Automated Loss Claims to Reduce Customer Service Inquiries During Peak and Beyond.
Automating a notoriously time-consuming and complicated portion of the insurance process can significantly help address customer service inquiries. Breaking down the numbers and the opportunity shows that there is a strong business case to support this as a business priority.
We all know that reducing customer service inquiries is a big deal for retailers - it’s critical for a number of reasons all connected to the magic business tri-factor of growth, efficiency, and profitability.
Cost Savings: Customer service can be expensive. Live support—whether through phone, chat, or email—requires staffing, training, and infrastructure. By reducing the number of inquiries, retailers can save significantly on operational costs. Some estimate that a single phone call can cost as much as £5–£12 per interaction, making even a small reduction in inquiries a significant saving over time.
Customer Experience: Many inquiries stem from customer frustration—unclear product descriptions, difficulty navigating websites, or issues with orders. By reducing the need for support, retailers can improve the overall shopping experience, leading to increased satisfaction, retention, and higher chances of positive reviews and referrals. A smooth, self-service experience builds customer loyalty.
Scalability: Retailers—especially those experiencing rapid growth—must deal with increasing customer service demands. Reducing inquiries allows retailers to scale without proportionally increasing their customer service teams, keeping customer support costs manageable as they grow.
But how many retailers know that automated claims could be the simple solution to a big portion of that grief?
Challenges get compounded during peak season.
Customer service inquiries often spike during busy times like Black Friday or the holiday season. Retailers may become "desperate" during these periods to reduce inquiries so that their systems don’t buckle under the pressure. Failing to manage high inquiry volumes can result in poor customer experiences and lost sales during critical sales periods.
A mid-to-large-sized UK retailer may handle tens of thousands of orders daily during peak periods. If even 1% of these orders result in customer service inquiries due to parcel issues, that could amount to 100-1,000 inquiries per day.
Over a peak season, this could total 30,000+ inquiries related to parcel issues alone. If each inquiry takes an hour to address that's 30,000 hours! That equates to 3,750 eight-hour work days.
Lots of hours, but what does this really mean?
Let's assume that the peak period lasts for 3 months (approximately 13 weeks), which is common for the retail sector during the holiday season. A full-time staff member typically works 5 days a week.
Calculation:
Workdays per Full-Time Employee in 3 Months:
Weeks in 3 months: 13 weeks
Workdays in 3 months (assuming a 5-day workweek): 13 weeks × 5 days/week = 65 days
Total hours worked by one full-time employee in 3 months: 65 days × 8 hours/day = 520 hours
Number of Employees Required:
Total hours required: 3,750 eight-hour workdays × 8 hours/day = 30,000 hours
Number of full-time employees needed: 30,000 hours / 520 hours per employee ≈ 57.69 employees
Conclusion:
It would take approximately 58 full-time members of staff to manage 3,750 eight-hour workdays over a 3-month peak period in retail.
Where do automated claims fit?
Fact: failed deliveries cost you more than you realise.
30% - which is the conservative estimation - of customer issues are down to “where is my shipment”, or “it’s lost or damaged” calls.
What happens if we could reduce 30% of the customer service issues because we're automating the loss claims and can manage customers before they become issues?
Wait for it.
If we managed best case to take away 30%, the number of full-time staff members required to handle the remaining workload would be reduced from 58 to approximately 40 staff members.
This represents a reduction of about 18 full-time positions.
18 positions which could be redirected towards other challenges or opportunities - even innovation!
Now let’s change that from time to cost
Average annual salary per customer service representative: £25,000 (this may or may not include salary plus any benefits and overheads, so keep that in mind, too).
Calculation:
Total Cost Savings:
Number of reduced positions: 18
Annual cost per position: £25,000
Total cost savings: 18 positions × £25,000 per position = £450,000
Claims Automation for a mid-to-large-sized UK retailer claims could save a business close to half a million pounds.
In short, reducing customer service inquiries is a strategic priority for many retailers. It’s not easy to do, but the financial and operational incentives, along with the growing focus on customer experience, mean that retailers are highly motivated to reduce them.
Problem shipments are generating hidden costs that retailers and 3PLs have just been living with. We think it’s time for a change.
You have opportunities within your organisation to address growth, efficiency, and profitability. Insurance isn’t just a nice to have or for peace of mind. It’s about doing better business.
