When it's time to pay claims, agents don't overlook mediocre performance by insurance companies. Fortunately, insurers generally meet their agents' high standards. Good alignment between high claims-handling expectations and better-than-average execution was documented by the 2009 PIA Company Performance Survey. This article, second in a series, will look at results for the survey's performance category titled "Claims."

Company scores. Insurance agents rate their companies high on both items in the survey's "Claims" category. For "pays claims promptly," companies scored an average of 7.9 (on a 10-point scale), well above the survey's overall average score (7.3). This was the second-highest score of any performance item. "Adjusts claims fairly," at 7.8, scored fourth-highest (of 20 items total).

Agents' expectations include fair interpretation of policy provisions; adequate monetary compensation for loss; speedy contact with insureds; expeditious resolution; and good communication among all parties, keeping the agent in the loop throughout the process. Some companies are firing on all cylinders, getting praise like this:

"Claims are always fair and fast and easy to follow."

Benchmark "importance" rankings. A preliminary study, the PIA Company Benchmark Survey, was done to help select 2009 performance items. Agents ranked the importance of 35 items when evaluating a company relationship. Nothing proved more important to agents than claims. "Adjusts claims fairly" ranked first and "Pays claims promptly" ranked second, out of all 35 items considered.

Agent comments. PIA sorted over 6,000 agent comments from the 2009 Company Performance Survey, according to 15 subject areas. Comments on claims-handling made up just 3 percent of the total.

Comments were prompted to name a company's "main strength" and an area for improvement. The 160 comments dealing with claims broke pretty evenly between the two categories: 51 percent picked some facet of claims-handling as a given company's "main strength," while 49 percent recommended an improvement related to claims.

Between personal-lines units and commercial, a striking difference showed up. Claims comments for personal lines ran 80/20 toward the "main strength" side. For commercial lines, the split was closer (44/55) and slightly negative.

What agents say. Agents definitely hear from their customers about good or bad experiences with claims. ("Had many kudos on their claims service." "We've had too many complaints and problems with claims.") This may be one reason agents use glowing terms for good performance ("White glove treatment with claims." "Their claims handling is fantastic.")

Agents' language reflects indignation when they think companies welsh on coverage ("Denying claims when a clear obligation exists to the policyholder." "Always extremely quick to deny claims and never want to be liable for anything.")

Inadequate payment can anger clients and agents to the point where it may backfire on the company ("Too stingy on settlement [of] claims-complaints from insureds." "Adjusters are too tight and are often in conflict with insureds. I find it is necessary to recommend a public adjuster for fair settlement.")

At a time when customers may be frantic with anxiety, responsive communication is key to projecting empathy. The company gets only one chance to make a good first impression. ("Claims hotline needs to be 24/7, not an 'answering service' after hours/weekends." "Customers are often not called after first report and never get call-backs. Reps are often rude to customers as well as our agency staff.")

Agents and clients really value swift action. ("Very fast on claims-had many customers say they were out there the day it was reported.") Once underway, the claims process should be smooth-not a hassle. ("Don't make claims a constant negotiation." "Nit-picks everything.")

Agents don't necessarily want to get directly involved ("Good claims handling without agent involvement.") But, they definitely need to be kept informed ("Improve claim department service & communication." "Claims-seems to leave agent and insureds in the dark. Insureds complain they don't hear from claims representative enough.")

Technology definitely can play a role here. ("Claim department needs to be more informative [and] put more claim info on their Web site." "[Improve] access to online claims information to agents.")

Analysis. Agents sell an intangible, a promise that, when the chips are down, the client will be taken care of. Agents see delivery on this promise as the No. 1 job that their carriers must do right. Comments suggest that agent satisfaction is higher for personal lines than commercial.

A poorly handled claim, a dissatisfied client, not only presents a retention risk but also a reputational risk. How many people will hear the client's story? Conversely, how many prospective clients might be impressed by their friends' and colleagues' reports of "white glove treatment"?

Everyone looks bad if agents have to confess they don't know, can't find out, what's going on. It's clear from agents' comments that good communication plays as central a role as speed and fair pay-outs.

In short, an agent's whole reputation rests on the performance of a third party-the company-when it's time to live up to the contract. An agent's hand-holding can go only so far; many aspects of the claims process remain largely beyond the agency's control.

Because agents are so likely to hear customers' strongest feedback, both positive and negative, in this one area, companies' execution is of the highest priority to their agents. It's likely to play a definite role in agents' placement decisions.-Kiehl