pwc identifies what insurers need from Insurtechs and how both can collaborate.
Another new report from SMA describes the optimal digital claims platform and why it is needed.
Claims management innovation, even when glossed up with a shiny digital FNOL front, is too often constrained by its core systems. As some say, “Putting lipstick on a pig!”. How can you tell if you are falling into this trap? When the innovation project shows any of the following characteristics identified in a 2019 report “Claims and Risk Management in a Digital World: A Next-Gen Platform” by Strategy meets Action (link in references).
Sequential Processes
Linear processes and workflow orientation based on traditional eras just do not suit today's digital savvy customers. Concurrent connection to customers and partners is required at any time- instantly.
Structured Data
Transaction-oriented data at FNOL supports admin needs but the ingestion of digital media from varied and disparate sources required unstructured data management and analytics.
One-way communication
Customers may be able to submit data and images digitally but when the follow up is slow, solely outbound and not proactive customer dissatisfaction rises geometrically
Over-reliance on voice communication
A high dependency on voice outbound and inbound telephone communications between claims handlers, customers and supply chain partners leads to delay, miscommunication, frustration and inefficiency
Practical Business Capabilities- a new lens for digital claims
Customer Focus
The key is to be able to apply a customer focus i.e. working from the customer back to the optimal claims management rather than trying to adapt an inflexible, complex and traditional claims system. Whether it is an agent, broker, policyholder, claimant, business partner or any other party the person or organisation involved has a expectation about how interactions should occur based on their experiences with Amazon, Google, Uber, Hotels.com etc.
Claims teams should be able to design every workflow, every process to meet and exceed customer expectations. As vital, they should be able to continuously improve these day by day and month by month to keep up with user experience and journey innovation across all segments.
Digital Attitude
Today’s digital world requires the ability and flexibility to capture, easily access and share all types of media such as damage photos and videos, recorded statements, forms, metadata, sensor data from any type of device at any time in any format.
It is vital to shared (redacted when necessary, this data with all participants whether supply chains, PIs, witnesses, fraud and PI teams. Activity should be driven by signals, alerts, triggers and events rather than squeezed into a pre-defined sequence.
Operational Efficiency
To create an environment of low cost, efficient operations and high customer service are typically contradictory goals. Straight-through Processing (STP) may be apparently efficient but at the cost of depriving customers of the empathy they demand. Automatic settlement of low cost/high volume claims will lead to unnecessary pay-outs.
It is not just customers involved in this quest to delight customers and collapse costs. Optimal supply chain coordination is a critical success factor. In addition to connecting, supply chain partners must have access to to provide their input collaboratively via a single digital record in order to settle claims effectively and as quickly as possible.
Speed and Flexibility
Speed of settlement is critical as there are direct correlations to claimant satisfaction, loss costs and loss adjustment costs (LAE). Speed and Loss costs + LAE are often contradictory goals so a modern claims platform must solve that conflict. The ability to adapt quickly to changing business needs is vital e.g. to new opportunities, unexpected CAT events. Total configurability by the business transforms customer satisfying capabilities of the insurer and reduces costs significantly
Data Driven Analytics and Unstructured Data Capability
Insurers were founded on the value of data and yet today 80% of an insurers data is typically inaccessible in data silos. Worse still much of it is unstructured in emails, text, attachments, metadata, voice and images. Data management capabilities to access, join and analyse these data are vital together with the tools to present insights in an actionable manner to all personas that need these. Not just past but current data in real-time and predictive analytics.
Digital Claims Functionality
- Totally client-configurable
- Business users themselves design, build and publish all processes in native language
- Iterative development for constant improvement
- Ability to “see every claim” with embedded video/imagery support
- Cloud hosted one current version for all customers
- One technology power complete insurance ecosystem
- Choreograph all parties-insurer/brokers/agents/supply chain/third parties
- Integrated with chore systems
- Future proofed with PI architecture to connect best of breed future apps
Delivers these digital capabilities for insurers
Optimal interaction and customer UI
In real-life a customer wants to interact via different devices according to her need for automatic engagement or human empathy. The switch should be seamless in real-time with no re-keying, no need for handlers to re-ask information. The progressive web app concept (PWA) is valid in that the US feels like a mobile app whilst being actually seamlessly linked to a web page running in a browser. Secure automated or handler generated email and/or SMS links proactively connect the customer , insurer and partners/third parties.
The customer enjoys an Amazon like UX in a secure claims ecosystem
Digital Content Management
Content must be integrated and accessible from a single digital record (SDR) so all parties involved have transparency with security. The SDR is the anchor that ensures everyone involved in the claim has an integral view of the claim and its status without having to log into multiple systems or screens. Unstructured, semi-structured and structured data are joined and analysed for optimal decisioning and speed of settlement.
Workflow ad Process Management
Digital claims are facilitated by embedding automation and an orchestration engine into the claims platform for intelligent routing of claims to the right individuals/teams and choreographing the interplay and communications between multiple parties and claimants.
Implementation and Deployment
In the same way Salesforce.com removed the need for purchasing hardware and software, digital claims platforms should be implemented and deployed without significant costs and on a pay-as-you-go transaction or subscription model. They should not add extra resourcing, maintenance and development requirements in over-stretched IT departments.
From start to deployment go should be a matter of months not years with the business being able to continuously iterate, improve, test and publish to forestall disruption from reinsurers and/or digital giants. Not to mention upstart full-stack insurtechs.
Future Proofing
Claims platforms cannot be limited to one insurance category, peril or geographic region. Insurers cannot be lumbered with the need for different platforms for home, motor, pet, travel speciality and commercial insurance. The same configuration tools must be able to optimise complex commercial and simple pet claims journeys. To cope with personal injury and employee benefits. Auto warranty and vehicle recall programs.
Nevertheless, no one platform will have all the functionality all the time for all categories of claims. If, for example, you need to integrate weather data, AI, payments solutions so you should via practical API architecture. You must always be able to deploy the optimal total solution for the total portfolio of insurance products and services.
Without that necessary base digital infrastructure insurers will not be able to take full advantage of ever more sophisticated technology for automated decision making and real-time solutions.
This may appear daunting and Claims Leaders may fear the challenge of getting business plans costed and authorised by a sceptical C-Suite and CEO/CFO. In reality, the measurable benefits are proven to make the business case and within three months a minimal viable product (MVP) can be deployed to prove the viability in your own unique circumstances. To help you make the business case see “Are your digital claims goals ambitious enough?”
Where will you find such digital claims platforms?
You can start with RightIndem, 360Globalnet and Snapsheet which will all integrate with older legacy core systems as well as newer ones like Guidewire.
References
You can download the original SMA Report here
The Economist The future of insurance is happening without insurance firms
McKinsey “Time for Insurers to face Digital Reality”.
McKinsey “Capturing Value from the Core”
360GN “Why moving to digital insurance is easier than you think.”
McKinsey “Digital Disruption in Insurance: Cutting through the noise” ;
BCG Attacking complexity in Insurance Products and Processes;
LexisNexis 2019 Future of Claims Study
Our report "The untapped potential within the UK Insurance market" explores the challenges and opportunities that InsurTech brings to the market. Produced as a result of research with a selection of InsurTechs, Insurers and Investors, learnings from our collaborative partnership with StartupBootcamp, and insights from other PwC and Strategy& analysis, the report explores how each player views the opportunity facing the market, what the future might look like, and the critical foundations required to bridge the gap.
