Backing up their claims

Editor's note: Kristi Gale is senior marketing research analyst at Farm Bureau Financial Services, West Des Moines, Iowa.

If a person were to ask several employees in the claims department at Farm Bureau Financial Services (FBFS) about their customers' level of satisfaction, you would probably get the same answer, "Farm Bureau Financial Services provides excellent claim service to its insureds." There has always been universal internal belief that FBFS does a good job of providing claim service to its property and/or casualty insurance customers. But however justifiable, this employee pride wasn't enough proof for FBFS management. A more structured evaluation was necessary - and this is just what claims management asked of the marketing research and analysis department.

Farm Bureau's claims management approached Dan Koster, director of marketing research and analysis, and commissioned a study on property and casualty claims satisfaction. All involved were eager to find out what FBFS customers thought of the claims process. If indeed Farm Bureau's claims process produced high marks from insureds, the company would definitely want to get the word out to potential clients!

Farm Bureau Financial Services is an insurance and investment company doing business in a 15-state marketing region. In a typical year, the claims center receives approximately 72,000 calls on claims for automobile, homeowner, and farm insurance. The company processes property and casualty insurance claims in six states: Iowa, Minnesota, South Dakota, Utah, Arizona, and New Mexico. Most of the processing is conducted through its home office in West Des Moines, Iowa.

Farm Bureau had confirmed the influence of the claim experience on customer satisfaction and loyalty in past marketing research studies. FBFS management also knew that a reputation for good claim service is a major draw to attract new customers.

Several claims satisfaction research studies had been conducted in the past, but most resulted in simply an overall read of satisfaction - which provided a useful benchmark but didn't explore or quantify what drives satisfaction from a customer's point of view.

The task of managing the study fell to Kristi Gale, Farm Bureau's senior marketing research analyst. She partnered with Grapentine Inc., a marketing research firm located in Ankeny, Iowa, and Larry Constantineau, a marketing and research consultant with MarketViews, Inc., Traverse City, Mich. Together they began developing the three-stage claimant satisfaction study.

Determine issues

The first stage began with in-depth interviews conducted among claim department management and employees and FBFS claimants to determine all the issues associated with claimant satisfaction. The objective of the initial management interviews was to provide an overview of claimant needs and expectations along with standard corporate procedures that were designed to meet those needs. It also clarified management's interests and goals regarding claimant satisfaction. The employee interviews explored their perspectives on claimant satisfaction and dissatisfaction. Finally, claimants were queried about their needs and expectations, sources of satisfaction and dissatisfaction, and any problems and complaints that had arisen.

Telephone interviews were then scheduled with recent claimants (those who had had a claim in the previous six months) by the research team. Claimants from each line of business - auto, farm, and homeowner - were interviewed. The significant issues from this qualitative phase were then condensed into processes and sub-processes, and subsequently formulated into a quantitative survey.

Develop a model

The second stage consisted of a mail survey, which was used to develop a model that would help the claims department understand and identify the most important satisfaction drivers for claimants. Within the survey, customers evaluated FBFS claim service on 62 attributes that described various characteristics of company claim performance.

The quantitative study was also intended to develop a baseline measurement of Farm Bureau claimant satisfaction and to identify the levels at which claimant expectations and needs were being met. The marketing research and analysis department used the information gained from this study to provide insights and suggestions to management on how Farm Bureau Financial Services could best serve its customers in terms of claims service.

The analysis

The third stage consisted of analyzing the data. Several multivariate techniques were utilized:

  • factor analysis was conducted to determine the underlying fundamental constructs of customer satisfaction and loyalty;
  • multiple regression analysis was used to determine the relative impact of each of the constructs or dimensions on the customers' perception of the claims process in general and satisfaction with their most recent claim;
  • path analysis was used to quantify the various factors of customer loyalty;
  • discriminant analysis was conducted to validate the results.

Farm Bureau discovered several important findings. First, the results indicated the constructs that were most important to customers in a claim situation. They are (in order of importance to the customer): settlement and repair work conducted; the claims adjuster; company accessibility and communications; the role of the agent; claim service representatives (800-number); company service rates.

With this information, FBFS now has guidelines for managing claims department functions based on customer-defined drivers of satisfaction. Farm Bureau also discovered through this research that customers' satisfaction with the claims process is quite high. In fact, customers seem to have an even greater level of company loyalty and satisfaction after a claim - a significant finding.

Sharing the good news

With tangible evidence on the level of claims satisfaction, the next steps included presenting findings to claims management, the FBFS management team, claims employees, and the field force to: provoke discussions about key issues; develop specific action plans linked to key drivers of satisfaction/loyalty and establish goals for improvement in the next year; identify and develop proactive communication tools for claims employees; continue tracking customer satisfaction and loyalty with additional research.

Farm Bureau realized the research findings indicated great news for the company, but now the question became how to let the general public (i.e., prospective customers) know about FBFS's top-notch service. The answer: advertise it.

"The results of our claims satisfaction research seemed a natural fit for advertising," says Scott Shuck, FBFS vice president of marketing services. "But one obstacle we faced was how to best communicate the information from the research study. To keep them credible, we wanted the ads to have a 'realness' to them. Any company can make an advertising statement that they've got a good claims process, so we wanted to address that we truly had a reason to make such a statement - our customers are telling us so. "

Under the guidance of Nancy Doll, director of advertising and public relations, ads were developed using a customer testimonial approach. The headline in one print ad, "When is it right to claim fast, fair service? When we're not the only ones talking," was used to serve up actual customer quotes praising how FBFS handled their claims. Photos representing the customers' damages were used to help tell the story.

Other advertising focused on the quantitative research findings. Newspaper and radio ads for each multi-line state were developed and placed.

"These ads really illustrate the great work our agents, adjusters, and claims offices are doing on the front lines," says Shuck. "And they also indicate that Farm Bureau Financial Services employees are doing a great job behind the scenes to enable those folks to consistently meet and exceed our customers' expectations in a claims situation."