a crucial skill in claims handling. People who display empathy can acknowledge different perspectives, recognise nuances and understand the feelings of others. It fosters trust, understanding and satisfaction among claimants. It also plays a crucial role in shaping a positive — or negative — claims experience. 

Research from AI-based customer-communication service Hi Marley shows the level of empathy displayed by an insurance claims team accounts for the biggest difference between low and high customer satisfaction scores. 

ANZIIF takes up the challenge

In response to various testimonies to the parliamentary inquiry, ANZIIF is developing a new course — Empathetic Claims Management — which aims to equip claims agents and claims managers with the skills to provide empathetic and trauma-informed customer service to all claimants. 

The course will include realistic scenarios and examples of claimants, enabling learners to understand the real-life impact of claims.

Lisa Caton, ANZIIF Learning Specialist, says the course will explore the difference between sympathy and empathy, how to identify and respond to trauma, and what empathy looks, sounds, and feels like in the context of their work. 

“It aims to equip the claims agents and claims managers with skills to provide empathetic and trauma-informed customer service to all claimants, regardless of the size of the claim they're dealing with,” she says.

“We're not just talking about huge natural disasters here - it could also be a small dent in a panel of their car. 

“The process of lodging a claim can be stressful, and insurers need to be able to acknowledge that,” adds Caton. “This course will help learners to identify signs of trauma in claimants and respond appropriately with sensitivity and support.” 

The human element 

Luke Gallagher, IAG Executive General Manager, Claims, says empathy is a vital skill in managing claims. 

“The ability to listen, understand, and relate to our customers’ circumstances is critical in supporting them with their claim,” he says. 

In the case of major disasters, empathy is often best displayed face-to-face. 

“Following Ex-Tropical Cyclone Jasper and the south-east Queensland floods in December 2023, our approach focused on ensuring our assessors and partner builders were on the ground helping our customers with repairs to help rebuild their lives, homes, and businesses,” says Gallagher. 

“We had a dedicated claims support team that triaged claims and prioritised those requiring immediate assistance such as urgent make-safes, temporary accommodation, or emergency financial assistance.” 

Gallagher says all IAG frontline employees undergo vulnerability training during onboarding to give them the skills and capabilities to identify vulnerable customers and work effectively with those experiencing vulnerability. 

“This ensures any issues disclosed are treated with respect and confidentiality, and customers can be referred to additional support services if they need urgent help,” he says. 

“Our frontline staff are also taught to recognise customers experiencing vulnerability at the first point of contact, through verbal and non-verbal signs or triggers."

Recognising the signs

Once a vulnerable customer is identified, their claim is triaged into dedicated customer support teams where they will have an assigned case manager appointed to oversee their claim. 

"This allows our frontline people and partner repairers to connect and emphasise with customers that have gone through highly emotive claims such as floods and bushfires,” Gallagher says.

He adds that IAG offers customers and their family members who are experiencing vulnerability and financial hardship access to free and confidential counselling through its partner Sonder — which provides physical, medical, and mental health care from registered and clinical professionals.  

Assisting insurance customers experiencing vulnerability is a key focus of the General Insurance Code of Practice, released by the Insurance Council of Australia in 2020. 

A review of the insurance industry’s response to the 2022 floods, commissioned by the ICA and undertaken by Deloitte, shows that while insurers have invested in frameworks to support vulnerable customers, the execution of these frameworks — and the policyholder experience during the catastrophic event — lacked consistency and that it was difficult for insurers to identify all customers experiencing heightened levels of vulnerability. 

The review also found that good experiences with insurers consistently came back to the empathy displayed by the claim handler, assessor or other staff member.  

Vital customer support

Caton says showing empathy during claims management is vital to supporting all insurance customers.

“ANZIIF has a lot of learning content about vulnerable customers, but this is our first course that specifically focuses on empathy,” she says.

“It is not a light, fluffy course, because empathy is a serious issue when dealing with people's loss and livelihoods and we’ve seen that during the recent floods.”

Caton says the Empathetic Claims Management course is a resource that members can offer to their claims teams at any point of the year.

“We know members have their own internal training of how to manage claims, but we really want them to have this resource to slot in, especially when they're hiring during times of significant weather events,” she says.

“But the course is also valuable for experienced claims managers. It’s about inserting a human side into the claims process and providing some valuable learning that will support this.”

Find out more about our Empathetic Claims Management course