Handling a new world of claims challenges
As carriers continue to invest in digital experiences, data analysis capabilities and technology ecosystems, the claims process will become more automated and pattern-driven.
The modern insurance claims process is increasingly complex. More variables and data are constantly coming into play, and carriers must determine appropriate settlements and flag potential fraud faster than ever.
On top of technical challenges, insurers are dealing with customers during stressful and vulnerable moments; times when a balance of empathy and automation must be struck in order to give insureds the peace of mind they seek.
The shift to a mostly-automated claims process will likely take a decade, but carriers that are not already taking action will risk falling behind. Now is the time to consider questions like:
- Can we imagine maintaining and increasing our ability to execute without 70-90% of our current personnel?
- With less person-to-person engagement, how will we succeed at keeping a pulse on our customers’ needs and at preventing fraud?
- How equipped is our claims analytics team to manage this data growth and put data into action?
Today, handling claims is a mostly manual process that relies on adjusters’ individual experience and expertise to manage customer experiences and vendor networks.
But as carriers continue to invest in digital experiences, data analysis capabilities and technology ecosystems, the claims process will become more automated and pattern-driven. As a result, industry experts predict that carriers will make significant improvements in the realms of customer satisfaction, operational efficiency and accuracy.
Here are just a few examples of challenges today’s claims organizations face.
Claims processes with multiple touchpoints and massive amounts of data: With many stakeholders and decision points, claims processing involves many business rules that can be difficult to execute. This can result in numerous employee tasks and fragmented customer experience. Carriers seeking to automate these processes will find many activities to track and manage, and few comprehensive systems capable of handling them all.
Changing customer needs: Customers’ expectations are increasing as their buying and servicing experiences outside their insurance needs impact what they expect from carriers. Given that insureds only face a claim once every several years, carriers need to be able to manage the emotions of the situation as well as the logistics. Advanced technologies can help tame the complexity of the process, but there is no substitute for the human element when it comes to providing reassurance and building trust.
A changing claims workforce: Insurers are facing talent shortages as skilled employees retire and attracting new employees becomes a struggle. They are responding by using automation for low-skill activities and modifying their traditional talent requirements to build a workforce for the digital age. Not only is it becoming harder to find individuals skilled in the legacy coding languages many core systems still run on, but the number of companies in all industries competing for talented coders is also increasing exponentially. Maintaining a growing, profitable insurance company today means relying as much as possible on configurable software solutions that individuals like business analysts (as opposed to developers) can work with to create and modify insurance products, business processes and more.
Again, this shift towards automation and specialization will take many years — but given the investments being made globally in areas like AI and claims-specific InsurTech startups, it’s becoming increasingly inevitable.
While some carriers might think they can put off this initiative, even the initial steps in core claim system transformation are so long that if carriers are not already acting, they’re falling behind. The lasting impact of this shift will be completely transformed claims organizations that benefit from new capabilities and are tasked with a new mission to drive organizational outcomes.
Are you ready?
Jeff Wargin is the chief product officer at Duck Creek Technologies. Contact him at jeffrey.m.wargin@duckcreek.com.
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