The ecosystem future of insurance claims
Many insurers aren’t yet equipped to integrate multiple technology partners into the claims process.
Claims transformation is one future we all need to see prosper. Afterall, the claim is the moment of truth. The point at which the policy fulfills its promise.
However, it’s also the primary reason insurance scores low on trust, and why it’s often described as a ‘grudge purchase,’ even outside of mandatory products.
There’s a myriad of reasons for this. Not least because insurers still impose their claims process on customers. With complex systems, a lack of digitized supply chain integrations, and little in the way of true multi-channel capability, it’s often archaic and frustrating. To the customer, it feels like it’s designed to “not pay out” or resolve the claim fairly.
Presenting on this topic recently to an audience of insurers and insurtechs, it was clear even those of us who work in the industry aren’t immune. We’ve all wondered why our insurer doesn’t have our car details, or why the repair network doesn’t know what our claim is for, let alone provide proactive updates.
It’s all the more frustrating when we also know the technology is available to transform claims for the better. Whereas in the past, technology had to catch up with innovative thinking, it’s the insurance industry that’s now playing catchup.
We have the open systems to deliver the data-fluidity needed to build a holistic profile of each customer and the policies they hold. We have the tooling to enable seamless experiences; the power of artificial intelligence to provide everything from fraud detection to repair network management; and smart documentation. The capacity for straight-through processing and dramatically faster settlement times is extraordinary.
What good looks like
Here’s a simple illustration of what things could look like. Let’s imagine a simple claims process. First Notice of Loss (FNOL) is triggered at the roadside. The customer initiates the claim through their mobile app. This insured provides details of the accident along with photographs, maps and third-party information. The insurer is now prepped and ready to act.
To achieve this, a series of partner and data integrations are needed. For example, Experian for credit scoring, and a provider like Rightindem for eFNOL management; Google Maps for locating the policy holder and identifying repair options; and propositions like Synetics and Clearspeed to monitor for fraud.
Next, the car is assessed, and the repair is considered economically viable. Through solutions like Entegral and Rightindem, the repair network is engaged and returns the best garage options to the customer through a seamless white-labeled EFNOL experience.
While this is happening, smart communications issues reassuring documents and information digitally. Someone like Shift confirms there’s no fraud risk. Carpe Data optimizes the claims process, and a payment processor like Adyen lines up payments, and optimizes reserves across the whole claims book.
It’s all orchestrated the data — the policy details, and the rules woven to make this work — without the customer ever being aware of what’s going on in the background. What they get is great communication, choice and the best path to resolution.
This isn’t a fantasy. It can and is being achieved today. Examples are rife. AMI part of IAG reduced claims settlement times by 40%. esure digitized the claims process, accelerating self-service and solving many of the conventional problems with motor and home claims in the UK.
So why isn’t it more widespread?
Barriers and solutions
The answer is, insurers aren’t equipped to integrate multiple partners or set them up for success. True claims transformation is driven by a customer core and digital experience capability few insurance companies have baked into their architecture yet. In addition, most integration services rely on a dramatic shift in customer data fluidity and the ability to act on this knowledge.
The saying, “it takes a village,” has never been more apt. The key enablers for the future of claims are a combination of insurance claims process transformation, adoption of new technologies, a connected partner ecosystem, and a talent model that values technical claims handling and data science skills.
However, while the partners are ready-to-go, insurers struggle to integrate them into true ecosystem models and experiences. Because of this, their value is often depleted in the process.
To shift the dial, insurers need the right foundation. Their marketplaces can’t sit atop the policy-centric legacy world anymore. Built around the customer, data-fluid, and integrated easily to an experience & efficiency gain. This is the ecosystem future insurers need to focus on.
But it’s not purely a tech problem. As ever, with transformation, it’s a cultural one too. Crucially, this ecosystem mindset needs to permeate throughout the entire organization. Partnering to deliver value across the quote-to-claims lifecycle requires manual and latent data entry. Gaps between underwriting, pricing, and product to the claims experience need to disappear.
To make sure this can happen, the organization needs to be engaged early and know what’s in it for them. They need to know how their roles and working lives will improve, and how they’ll be part of this transformation journey.
Ultimately, the growth engine for insurers beyond healthy ratios is customer retention and loyalty. When viewed through this lens, it’s clear that technology-enabled service delivery with a digital claims ecosystem is now non-negotiable and mission-critical.
Rory Yates is global strategic lead at EIS. These opinions are the author’s own.
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