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Leveraging insurance technology for speed and customer engagement

Until recently, it was often said that the insurance industry is slow to adopt change.

Over the last several years, though, insurance professionals have opened their eyes to the opportunity and need for the application of modern technology in the industry, particularly in terms of customer engagement.

There is a clear indication that from a technology standpoint, the industry is ready to evolve.

Technology will enable the creation of efficiencies for both insurance carriers and their customers and while different companies are at different stages of the modernization journey, most are on their way. With automated customer interaction prevalent in so many areas of life, insurance customers are expecting technology in the commercial insurance claims process, as well.

Additionally, the implementation of technology will allow insurance companies to remain relevant in a competitive marketplace where they battle for renewals and new customers alike. The key players are shifting to technology-based platforms, both for internal and external users.

While there are many steps to the commercial insurance purchasing process, the claims process ideally isn’t one that is always needed by the insurance customer. However, it is the part of the transaction where the insurance product (and the insurance company as a whole) are put to the test. Will the product perform as the buyer expected, and what will they and their business partner(s) have to do for the claims process to work effectively? The automation of the claims process is an opportunity for insurance companies to showcase their stance on the use of technology in the insurance market. And it is an opportunity to confirm to their customer that they made the right choice in their risk management business partner.

When it comes to dealing with an insurance claim, there is often an emotional element for the business owner that cannot be ignored. This is certainly true for the small and medium size business claims, where private wealth is at stake, and where those involved may still expect to speak directly to someone about their claim. The exception to this may be a situation where a claim presented is accepted and paid in full with very few questions asked. In all cases though, business owners are expecting a quick resolution.

We are still perhaps in a claims world where people feel the need to speak with another human being to be satisfied and assured that their claim is moving along as expected and being addressed appropriately. However, in wide area damage or surge claim scenarios, resourcing issues can make that difficult, if speed and efficiency expectations are to be met. This makes room for transactions to take place digitally, with little interaction with between the people involved. Automation for commercial claims needs to balance these two elements – a digital transaction and a human touch.

The complexity of a claim will often drive this balance and the potential for it to be handled in an automated way. There could be issues unique to the claim that the business owner wishes to discuss with the insurance company. But as technology evolves, those issues could actually be address via a digital platform. When a claim requires further conversation or investigation, those steps can then be performed by a robust network of claims professionals. However, the common elements of the claims process can still be automated, leading to increased speed and efficiency.

The adoption of any technology takes time. It’s worth looking back at other elements of business that have applied technology and how those areas continue to evolve, moving away from human interaction on a consistent path toward automation. Look at banking and shopping as two obvious areas that are now heavily automated. In both cases, customers have adapted to widespread automation. Insurance claims aren’t really any different. Over time, commercial insurance customers will become increasingly comfortable with automation and will come to expect it. It will also set insurance companies apart from one another. However, for now at least, we are in a place where the human element remains important enough in some claims that it must be factored into any claims solution.

It’s important to break down the claims process when looking at opportunities for automation. There are a series of elements associated with a commercial insurance claim, some of which can be easily automated, while other elements, most notably settlement discussions, will perhaps retain the human element.

Consider the fact collection and data requests associated with gathering an understanding of the claim. These facts are an essential part of the claims process:

  • What is the business, what does it do, how and where?
  • What was the loss event and what is its impact?

This fact gathering is followed by the collection of financial data, which is then analyzed as part of the claims process. This fact and financial data collection is critical to the financial damages calculation that will be needed in order to move towards a claim payment. And all of these steps could be automated, shifting the workflow and leading to speed and efficiency, which helps to manage resource issues.

Technology is evolving and rapidly changing the way insurance claims are managed. But clearly, a greater technological potential exists in the industry. And when it comes to the development and implementation of such technology, we are well on our way.

Simon Oddy
Partner, FCA, CFE, MCIArb
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