Allstate made headlines recently when it announced in its Q2 earnings call that it had downsized 500 employees in multiple geographies.
Allstate attributed the job losses to QuickFoto Claim, its solution for virtual claims processing, and a cursory reading of the articles that followed could reasonably result in the conclusion that technology just killed more jobs.
However, for those with a deeper understanding of the claims process, the perception that job losses were the direct result of implementation of virtual claims technology does not ring true.
Tracking employee productivity is a challenge with legacy systems, so when field staff are not optimally deployed, carriers commonly hone in on fixed cost staff resources as the problem. In reality, robust virtual methods are an opportunity to better allocate resources.
Building a successful virtual claims operation requires attention in two major areas: change management and employee redeployment.
Related: Liability claims: Emerging technological influences to watch
|Don't rebuild the airplane while trying to fly it.
The desire to adopt new technology is finally catching up with the need, but insurance carriers' legacy infrastructures pose a challenge. Their existing technologies are not friendly to most of the new tools that are available to streamline and improve the claims workflow, so integration is becoming more difficult at the exact same time that pressure builds to adapt to evolving consumer expectations.
Faced with this challenge, some carriers are making the decision to forgo outsourcing and build virtual claims processes internally. However, the challenge with this philosophy comes down to expertise and trade off decisions. Given the number of challenges (Distribution, Data and Analytics, Pricing, Digitization) insurance carriers face, is there enough change management expertise to transition from traditional to virtual claims processes?
Traditional technology providers have never handled a body shop negotiation, processed a virtual claim, or even taken a customer call. These knowledge gaps can drain carriers' resources in the long-term.
Because they are under increasing pressure, carriers who are developing solutions internally are compelled to launch before fully developing strategies around new protocols. And because claims processes are a constantly moving machine, this tactic is equivalent to simultaneously rebuilding an airplane while trying to fly it.
A more tested path to avoid "rebuilding the airplane while in flight," carriers should pursue is a strategic plan for change management with a partner who possesses both an understanding of the industry and the technology background to handle deployment challenges. This approach can offer a path to fully leverage personnel and mitigate job loss, while offering carriers the most effective plan for streamlining claims processing.
Related: 4 technologies that are revolutionizing the insurance industry
|Consider the customer when it comes to new technology.
Technology is capable of providing a completely virtual claims experience, but a completely virtual experience will not be the perfect fit for every customer or every situation. Instead of attempting to go completely "touchless," carriers could consider opportunities to revamp consumer interactions to ensure that consumers are treated the way they want to be treated.
For example, a claims experience does not need to end with a bill or receipt in a consumer's mailbox. The conclusion of the claims process is an underutilized opportunity to surprise and delight consumers with a personalized interaction to reinforce a positive experience.
On the other end of the spectrum, consumer interactions can be revamped to ensure that particularly sensitive or difficult situations, such as mechanical failures, vandalism, or CAT response are handled by field employees.
The least disruptive, and most effective, integrations of new technology require change management and redeployment of employees, factors that go hand-in-hand with each other.
If carriers choose to update their technology, either independently or with an InsurTech partner, it's important to understand that disruptions such as job losses would be the result of on-the-fly change management, not implementation of new technology.
CJ Przybyl ([email protected]) is president and co-founder of Snapsheet. Andy Cohen ([email protected]) is the company's COO.
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