Addressing the claims talent gap through digital transformation
Claims transformation is part of the problem, but can also be part of the solution.
The talent gap across insurance claims professionals should be no surprise for those who closely follow the industry. Experienced claims professionals are retiring at higher rates and at the same time, it’s been difficult to attract new entrants to fill vacancies. According to a recent AON/Jacobson Labor Market Study, “72% of insurance companies plan to increase staff during the next 12 months” and “technology, claims and analytics roles are expected to grow the greatest” while these are the most difficult roles to fill.
With these challenges, insurers are struggling to build and maintain their claims organizations to meet the growing demands and expectations of both internal and external customers. Combine this with the demands of a growing remote, hybrid workforce due to the global pandemic and the strategic imperative to find a solution has never been greater.
Many of the largest property and casualty insurers, like State Farm and Allstate, have closed their offices across the U.S., where many claims professionals used to collaborate side-by-side while managing claims. Why is this a growing concern? These decisions have contributed to the difficulty in retaining a qualified and capable claims workforce who now work remotely, across a multitude of claim types and jurisdictions that require a high level of claims expertise.
Impact of claims transformation
Transformation is part of the problem, but can also be part of the solution. The emergence of digital technologies in the claims space have created the need for current staff to understand how these technologies and capabilities will change the way they work. In many cases, claims professionals will need training to increase their digital literacy and competency, but some are resistant to change. On the other hand, becoming more digitally focused can improve efficiency, enhance productivity and drive toward positive claims outcomes.
As insurers look to transform their operations by reimagining the claims process and customer experience, incorporating Internet of Things (IoT) data into claims, enabling conversational AI, using AR-based training and gamification techniques are helping create a new way of working. As digital literacy increases, the claims professional’s role is evolving from a reactive manager of claim events and tasks to that of a risk advisor providing consultation to insureds before, during and post claim. For the insurer, the ability to enable risk advisory services including loss avoidance, mitigation and analytics to manage insured portfolios is developing as a value-added service and key differentiator in today’s competitive market.
Enabling digital capabilities: A closer look
In personal lines, the enablement of digital capabilities is allowing insurers to provide a seamless claims experience, meeting customers how, where and when they desire to report or manage their claim. Segmentation and analytics models provide the ability for the most appropriate claims professional to be identified throughout the claim process.
The claims talent gap is challenging insurers who are faced with assigning less experienced claims professionals to more complex claims. For example, in litigation, a lawsuit requires the claims professional to identify and understand coverage and defense issues, select and assign appropriate legal counsel based on the claim type and legal issues, and drive toward a quality outcome. As a result, insurers are implementing various technologies and data-driven tools to aid the claims professional in selecting the right claims vendor based on vendor cost, historic performance and vendor availability.
The use of conversational AI and machine learning is being deployed to assist the claims professional in a variety of ways including understanding state-specific coverages, internal claims handling guidelines, state fair claims practices, legal matter management, coverage interpretation and comparative negligence. Automation and self-service technologies provide the opportunity to streamline routine, high-volume claims and simpler claims activities to further extend the capacity of a diminishing workforce.
The insurance industry is not immune to the talent gap challenges in today’s competitive marketplace. In the claims space, leaders need to prioritize business needs with tech investments that will enable the support of digital capabilities and reimagine the claims experience. These capabilities are assisting insurers to meet the growing demands from their policyholder group who are looking to connect with insurers on their terms. Insurers are creating personalized experiences, from first notice of loss to securing claim status and payments — all in a seamless experience.
For the insurer, it’s time to not only meet the expectations of customers but also those of employees, whose job is evolving from managing claims and related tasks to risk advisors who proactively address claim mitigation by leveraging digital tools.
Steven Tesler is the principal of insurance consulting for EPAM Continuum, the integrated business, technology and experience consulting practice of EPAM Systems, Inc. With more than 25 years of experience supporting the Insurance Industry as a Consultant, Technology Strategist and Solutions Consultant, Steven has a track record of managing cross-functional teams in executing strategic initiatives across business, finance, operations and technology from design through implementation.
Darin Campana is a senior manager of insurance consulting for EPAM Continuum, the integrated business, technology and experience consulting practice of EPAM Systems, Inc. In this role, he provides advisory services to insurance clients through their transformation and modernization journeys. With more than 26 years of experience across consulting and insurance industries, Darin helps clients enable technologies in the disruption of today’s insurance markets including intelligent process automation, big data, artificial intelligence, omnichannel applications and IoT.
Opinions expressed here are the authors’ own.
Related: