A global automotive manufacturer with a paper-based extended warranty programme was facing a major dilemma in managing the customer claim process for its dealership network. Relying on a paper-based programme also guaranteed the manufacturer had little or no visibility or opportunity for insights on its dealers’ customer journey.
Dealers were frustrated that it took days to get a claim approved on a simple repair job, leading to poor customer satisfaction ratings from the vehicle owner. The manufacturer was equally disappointed with the lack of oversight of the programme’s performance.
Marsh Affinity stepped in to conduct diagnostic analytics on the existing extended warranty programme, covering roughly 150,000 contracts and 50,000 claims. The pricing of the programme, its delivery, and claims handling were all evaluated. Based on the findings, Marsh Affinity built an embedded, digitalised insurance solution to streamline the delivery of the programme, create additional revenue, and provide access to insights on programme performance.
Digitalisation has greatly improved the customer experience for the dealers, from the initial point of purchase through the entire claims process.
Customers now opt in for the extended warranty cover in minutes from the dealer’s platform in a seamless transaction when purchasing a vehicle.
Forms are pre-filled, which has not only sped up the process, but also reduced the amount of missing or incorrect customer information. And the data gathering is secure and compliant.
By setting up a threshold for pre-approved claims, 80% are now automatically approved. This has dramatically improved the claims process; claims that once took days to close now take seconds. To prevent claims-related fraud, a digital audit check runs in the background.
The embedded insurance platform has led to a better customer experience, which in turn has increased demand for extended warranty policies. This has resulted in an uptick in customer visits for repairs and the opportunity for dealers to cross-sell additional auxiliary products and services, generating additional revenue.
But just as valuable as the efficiencies and cross-selling opportunities is the real-time data the platform provides. Granular detail on underperforming vehicle parts and specific models is now used to devise future strategies for better loss prevention. In theory, the data can alert the manufacturer to the need for a vehicle recall.
In addition, the analytics highlight which dealerships are selling the most cars — and the least — enabling best practices to be identified and rolled out across the country.
Embracing the new platform was not without some minor challenges. Marsh Affinity introduced an extensive training programme for dealers to learn how to use the digital platform and how it will simplify their work. While younger employees welcomed the new technology, older employees found the move away from a paper-based system difficult to adjust to.
To support the dealers, Marsh Affinity provided face-to-face training, how-to videos, and checklists, plus a fully auditable programme playbook that includes the system’s flows and processes.
Since introducing the embedded insurance platform, Marsh Affinity was able to give the automotive manufacturer the visibility it needed to improve the performance of the extended warranty programme and claims processing system. Since the dealers are no longer spending excessive time waiting for claims approval, they can better focus on selling cars and signing up customers to extended warranty policies.
Looking forward, the manufacturer aims to use the platform to better control losses and mitigate claims. This could include looking further at brand and parts failures and investigating instances where car repairs have exceeded what was covered.
*Please note that this case study took place in Asia.