"The phrase “gradually, then suddenly” comes from Ernest Hemingway’s 1926 novel “The Sun Also Rises,” when Mike Campbell is asked how he went bankrupt. “Two ways,” he answers. “Gradually, then suddenly.” These simple but profound words also apply to changes in the insurance claims IT industry over the last few decades, and to how today’s insurance industry leaders need to be thinking and acting to avoid the “suddenly” outcome."

  in "Insurance Thought Leadership.com" Aug 19th, 2019

Stephen points out an uncomfortable truth. For 35 years insurers have been gradually innovating and improving claims with the tempo starting to build up in 2015. He asks the question-  "Is the 'gradual' abruptly changing to 'sudden'?" 

If so many insurers are liable to be left behind by fleet footed digitally transformed insurers or new entrants to the market. Look at the trend.

1980- The heavily manual workflows combined with interminable and oft-repeated phone calls lead to stubbornly long claims journeys

1985- email begins to aid communication

1995- Direct Repair Program (DRP) appears in USA

2000- Duck Creek Technologies founded

2001- Guidewire founded

2007- Steve Jobs rocks the world with the iPhone

2009- Uber and 360Globalnet founded

2010- Smartphone mobile apps take off with a vengeance

2015- First insurtechs going live and Lemonade founded.

2019- 360Globalnet now processed over 3.6 million claims through its digital claims platform with customers across Europe, the US and Australia/New Zealand. 

Those insurers that have transformed claims have mostly done so only on one or two products- maybe a simple one like Pets and then Home & Contents. Global insurers tend to start with a large affiliate or the home market operation only to find they are constrained by incompatible core systems or the sheer costs of adding another country.   

Those that invested in claims platforms often have to customise so much is is virtually impossible to upgrade and they are stuck with an early version and cannot take advantage of new releases.

The evidence is that the gradual is changing to sudden. It is not just that first mover insurers have bitten the strategy bullet and decided to transform all products/perils and regions. They have proved the case, learnt the lessons in auto insurance and are taking the plunge with home; and vice versa.

It is the threat that Stephen Applebaum has identified-

"In terms of the “gradually” signals to which insurers must pay very close attention, the slow and steady entry by OEMs into the auto insurance and accident management process through connected car technologies requires strategic planning and responses sooner than later. In fact, all of the connected technologies—home, wearables, production facilities, buildings and smart cities—represent threats to insurers that do not understand, leverage and manage them before others do."

Ecosystems, connected technologies appear in every insurers strategy and yet the very move from cure to prevention opens the market to OEMs and integrators. Insurers must move from the core strengths of capital, compliance and risk to being technology companies. 

This puts them head-to-head with other technology companies; some OEMs, some integrators and some full-stack insurtechs.

Of course some insuretchs will be technology partners white-labelling platforms. Many of these are single product and limited geography.

The only viable technology partner in the era of sudden change  is the one whose digital claims platform is proven across all areas, perils and geographies. One platform for all insurance that is easily adopted by the various teams in Auto through Home to Pets, Travel and Speciality. That does not involve new upfront costs when adding new products and new geographies.

A platform that can integrate with the current core systems of record whether legacy or more modern Guidewire. That gives you the time to decide whether to keep the current core system as is, replace components in a time and cost-effective manner or replace entirely over time. 

More than that the claims platform must empower the business to innovate, iterate and constantly improve without having to code (A NO-CODE Claims Platform) or be dependent on the partner or your central IT. In fact, use the lingua franca of the business from American English to Welsh to respond to and anticipate customer needs.

Finally; much is spoken of a seamless and fast claims journey for the customer but much less is spoken of the team of adjusters, field investigators, fraud and PI team and the whole supply chain whether auto repairs, property drainage and subsidence contractors, vets, carpet specialists; in fact the whole wide range of people and companies inside and outside the insurer that put the customers lives and properties back in place.

What use is a fast and effective FNOL if the customer journey gets bogged down in the supply chain?

Digital claims platforms must also be communication hubs that link and choreograph all parties involved. It is this complete solution that will deliver a 10 times impact on the business fast. And to combat sudden change that is a minimum you should demand from any technology partner. 

One such partner is 360Globalnet, and then you can look at RightIndem and Snapsheet. But don't leave it too long!

The sudden change is happening now- when this become mainstream news in The Economist you know it is time to act. Read "The future of insurance is happening without insurance firms"

PS- I declare my interest and involvement with 360Globalnet