2019 has seen valuable and actionable reports published helping insurers plan and implement strategies for the digital transformation of claims.
McKinsey in “The right digital-platform strategy” published May 2019 states that platforms can boost EBIT earnings by 10% (see references). It goes on further to say “For incumbents, a platform strategy, pursued alone or cooperatively, is becoming a competitive necessity. Companies that have yet to make their move may find it increasingly difficult to catch up.”
SMA recently published “Claims and Risk Management in the Digital World: A Next-Gen Platform” and adds to McKinsey’s paper in explaining why it is essential to make this a strategic priority. SMA describes a revolutionary P&C Claims process and the technical capabilities necessary for this new approach.
Many insurers are concerned legacy systems inhibit innovation being complex, inflexible and expensive to change. An insurer really needs technology that can be implemented without having to re-engineer what is already deployed. A platform that delivers a world class online digital experience for customers and the insurer’s teams easily integrated with and utilising the core systems of record. Digital claims platforms should also help the business and central IT jump another hurdle. IT once had the luxury of time and money to plan and deploy new functionality. No more!
What once could take a year and cost $10million must now take weeks to three months and involve no capital or upfront costs. What one could take three years and up to $100million must now take months and under $1million p.a. for 150,000 claims a year.
LexisNexis in its 2019 Future of Claims Study emphasises the prime importance of “Balancing Claims Automation and Empathy”. It shows that whilst customers prefer to engage digitally with insurers they also want to communicate directly with claims handlers when necessary. 360Globalnet’s customers measure digital engagement of over 95% of customers across all generations. Digital claims platforms must augment claims handlers/adjusters with technology not replace them.
McKinsey’s “Insurance 2030-The impact of AI and the future of insurance” demonstrates how vital it is to adopt a platform that delivers - online digital “end to end” claims settlement today and future-proof the insurer so that it can adopt evolving technologies when relevant.
AI in claims is commonly considered to be a three-year project for insurers whilst they embrace the necessary master data management skills, access all the data silos vital to fuel AI and train staff to handle remaining complex issues and decisions. Your digital claims platform must allow you to add world-class AI solutions to all categories of perils and claims as they evolve.
Check that the platform you chose is“No-Code/Low Code”; in other words, the business can plan, test and deploy new functionality without the need for coders or reliance on central IT or suppliers. You can iterate and constantly improve claims processes at any time and in parallel be confident that longer term innovation is also practical.
To benchmark your own digital claims platform strategy and find a next-gen solution download the report.
Powerful platforms have given digital natives from Alibaba to Amazon global reach and towering market capitalizations. While that’s no secret, these platforms raise difficult questions for CEOs of incumbent companies pushing ahead with their own digital transformations: Should they emulate the frontrunners, join forces with them, or not play at all? Not playing may seem risky in a world where “platforms beat products.”