Strategic Claims Transformation
DOCOsoft were exhibitors at this October’s TINTech Virtual London Market Claims 2020. Below, we discuss the keynotes of the Strategic Claims Transformation session.
This session on strategic claims looked at how we leverage technology to enable claims transformation. The format for this session was a panel discussion. The session began with a survey question, which asked: “Has your organization changed its views of the importance of claims technology?” The responses were quite evenly spread with 32% replying no, it was always strategically important, 34% responding slightly, there is more interest in enabling tech and 34% saying yes, it’s now on the boardroom agenda.
As the panelists noted, the majority of responses are positive in the sense that their organization is slightly more interested in enabling tech and that it’s now on the boardroom agenda. One panelist noted that Zurich wants to put customers at the centre of everything they do, and to get as close to them as they possibly can. He said: “At a group level, our aspiration is to be a technology company that sells and services insurance and wants them to have a claims experience this as painless as possible. We facilitate that through our claims commitment, but ultimately it’s achieved by a combination of technical expertise on the higher value more complex losses, a choice around communication and relationships, and then obviously technology.
“Our approach and language has changed with being around evolution, as opposed to transformation. The purpose of that has enabled us to be able to respond in a much more agile way to the opportunities which have presented themselves. To give you an example, in the space of eight weeks we built the claims portal. This was designed to handle a very large volume of low value claims after the FCA test case. What we built was a system which would enable the customer to submit their claim, relevant loss information and the supporting documentation, automatically calculate their business interruption loss, and offer an indemnity payment to a customer, which could accept and automatically transfer an indemnity payment into their bank account.
The business is now looking at ways of being able to repurpose this technology within other areas of claims. Looking at different types of losses, which will give rise to large volumes of low value claims, such as weather events. The second example is where the business harnessed technology over the course of the last six months to support its customers in communicating with it as a business in what’s referred to as a live agent – a WhatsApp text messaging and web chat service, which operates in tandem with more traditional methods of communicating.According to the panelist: “It is about giving customers more choice. When you go on to Amazon or you use the services of Uber, you get an amazing customer experience and we’ve wanted to try to replicate that within our own business.”
For Berkshire Hathaway specialty insurance, the claims process has been at the heart of our thinking and at the heart of building the business. Claims have always been at the heart of the message ever since the business was born and providing an exceptional claim services has been core to our success over those years. You can break technology challenges down very crudely into those technology improvements that customers would be very aware of and feel and those technology challenges which are perhaps part of the internal structure of the business, but which are just as important to us because they ensure that we can accelerate and streamline our processes.
Even though customers might not see everything you’re doing in terms of technology challenges, if you are in engaging with technology that’s going to assist your booking systems, internal claims registering, and policy review systems, customers inevitably will feel the benefit of that, even if it’s not quite as overt as that the portal technology that Zurich was talking about. Another panelist sees a move in the industry away from large-scale adoption programmes because they just cause problems while not necessarily providing the insurer with the customer experience that everybody wants. There is a move to smaller scale test and learn. 41% of customers, according to PwC, switch insurer to get a better, digitised approach. 61% of customers these days, prefer to monitor application status of claims online. She said: “Amazon do not see themselves as an online retailer, they see themselves as a technology company that you can buy anything from. It is now possible to check out of an Amazon grocery store using the palm of your hand waving it over effectively a barcode machine, and we aspire to be seen in the same vein as those sorts of organisations.”
Technology nowadays is much more disposable and it is cheaper. In the past we’ve all been constantly looking for that one size fits and invariably it has taken five years to start implementing it. That is impossible in today’s day and age when in five years time, the technology will surely be redundant in a way or superseded.
For Zurich, the vast majority of our involvement in this industry is in a lead capacity. London market business was hugely important for us, but actually makes up only a relatively small part of our UK footprint and certainly from a global perspective, it’s really quite small. It’s all well and good talking about implementing technology but there is absolutely a human side to it, and making sure that people are able to re-qualify so that they can up-skill themselves during the process of a transformation programme or whilst you implement certain technologies is going to be more important.
Let’s take the skateboard analogy. If you decide that today you want to have something that looks like a Ferrari, in three years time by the time you’ve built a Ferrari it will be old. Alternatively, start today by building something that you can use straight away. That looks more like a skateboard and then you put a handle on it and then you add some more wheels and then you put that motor on the back and then you decide that actually you’re going to make it a bit wider and put bigger wheels on it, and over time you slowly evolve this thing from being a skateboard, which it originated as, but into something else. But when you get there, in two, three years time you’ve actually got something, which is good to use.
The role of claims technology has changed. It’s no longer about having this big system that you spend ages putting in. That’s a given. A good claims platform should be able to orchestrate the innovation that insurance companies need to do. Innovation is not just a single point in time, it’s a continuing process of understanding the latest and greatest that’s coming along, then making use of and adapting it, and bringing that forward. Start small. Build fast, adapt.
Survey question 2 then asked all the session attendees: “ Where do you believe technology will have the greatest impact on claims processes? The winner was claims settlement with 28% of the votes, followed by triage at 27%, delegated authority/third parties 22%, FNOL 14% and adjusting 9%.
A lot of what we’ve been talking about here is about this speed. It’s about getting stuff done. It’s about starting and getting it done, it’s not about working out where we’re going to be technologically in three years time. It’s about moving in the right direction. It’s about owning everything together. Maintaining that real customer focus while we go through these complex changes within the business. Sometimes the simplest of technologies can end up being the best.
The goal is for claims to be seen as a profit centre within an insurance organisations, not as a cost centre. Yes, we’re responsible for the largest outgoings that any business or insurance company has. But fundamentally, if you do your job well within claims then receiving business in through the door is a given.
Technology needs to be implemented to support the core principles of your business and on what it is that your claims function is there to achieve. But if your claims function is there to try to get as close to the customers as possible and make the claims experience seamless, there’s no point putting in place technology solutions which ultimately save you cost, because all you’ll end up doing is creating a solution that maybe suits you as a business but it doesn’t suit your customers. It’s a completely false economy.