Why do seven out of ten insurance claims transformation initiatives fail to deliver their expected benefits? Why do a third of these transformation programs run over their deadlines? There are plenty of playbooks for how to get it right, so why is it still so difficult?
Having worked on claims transformation projects with a dozen (re)insurers and brokers since the beginning of COVID-19, I thought I'd share what could have gone better and some learnings that should serve as best practices.
The term claims transformation shouldn't be used loosely. I don't just mean a standalone change project that simplifies a process, a system implementation, automation of repetitive work, or other projects that only target specific metrics. For me, it means insurers repositioning the claims experience so it consistently delights customers more than their competitors, executed in a way that future-proofs the insurer's competitive advantage. It must fundamentally transform and enhance its unique selling points. The key words here are 'customer' and 'execution'.
Most of the insurers and brokers I worked with during the pandemic had a reasonably good handle on the basic three building blocks of transformation:
- Define your future purpose – the why
- Define your future claims experience – the what
- Define your North Star – the where to
What these building blocks give you is which way to travel, but what you're missing is how to get there. Claims transformation leaders stand out because of their ability to execute and deliver.
The most common challenges pre-COVID were siloed thinking and a lack of C-level sponsorship to support long-term change. COVID has definitely helped break the siloes down and moved the C-suite closer to the mechanics in the engine room.