How agile technology supercharges insurance claims processes
Three insurance-industry thought leaders talk about innovation, agility, and the power afforded by modern claims technology.
Modern information technology means two things for today’s insurance carriers: It means they have access to capabilities that can transform their business. It also means that failing to leverage those capabilities will cause individual insurance businesses to be left in the dust.
This is the nature of innovation. Insurance carriers that wish to remain competitive must embrace it.
During a recent Insurance Nexus webinar, insurance-industry thought leaders Amrish Singh, head of products for Metromile, Eric Spencer, chief claims officer for Ameriprise Financial, and Bryan Falchuk, founder of Insurance Evolution Partners, motivational speaker, coach and author of “Insurance Thought Leader,” addressed the power afforded by modern insurance claims technology.
Falchuk warned against several pitfalls that can hold companies back from modernizing. These include dwelling on bad experiences with new tech and being overwhelmed by project scale, among others. “With a new generation of tools at our disposal, we have the ability to move the needle and really innovate in some exciting ways,” he said.
Falchuk added that investment in claims optimization technologies is key to insurance innovation. This may sound like trial and error, he said, and there is some truth to that. But trial and error is not the same as recklessness.
Agility is essential
In the age of AI-powered technology, agility means powering innovation using that very same technology. Consider the analogy of a state-of-the-art fighter jet. Based on their surface area specs alone, machines like the Lockheed Martin F-35 would not fly. But with the aid of extremely fast computerized stabilizers, they fly with incredible efficacy.
As insurers adopt tech capabilities to achieve new things, they will — at the same time —leverage technology to achieve growth that would not be possible without it.
Eric Spencer said, “With that, are we investing in solving for the future or are we trying to catch up with our past? If, when we design, we’re only thinking a few years out we’re basically building a patchwork. Are we just bolting on shiny new products, or are we trying to create something that’s going to differentiate us in the marketplace?”
How do we become agile?
Traditional insurance carriers have the problem of legacy systems standing in the way of new, advanced assets. Often, the question is: “Do we strip out the old, call it a loss and replace it with the newest, shiniest things? Or do we try to stack new capabilities onto what we already have?”
In some cases, insurance businesses fall prey to the fallacy of sunken costs. Just because they spent money on a given legacy asset does not mean it’s a good idea to continue to slavishly run it.
According to Eric Spencer, the problem is one of design. “Does technology lead design, or does design lead technology?”
Depending on the history and business model of the organization, the answer could be either a design-oriented solution, a technology-oriented solution, or a combination of both.
For innovation that drives results, carriers need to understand the customer’s needs and their own. Spencer continued: “Once the core needs are identified, the next task is to ask where we expect our customers to be, not in the next 12-18 months, but the next 10-12 years.”
Falchuk added that carriers need to think in terms of timelines that are “a lot further out than many of us tend to think.”
In short, agility means thinking in long stretches of time. It means angling for a far-off destination. In doing so, we make fewer course corrections along the way. This makes our path straighter, and therefore shorter.
Achieving results through partnership
Insurance carriers might be able to develop and implement true agility rapidly, but struggle to develop the necessary in-house skills to run these new systems effectively and with a keenness that fuels further innovation.
The good news is, they don’t have to go it alone. In the information age, experience has proven time and again that partnering with outsourcing professionals is the key to growth. Rather than building inside assets, expanding a building, buying a whole new bank of computers, and training new teams, insurers can partner with someone who already has the tools and the skill to turn the key on these new solutions right now.
Amrish Singh pointed out that, of the three targets marked for improvements, reducing and eliminating overhead costs and empowering claims teams go hand-in-hand. “The key advantage of technology that often gets missed is that, as you’re investing and taking the load away from client teams in terms of simplistic activities, you’re making them more available to focus on the much more complex sets of activities,” he said.
Singh presented a two-by-two matrix explaining how he prioritizes new tech investments. Simplified processes, done via digital devices benefit from tech investment, while other resources like time and training can be directed through direct human interaction, such as the kind often needed in negotiating complex claims.
“We’re constantly organizing these pieces in this two-by-two spectrum and investing online in places where we can see a return much earlier than upgrading a core claims system.”
Agility is the key to success. Partnering with the right technology vendors and applying proven solutions is essential to developing innovative claims processes that will save money, and secure a place as a leader in the market.
Insurance Nexus and Reuters Events will be discussing this topic and many others, in greater depth, at Connected Claims USA 202 (June 24-25, Chicago).
Mariana Dumont (mariana.dumont@insurancenexus.com) is head of USA Operations for Insurance Nexus by Reuters Events.
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