The insurance industry has been slow to react to the technological revolution and the need to integrate cutting-edge technology mainly because it has not significantly impacted their profitability. Ever-changing customer demands in a rapidly increasing technology-centric world means that enhanced service delivery capabilities are vital to creating an agile organization that can nimbly pivot in the face of continuous change and uncertainty. Even before the COVID-19 pandemic, customers were leaning towards technology-focused lives, where the end-to-end customer experience plays an important role in shaping their decisions.
Traditionally, insurance companies operated into several operating verticals: Digital claims, product and underwriting, finance and investment. Complicating the property and casualty insurance segments even more was the further division into property and liability, personal auto and home, commercial auto, specialty lines and workers compensation. Being trapped in these vertical silos meant that it was a chaotic, data-intensive and disjointed storage architecture and systems. The answer became clear over time. Only enterprise-wide digital transformation strategies would substantiate results. A few companies that managed to make the jump and established themselves as market differentiators.
Todays customers are heavily focused on building relationships with their insurance carriers and look for policies that are catered to their needs. A claims process transformation will ensure a smooth linkage between customer representatives and customers in terms of communication and respinse time.
Why you should be preparing for the digital claim of the future
“Alternative providers are often at the forefront of the latest technological developments, such as artificial intelligence and process automation, putting them in a unique position to implement this technology and enhance the customer experience in a number of ways,” reports GlobalData in its State of the Insurance Industry report. Many alternate providers, mainly Insurtech startups, capitalize on customer relationship management as a key differentiator,
Insurers will require the right end-to-end process operation model reinforced with key capabilities on order to build a leaner, smarter claims operation. Some of these capabilities include:
- Automated processes that eliminate straightforward and repetitive tasks:
By reducing the number of manual steps, your claims adjusters can focus more on decision making rather than information input. Integrating systems like Duck Creek and Guidewire equips insurers with the right tools and technology to streamline and rapidly manage claims.
- Greater focus on insight-driven adjusting skills and a reduction in low-level claim handlers:
With the integration of a robust claims solution and a content services platform,digital claims services of insurance companies will change their focus to analytical-driven abilities and also hire more digital security specialists to safeguard their customers privacy and data.
- Easy access of a customer’s data and claims portfolio
One of the key issues in adjusting a claim accurately is that the claims adjuster should have all the relevant information that pertains to the incident. Sensors like fire-alarms, and other motion sensors reduce the need for extensive enquiry. Corroboration and documentation of becomes a crucial element in the claims process and occupies a great deal of the adjuster’s time.
The four main drivers of the future of claims are:
- Process Innovation: Depending on the claims value chain, the processes will leverage Artificial intelligence, Automation, Machine Learning, etc. to build a cloud-based platform which facilitates a connected partner ecosystem, and better scalability.
- Technology: Most insurance companies are locked in to legacy technology platforms that have scattered data across many older systems. In order to make a digital transformation to newer and better solutions, specialized expertise and adequate resources are needed to ensure that a smooth transition takes place.
- Connected partner ecosystem: Developing a robust ecosystem requires large solution sets, and the knowledge and experience to combine various systems. Capitalize on a partner ecosystem to shift the role of your claims professional from only gathering information to being an insight-enabled decision maker.
- Talent: The role of talent will have to be redefined with the implementation of digital solutions. Since a lot of jobs will get replaced by automation, a lot of the remaining roles will have to take on new responsibilities and skills to complement the systems in place.
The way forward for insurers to steer their digital claims transformation
- Analyze the current position of your company and where you envision it to be
Transforming the service delivery model requires a thorough assessment of the current position of the company as well as the direction of where you want to steer the company towards. Creating a claims strategy based on the analysis and key capabilities will help you customize your claims processes to your requirements.
- Choose the optimal service delivery method
There are a vast array of digital transformation solutions to set up your digital claims process, and based on the current insurance claims processes, decide between nearshoring and outsourcing to vendors to integrate your digital claims processes.
- Choosing the right partners
Seeking external expertise to deploy your digital transformation is your best option. Insurtech companies are capable of forming strong partnerships and enhance your capabilities across the claims value chain.
- Test your systems thoroughly to identify gaps and stay lean
Launching targeted, short, sprints will help your company gain confidence in your partners to deliver a well-tested, stable suite of solutions. Constantly reassessing and testing helps you set-up a foolproof and robust core claims platform.
Transitioning from legacy systems to modern, lean digital systems is an inevitable move for insurers across the board. With the rapid change in technology, standing out by being a key differentiator in the market can ensure your business soars. Implementing the digital claims process of the future should be undertaken with highly-skilled professionals and teams, who are invested and aligned with your goals.