The property and casualty insurance industry is facing a big moment of change. Customers now expect the same smooth and easy digital experiences they get from companies like Amazon and Apple. This has insurance companies rushing to make claims simpler and more digital. While most focus on adding new tech like cloud services and AI, there’s another important tool being overlooked: behavioral science.
Behavioral science studies why people act the way they do. It helps insurers understand what makes policyholders happy or frustrated when filing claims. Small tweaks based on these insights can make the claims process faster, build more trust, and improve results.
One key idea is that people don’t always make logical decisions. For example, the fear of losing something keeps many stuck with old ways of filing claims, even if digital options are better. People also take mental shortcuts and are influenced by emotions and what others do. Knowing this, insurers can design better digital claims steps that feel simpler and friendlier.
To get more people to use online claims tools, companies are cutting down on confusing information and unnecessary questions. They highlight how digital claims are faster and more transparent. Features like progress bars, default options, and reminders help keep users on track. Sharing facts like “82% of policyholders settle claims faster using the app” encourages more people to try it.
Behavioral science also plays a role in stopping fraud. Insurers are asking claimants to promise honesty at the start of the process. This simple move lowers the chances of false claims. Reminding people that sophisticated checks are in place, such as AI and satellite images, makes fraud less appealing. Messaging that focuses on fairness and community helps discourage dishonest claims without upsetting honest customers.
Several insurers are already using these methods with good results. A global company created a special team to apply behavioral insights, speeding up claim handling and increasing customer happiness. Another U.S. insurer saw a nearly 2% drop in claim costs by using nudges in their digital process. One carrier boosted digital claims use by over 25% by showing social proof and success stories right away. Even fraud has dropped in places where honesty priming is used.
The push for better claims isn’t just about technology. It’s about understanding how real people think and feel when they file a claim. Companies that focus on this human side, along with smart tech, are the ones likely to win in the future.
In short, blending behavioral science with digital tools makes claims easier, cheaper, and more trustworthy. The insurance world is learning that knowing people’s behavior can be just as important as having the latest software.