In pur­suit of the dig­i­tal claims ex­pe­ri­ence

With rep­u­ta­tions and cus­tomer ac­cep­tance on the line, in­sur­ers strive to op­ti­mize their claims process.

Digital Insurance - - CLAIMS - By El­liot M. Kass

What is an in­surer’s big­gest com­pet­i­tive dif­fer­en­tia­tor? It of­ten comes down to how it pro­cesses claims.

“When a pol­i­cy­holder files a claim,” ex­plains No­var­ica’s se­nior vice pres­i­dent for re­search and con­sult­ing Martina Colon, “it’s of­ten the first op­por­tu­nity for the in­sur­ance com­pany to di­rectly en­gage with that cus­tomer. A bad claims ex­pe­ri­ence is not only bad for cus­tomer re­ten­tion, it is bad for the in­surer’s rep­u­ta­tion.”

When choos­ing a car­rier, she adds, mil­len­ni­als in par­tic­u­lar rely heav­ily on feed­back from oth­ers—whether through so­cial me­dia or con­ver­sa­tions with friends and fam­ily. So, op­ti­miz­ing the claims func­tion by in­cor­po­rat­ing dig­i­tal com­po­nents, work­ing through dig­i­tal chan­nels and au­tomat­ing the process, Con­lon says, “is re­ally im­por­tant to meet their ex­pec­ta­tions.”

Dig­i­tal claims sys­tems tend to be the fur­thest along among large property & ca­su­alty in­sur­ers, closely fol­lowed by their mid­size brethren, ac­cord­ing to No­var­ica re­search. Among mid­size car­ri­ers, pa­per­less pro­cess­ing and ac­cess to third-party sys­tems are the most widely de­ployed ca­pa­bil­i­ties, while ap­pli­ca­tions like mo­bile first-no­tice of loss and field ad­juster re­port­ing are spread­ing but still less com­mon (see chart). The adop­tion of dig­i­tal tech­nolo­gies also varies con­sid­er­ably by line of busi­ness. Per No­var­ica’s find­ings:

Per­sonal line car­ri­ers tend to have well de­vel­oped dig­i­tal claims han­dling ca­pa­bil­i­ties, as they look to im­prove the qual­ity of the claims ex­pe­ri­ence they pro­vide to their pol­i­cy­hold­ers. Nu­mer­ous in­sur­ers are mak­ing use of so­phis­ti­cated an­a­lyt­ics tech­niques and work­ing to ap­ply them through­out the claims process. Cus­tomer self-ser­vice tools, in­clud­ing FNOL and claims sta­tus up­dates, are also a pri­or­ity.

Com­mer­cial line car­ri­ers are prone to big vari­a­tions in claims and can ben­e­fit from ad­vanced an­a­lyt­ics tech­niques to iden­tify fraud and mine un­struc­tured data. In­sur­ers are also look­ing to add more spe­cial­ized claims han­dling ca­pa­bil­i­ties for niche mar­kets such as prod­uct li­a­bil­ity and med­i­cal case man­age­ment.

Spe­cialty line car­ri­ers re­quire more flex­i­bil­ity than other in­sur­ers and need a claims process that can han­dle a wide va­ri­ety of ex­cep­tions. They are adopt­ing claims sys­tems that can track and man­age ex­tremely com­plex claims sub­mit­ted un­der custom poli­cies that pro­vide unique types of cov­er­age.

Work­ers’ com­pen­sa­tion car­ri­ers

are be­gin­ning to use data gen­er­ated by sen­sors em­bed­ded in wear­ables, ex­oskele­tons and other types of de­vices to ad­ju­di­cate and man­age claims. They are also turn­ing to pre­dic­tive an­a­lyt­ics to help with cost con­tain­ment, man­age lit­i­ga­tion and op­ti­mize work­flows.

Among the tech­nolo­gies be­ing de­ployed to re­de­fine the claims process, pre­dic­tive an­a­lyt­ics used in tan­dem with ar­ti­fi­cial in­tel­li­gence and the In­ter­net of Things is cur­rently the stand­out. Es­sen­tially, drones and IoT de­vices are used to gather real-time data that AI ap­pli­ca­tions can in­ter­pret and feed to an ad­vanced an­a­lyt­ics sys­tem. Pre­dic­tive mod­els then parse the data and

Keith Ray­mond cal­cu­late prob­a­bil­i­ties for

Vice Pres­i­dent,

dif­fer­ent events like a claim

Re­search &

Con­sult­ing be­ing filed, a large amount

No­var­ica of dam­ages be­ing in­curred or a fraud be­ing com­mit­ted.

“Pre­dic­tive an­a­lyt­ics is be­com­ing a key area of in­vest­ment for in­sur­ers,” says

Keith Ray­mond, a vice pres­i­dent at in­dus­try re­searcher No­var­ica. “An­a­lyt­ics can be lever­aged to in­crease claims han­dling ef­fi­cien­cies and the cus­tomer ex­pe­ri­ence.”

Some of the most im­por­tant pre­dic­tive model­ing ap­pli­ca­tions in­clude:

• Decision sup­port for when to sub­ro­gate, when to lit­i­gate and when to set­tle a law­suit early;

• Fore­cast­ing the med­i­cal costs that are likely to re­sult from an ac­ci­dent;

• Re­duc­ing claims through risk fac­tor iden­ti­fi­ca­tion and mit­i­ga­tion;

• De­tect­ing hid­den pat­terns that are in­dica­tive of fraud­u­lent ac­tiv­ity;

• Scor­ing claims for sever­ity and loss po­ten­tial, so that the most com­pli­cated claims with the po­ten­tial to in­cur the great­est losses can be routed to the most ex­pe­ri­enced ad­justers, and

• Auto-rout­ing in­com­ing claims based on their clas­si­fi­ca­tion and pri­or­ity, so work­loads can be op­ti­mized and bal­anced across both in­ter­nal and ex­ter­nal ad­justers.

• Other wide­spread dig­i­tal ap­pli­ca­tions that are be­ing used in tan­dem with pre­dic­tive model­ing in­clude pa­per­less and straight-through pro­cess­ing and var­i­ous types of cus­tomer self-ser­vice.

They are all part of the push for greater op­er­a­tional ef­fi­cien­cies, im­proved decision mak­ing and—most of all—a bet­ter cus­tomer ex­pe­ri­ence. And since claims rep­re­sent an in­surer’s most im­por­tant in­ter­ac­tion with its cus­tomers, Ray­mond says re­cast­ing the process with an ever-broader as­sort­ment of dig­i­tal tech­nolo­gies will re­main high on the in­dus­try’s agenda.

To go af­ter to­day’s dig­i­tally-savvy con­sumers, “In­sur­ers will need the right mix of mod­ern core sys­tems, pre­dic­tive an­a­lyt­ics ca­pa­bil­i­ties and emerg­ing tech­nolo­gies in their claims pro­cesses,” says the No­var­ica re­searcher. “As they step into the dig­i­tal fu­ture,” he adds, “re­in­forc­ing their claims func­tion with these ca­pa­bil­i­ties will be the cru­cial next step.”

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.