New Ways of Working and Managing Claims in the Digital Age
The latest TINtech London Market Conference held on the 6th February certainly provided plenty of food for thought for claims practitioners. One of the highlights as far DOCOsoft was concerned was the presentation by Alan Burtonshaw Group Head of Insurance Claims Aspen Insurance Holdings Limited who chose the topic New Ways of Working and Managing Claims in the Digital Age.
The questions he chose to explore focused on what technologies are out there, where do they impact and focal points to improvement in claims through technology? He also posed the question: what are barriers to technological progress in Insurance?
Process and practice barely changed in several hundred years, said Burtonshaw, particularly in the London market. A new dawn has appeared with computers. Telephones and the Internet have played their part in improving customer experiences in personal lines claims management.
Some efforts have been made to evolve software which can evaluate claims cost against certain attributes of personal injury but the London market has still a lot to do, which will certainly be a view shared by many in this market. As Burtonshaw says, much of London’s technology has not gone beyond the basic messaging (ECF etc.) which 30 years ago looked revolutionary.
Increasing Opportunities
The presentation cited a McKinsey’s report, which estimated that technologies could automate 45 per cent of the activities people perform across industry as a whole, while about 60 per cent of all occupations could see 30 per cent or more of their constituent activities automated.
Out of 20 industry groups, insurance is positioned around mid-table in the industries most suited to automation and robotics. Interestingly it is estimated that 23% of ’Expert’ activities are automatable and 34% of data processing.
That has implications for 2018, of course, and we can see all around us that other industries are embracing innovative technology to transform their businesses. It seems that increased customer expectations of insurance technology makes off-shoring a practical cost saving possibility while consistency and process uniformity makes for lower costs, can increase profit and offer competitive advantage.
That takes care of the efficiencies side of things but added value opportunities will also be derived from increased focus on internal business critical processes underpinned by a high value claims strategy. Burtonshaw believes that improving client experience and service will result in claims handling rising in importance but that is not all.
Data mining and analytics that is driven by more granular claims information promises greater understanding of loss trends and business profitability, which is an avenue being explored by CEO and C-suite leaders across industries. Change is certainly not limited to cheaper processes; the big prizes out there include Artificial Intelligence, web based solutions and portals, robotics and image recognition, the long overdue appearance of the paperless office and the prospect of linking up claims with the ‘internet of things.’
We have also seen new application for emerging technology such as drones and satellites to be investigated, the Internet and networking – linking up with MGA’s/ Cover holders (and reducing costs), real time video link with end to end tie ups in the service chain e.g. motor repairs and A.I. around claim values and/or medical diagnostics.
Market solutions tend to move at the speed of the slowest participant so there is a perception that the market that it could be like turkeys voting for Christmas so it requires a cultural shift, particularly when it comes to electronic placing. There remains a lack of investment and legacy systems challenges to overcome within the existing market structure.
Burtonshaw asks, can we overcome the tradition of ‘done to the claims community’ rather than ‘driven by it’ question. There is a falling delta between benefit and costs as wages fall in relative terms. There are a number of key questions to consider.
Are we missing keys areas of consideration? Are there left field possibilities to change the London market’s competitive profile through technology (think Direct Line circa 1985)? What types of companies/technologies will investors and insurers look to get behind in 2018 and beyond? Are technology and virtual resource networks an answer to overseas licencing barriers? What impact will Brexit have in this space? What does the London market claims ‘Target Operating Model’ for 2028 look like?
Lastly, and this is the million dollar question, will reinsurers continue to play as significant role in InsurTech investment this year as previous ones and what long term implications does that have? Will artificial Intelligence ever be an acceptable adjudicator in the claims process? All serious food for thought in 2018!