I click on an insurer's MOTOR "Make a Claim" process that is digitally transformed and then at its HOME & CONTENTS equivalent. The outcome?
"Please fill in the online form and we'll get back to you within two working days!".
It was not the only one! Many take a day or two just to respond by phone without any action whatsoever in the meantime What must customers think when their other online engagement is immediate and responsive?
In those forty-eight hours the policy holder was unable to upload photos and video with valuable meta nor relevant documents meaning that neither AI-powered systems nor claim handlers could analyse data and make decisions.
If I have accidentally damaged my TV, broken my expensive glasses, spilt red wine over the Chinese carpet, suffered escape of water why should I wait two days for you to get back to me without even starting FNOL?
Customer defocussed rather than the promise of being focussed on the customer's needs..
At the other end of the digital transformation spectrum, The Coop insurance offer policy holders a fully digitally transformed claims process for home and contents meaning FNOL can be registered and all the evidence including photos, video, supporting invoices or valuations uploaded from the customers device of choice 24/7. Direct Line Group and its commercial arm NIG offer the same.
I decided to research more and found the Altus Digital Bar which measures UK insurers' digital maturity each year. In the US you can look at the JD Power annual surveys on customer satisfaction.
The reading is not uplifting with a minority of insurers obtaining high ratings. Maybe things have changed so I looked up 36 of the insurers rated in the Digital Bar. Only five offer customers the digital self-service ability to action FNOL 24/7 with a guided and user-friendly means to supply all the information necessary for either straight-through processing (STP) or, when necessary or asked for by the customer, a helping hand from a friendly claims handler.
A paltry 14%
To give them their due the five that have committed to digital home & contents claim management are -
- The Coop
- Direct Line Group
- More Than
Looking at the Digital Bar you will see that most transformation has happened only in the FNOL process but is it extended to validating the claims, actioning repair or replacement supply chain partners and tracking claims progress? Bluntly- No with the few exceptions above.
Source: Altus DigitalBar 6th July 2021
86% of insurers that are not digitizing workflows and processes to gather evidence, analyse potential fraud, orchestrate supply chain partners and settling claims by cash payments, repair or replacement? The facts bear that out. Insurers can proudly talk of the digital transformation of auto claims and repair network orchestration but for home and content customers the opposite is the case.
Yet these same customers are used to virtual services when it comes to buying TVs, household contents so insurers cannot leave home claims in the analogue doldrums. Otherwise they will loose out to those carriers that do transform and new full-stack insurtech competitors that start with a digital clean slate.
If I have missed any insurers from the ones I commend it is only because it is difficult to find and make a claim via their websites. I will be pleased to add any deserving insurer to the list if they let me know.
Why, when they have often transformed auto/motor claims management, have they not done the same for home and contents, commercial property and landlord insurance claims?
Is it because the time, effort and money spent on auto digital transformation has exhausted resources and people? Faced with similar expenditure and effort is home insurance claim management left in analogue limbo?
That $multi-million price tag, sometimes tens of millions and sometimes even more. The months and even years to deploy the full system. by which time it is already outdated.
If so, there are now many alternative options that often avoid any Capex at all and offer transaction and subscription licensing models that are cashflow efficient and lower cost. See these at the end of this article. These are scale-ups that have proven digital claims management with large roll-outs and not risky new start-ups.
Is it the fear of integrating another technology stack?
Claims Platform Insurtechs can point to agile and practical API architectures which mean they can be integrated with the core systems that power the motor/auto claims so insurers can use existing policy management and payments & reserving systems. So, both Claims Leaders, Central and Business Unit IT and the C-Suite can relax confident that they can fully digitalise and transform home claims without the burdens they probably experienced with motor claims transformation.
Is it a fear of lower functionality?
We all know examples of a vendor introducing a cloud-hosted variant of its claims management applications that just does not cut the mustard. There are significant gaps in the specification that limit the claims management potential.
There are now many cloud-native claims management platform vendors that offer a full spec functionality. They deliver competitive advantage and generally offer end-to-end digital claims management platforms, no-code/low code ease of customisation and innovation, and cost-effective licensing.
The end-to-end tag needs testing in some cases as they may use artistic license. They can, however, offer to integrate best-of-breed third party applications that will be required to deploy a full end-to-end platform e.g. Symbility, Exactware, Tractable, Solera/Audatex, WeatherNet, Shift, Sprout.ai, and many more.
Some platform vendors are better than others at offering integration so if you find a reluctance to engage in this connectivity beware.
Is it the fear of being locked into platforms that need updating at a high cost in money and time every few years?
It should not be as these platforms deliver low-code/no-code claims management. That means that you can train business and systems analysts customise, update processes and workflows, data sources to offer continuous improvement. All without having to pay vendor's developers and consultants.
Which partners can transform home and commercial property, contents and fixtures & fittings claims? Claims management platforms that are proven as scalable, reliable, effective and digitally delightful for customers and claims handlers. They include: -
So there is really no excuse for not transforming home and contents and commercial property claims management. And the good news is that having added these to digital motor claims you can offer the same for travel, pet, warranty, speciality- the whole spectrum of claims. Why wouldn't you if you really have the interests of customers at heart?
Why should they not get the same, consistent user experience and satisfaction across all products and services. They can.
Altus is adding Pet and Travel Claims to the DigitalBar end Aug/September. So keep an eye out for that and the existing motor insurance digital maturity ranking.
Cost of claim: The operational and processing costs of traditional insurance processes can really add up, from chasing customers for supporting documents, to fixing NIGO forms, to manual data entry. Claims costs represent almost 80% of a policyholder’s premium. The longer it takes to settle a claim, the higher the claim costs, hurting the insurer’s profitability.