🇺🇸United States

Customer Friction and Churn Caused by SIU‑Driven Claim Delays and Suspicion

2 verified sources

Definition

When legitimate claims are referred to SIU, policyholders experience intrusive questioning, documentation requests, and long delays, leading to dissatisfaction, complaints, and eventual switching to competitors. This manifests as higher churn and lost future premium revenue.

Key Findings

  • Financial Impact: Hundreds to thousands of dollars in lost lifetime value per affected customer; for large carriers, aggregate annual impact can reach tens of millions in foregone premiums
  • Frequency: Daily
  • Root Cause: Sentry explains that SIU reviews add steps—additional information requests, interviews, and extended evaluation—before claims proceed, which slows payments and can frustrate legitimate claimants.[1] Plaintiff‑side commentary notes that many soft‑tissue or questionable‑looking claims are placed under SIU investigation, triggering contentious interactions and delays that harm customer relationships.[2]

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Insurance Carriers.

Affected Stakeholders

Policyholders and claimants, Claims adjusters, SIU investigators, Customer service and retention teams, Marketing and brand management

Deep Analysis (Premium)

Financial Impact

$1,000-$10,000 aggregate per pool member due to churn from dissatisfaction. • $500-$5,000 lost lifetime value per affected reinsured policyholder who churns. • Program Administrators and their carrier partners lose profitable insureds who move their business to competitors after a bad SIU‑driven claim experience, resulting in hundreds to thousands of dollars in lost lifetime premium per account and aggregate exposure in the tens of millions annually across a large program portfolio.

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Current Workarounds

Analysts maintain separate Excel trackers by program, manually copy claim details from the admin or carrier system, and coordinate with the Program Administrator via email threads and attachments to collect documents, track responses, and document why a claim is still on hold. • Manual coordination via email chains and spreadsheets to track SIU requests and updates. • Paper-based documentation requests and phone logs in shared drives.

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

Missed and Late Identification of Fraudulent Claims Leading to Improper Paid Losses

$20–$80 per policy per year in avoidable claim costs (industry estimates that ~10% of all claim costs are fraudulent and a material portion is missed or only identified post‑payment)

Inefficient SIU Investigations Driving Excess Labor and Vendor Spend

$100,000–$1,000,000+ per year in unnecessary investigation and vendor costs for a mid‑size carrier (inferred from industry emphasis on triage to improve SIU ROI)

Poor Investigation Quality Leading to Rework, Reopened Claims, and Adverse Outcomes

Low single‑digit percent of claim costs as avoidable leakage plus incremental defense and settlement costs on disputed SIU‑handled claims (industry‑wide, fraud and anti‑fraud failures cost billions annually)

Extended Claim Cycle Times Due to Manual and Data‑Constrained SIU Reviews

Tens of dollars per referred claim in additional loss‑adjustment expense and reserve carrying cost; at scale, millions annually for large carriers with thousands of SIU referrals

SIU Investigator Time Consumed by Low‑Value Cases and Manual Tasks

Millions per year in missed or delayed fraud savings for medium‑to‑large carriers, given that organized fraud rings can drive tens of millions in losses if not aggressively pursued

Regulatory Non‑Compliance with SIU and Anti‑Fraud Requirements Leading to Fines and Corrective Actions

$10,000–$1,000,000+ per enforcement action depending on jurisdiction, plus remediation and consulting costs (range based on typical state insurance penalty structures for statutory non‑compliance)

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