Sep 27, 2018

Reimagining London Market claims

New technologies will help syndicates win customers and talent

Lloyd's syndicates' claims teams are known and recognized for handling complex specialty claims on a global scale. Unfortunately, their processes and systems are also some of the most complicated and expensive in the industry.

But digital technologies are starting to make their mark, delivering a better customer experience as well as operational efficiencies. Insurtech investments are likely to reach $2.6 billion globally in 2018, and a recent study from Juniper Research estimates insurtech-based premiums could reach $400 billion by 2023. These new disruptive insurers are beginning to target major specialty lines in selected markets. They don't have to pursue expensive technology upgrades and aren't continuously surprised by reserve inaccuracy, inconsistent management information, or thousands of pending and static claims. Why? Because they have a digital greenfield as their competitive advantage.

This is the future established insurers are facing and it's forcing them to reconsider how they stay relevant by bringing their claims value propositions into the digital world.

The digital toolbox

Insurers can call on dynamic workflow management to bring down silos in fragmented operations, machine learning, and advanced analytics which provide actionable insights via a claims manager dashboard. AI-led automation can be applied to less complex activities to eliminate spreadsheets and re-keying. This level of claims transformation offers big wins for insurers:

  • Automation can eliminate non-value adding tasks, and reduce error rates and process delays
  • With prioritized workloads, senior claims adjusters can spend up to 95% of their time focusing on indemnity and customer service
  • Operating costs can be reduced by as much as 40%
  • Process innovation, product development, and changing customer demands can be accommodated with new claims and reporting systems
  • Fresh talent will be attracted to high-performing claims teams

These outcomes will enable insurers to continue to win customers based on their reputations for handling claims – and do so at the lowest possible cost.

Imagining a digital specialty claims department

Let's imagine a claims transformation journey. In October 2018, the chief claims officer of a Lloyd's syndicate comes out of a strategy session determined to modernize its claims delivery. The syndicate, as well as its company paper platform, has claims adjusters in 12 countries, but it has been struggling with multiple operating models, a dozen different reporting systems, manually tracking core management information in spreadsheets, and operational tasks taking claims adjusters away from their core responsibilities. An increasing number of brokers and larger syndicates are piloting advanced analytics, ambient computing, and AI on marine, property, and environmental claims – and many have managed to eliminate spreadsheets and automate follow and standard low-value claims. Traditional third party administrator outsourcing, manual segmentation, and data re-keying are being replaced with innovative digital platforms, reducing operating costs, and freeing up technical adjusters. For these and other reasons, the chief claims officer of the Lloyd's syndicate is determined to kick-start a digital transformation.

Fast forward to 2020 and the claims organization has become truly digital.

  • Claims adjusters no longer directly interact with market systems, but use modern and instinctive workflows that push and pull data into underlying systems
  • Non-contentious property claims are investigated either through desktop assessments or independent adjusters utilizing drones and smartphones to capture 3D augmented reality models. These are run through computer vision and AI algorithms using data from the public property registry to help determine the cause of loss and appropriate reserving
  • Simple and complex medical claims are optimized using a combination of machine learning and natural language understanding to flag patterns and issues for claims adjuster
  • Coverage issues and liability determination have been greatly improved on marine claims through smart slips and policies, together with geo-tracking and collision data being structured and instantaneously available on a distributed ledger technology
  • An AI engine reviews FNOL documents for touch-free triage, segmentation, and allocation
  • Dynamic, AI-powered dashboards provide insights into claims adjusters workloads, highlighting severity, next steps, best practices to follow, industry standards, and related external information about the loss
  • The overseas digital back-office consolidates operational claims tasks
  • The chief claims officer can run detailed CAT reports, track litigation and claims inventories across the Lloyd's market and company paper, and highlight those that need intervention

Operating costs have been reduced by over 40%, and the Lloyd's syndicate is now known in the market as a digital leader in handling complex claims. The syndicate can attract the best claims talent, and advanced analytics and AI enable the claims team to perform with a higher level of expertise and efficiency.

The challenge for claims leaders is to apply the same level of innovation and curiosity to reimagining their claims operations as they do to solving complex claims. The goal: back-end operational excellence that truly supports the front-end customer experience.

About the author

Matthew Madsen

Matthew Madsen

VP and European Lead, Claims Practice

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