Customer Experience
Oct 05, 2018

Mapping the future

Claims directors must match digital technologies to long-term strategies

Ninety percent of the claims directors I meet admit they spend less than half a day each month on strategic planning. And I don't mean planning next year's resourcing model, budget justification, or robotic automation via spreadsheet.

What I mean is strategic planning that focuses on longer-term aspirations that will either make them best-in-class or, at minimum, help them stay relevant in the market.

Instead, European claims directors spend the majority of their time fixing what's wrong today, in internal meetings explaining loss trends, customer service and business development, and management reporting. All of which has to be done, but means most claims transformation projects only focus on immediate pain points rather than long-term ambitions

Let's contrast this picture with some long-term, emerging trends in the European claims market:

  • The risk of cyber or terror attacks, adverse weather conditions, or the shutdown of a major transportation hub creating a perfect storm for claims
  • Technological advances in healthcare which are paving the way for redesigning DNA will revolutionize the complexity of medical claims. Doctors will no longer be able to determine causation and the extent of bodily injury – only AI will be able to adjudicate these complex claims 
  • Internet-of-things (IoT) sensors in our homes and offices can do more than just prevent and simplify claims – they can be hacked and used as weapons causing hugely complex claims
  • Adjusters suffer from information overload when the sheer volume of information on a claim is too much for a claims adjuster to comb through. This is where an intelligent claims system has to analyze it.

Deloitte is projecting $19.5 billion will be invested in IoT in the next three years – and in the very industries P&C carriers insure. Not only are their customers' risks changing with the IoT and ambient computing, but also how their claims will need to be handled. Successful insurers will combine their financial strength and knowledge of risk with advanced data analytics and technology that can connect to the IoT, backed up with digital claims processes and AI engines supporting adjusters. 

With these future demands in mind, claims directors need to be clear on what service offering, operating model, skill sets, and technologies are required, and how they will achieve these changes. All too often, internal brainstorms are short-sighted, and the solutions identified conventional and siloed.

Mapping the customer journey

What is required is an 'art of the possible' approach that includes design thinking. For example, one insurer committed to creating a fully transparent customer experience while capturing live customer feedback at critical touch points throughout the claim's lifecycle. This meant going from a reactive and siloed claims department to becoming proactive, driven by customer needs, and powered by new technology. A commitment that fundamentally reengineered its processes and impacted the technology it required.

Future technology must support future strategy. Claims directors need to consider:

  1. Are you cutting costs from existing services and ways of working?
  2. Do you want to be the market leader for claims handling?
  3. Does your claims strategy put you ahead of trends by tapping into privileged or proprietary insights?
  4. Does your strategy embrace uncertainty, offer alternative solutions in scenario modeling, and identify all variables and mitigation factors?
  5. Is there buy-in from senior management to act on your strategy?
  6. Do you have a sequential transformation roadmap that reengineers broken processes, and selects and implements the right technology at the right time?

The answers to these questions will determine the level of investment in, and design of, digital claims handling technologies. Some claims directors will be tempted to shift money based on habit, instinct, and approximation, misallocating resources that would be better spent on strategic planning.

Insurers that don't practice Lean Six Sigma or digital customer journey orchestration typically see costs reduce in one area and then resurface in another. Fortunately, tools exist to guide companies through this process, cutting through the clutter of organizational complexity, cognitive bias, and internal politics. These solutions can map the end-to-end customer journey and orchestrate workflows to prioritize digital interventions that are aligned with the end goal.

Where to start

Automation can transform manual claims processes using a sequential digital transformation approach that includes:

  • Extracting and analyzing data from machines and equipment to determine when and how a machine is likely to fail
  • Tackling water leaks within minutes through noise detection sensors embedded in smoke alarms and intelligent light bulbs
  • Using telematics in a wide variety of vehicles, from cars, to bikes, to boats
  • Automatically looking up content in property databases to determine depreciation, current, and new value
  • AI algorithms carrying out searches for relevant case law on drugs, dangerous materials, or negligent construction advice
  • Automating red-flag detection in medical reports that could indicate a pre-existing condition, including identifying over-treatment on accident and health claims
  • Automating determination of coverage and liability on most claims through a combination of digital inspection and computer vision, smart policies, maintenance history, and sensors connected to the IoT

These are the types of superior customer experience that will define success in the digital world where claims directors are no longer just fixing issues but realizing their strategic customer goals.

About the author

Matthew Madsen

Matthew Madsen

VP and European Lead, Claims Practice

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