October 2017, London, UK
Deliver the Future of Insurance Claims
Written by Gareth Eggle for Insurance Nexus Blog
Having seen a number of really exciting innovations in the Claims space, I have taken some time to consider the potential impact of digitalisation on the claims workforce. I am also drawing on my own experience of working in Claims in the past, and also from engaging with traditionalists and innovators in the Claims arena.
One of the over-riding themes of the evolution that is InsurTech has been better engagement with the customer. I mention this, as traditionally there have only been a few points during a policy’s lifecycle that the Insurer/Broker has contact with the Client: most notably Renewal and Claim (although not to forget mid-term adjustments); and it is at Claim where the process is significantly more emotive for the customer.
In fact, insurance customers don’t really buy an insurance policy – they buy the confidence that their claim will be settled when they make it. The policy isn’t really any protection (imagine trying to stop flood waters with a few sheets of A4…), but a quality claims process can return the customer to the situation they were in before an event, quickly and painlessly. With so much effort being made to streamline processes, is rapid claims resolution the same thing as quality of service?
As ever, there is no black and white here.
Let’s think about some of the things which can be improved to the benefit of both the customer and their insurance counterparts. Notably, administration. A number of InsurTech firms have looked to develop platforms that complete all the relevant parts of a claims form automatically, for example: the app from Jolt My Car detects an accident at the point of impact (like many telematics systems), and immediately auto-completes a large proportion of the claims form, such as: location, weather, speed and direction of travel, etc. As a smartphone app it can connect you with the emergency services, and if you have scope to do so, walks you through obtaining other pertinent information whilst you’re at the scene of the accident. All of this information is then automatically sent through to the insurance company’s claims team, so that they can immediately begin the process of getting the driver back on the road. Documentation is timely, as accurate as it is likely to be, and in the hands of the right people as soon as possible.
Lemonade have boasted that they are able to settle a personal property claim within a few seconds, and through the use of advanced AI and anti-fraud technology minimise fraudulent payments, getting money in to their customer’s bank account in a matter of minutes.
Of course, the more complex issues of injury and rehabilitation cannot be so easily processed, but taking a lot of the ‘non-value-add’ elements out of a claims professional’s day should free them up to focus on the important parts of their job, i.e. looking after the insured.
I would suggest though that whilst there are some great tools available, and being developed, that can enhance the administrative side of the process and therefore potentially undermine the role of many Claims professionals, the more real threat to the Claims department is the perception of many employers. Claims is really the shop-front for an insurance company. However, it is too often seen as a back-office function. We regularly see Claims departments falling victim to efforts to rationalise workforces and increase operational efficiencies.
Also, although Claims teams have the ability to enhance the profitability of a business through achieving rapid settlement which can result in reduced fees (loss adjustors / lawyers), their perceived lack of impact on growth and business acquisition doesn’t appeal to shareholders…
Having made a number of Claims myself (like many of us), I am much more well-disposed towards renewing my insurance with the same carrier if I have been well looked after when things go wrong. Equally, I will immediately look for an alternative if I feel I have been treated unfairly.
The point I am trying to make is that the importance of effective Claims cannot be underestimated, and in fact those insurance businesses that have the best relationship with their policy holders are those which do all they can to support them in times of stress and misfortune.
I believe that investment in claims is a necessity. Up-skilling and then retaining talented and empathetic claims professionals can result in increased retention of business, and also the acquisition of new business through recommendation and referrals. On the flip-side of this, people are very happy to talk about their bad experiences, and will warn others off buying their insurance from firms they feel have tried to find a loophole so they can avoid paying out.
Gareth Eggle leads the (Re)Insurance practice at Flint Hyde, providing insight across Broking, Insurance and Reinsurance, whilst sourcing and representing senior level (Re)Insurance Professionals, throughout the UK, Continental European, Asian and American markets.
He will be joining other insurance leaders and digital innovators at the Connected Claims Europe Summit (October 24-45, London)