Digital claims offers insurers the opportunity to compete on more than price.
In an industry that’s increasingly competitive on cost, digital technologies are providing today’s insurers with new ways of setting themselves apart from the pack. As many insurance companies focus on transforming their legacy IT systems, they can also harness evolving technologies to modernise their legacy processes.
The digital claims process, in particular, offers insurers an excellent opportunity to revolutionise the way they engage with customers – as well as improving efficiency and creating operational excellence.
One of the few occasions when a customer comes into contact with their insurance company, other than their annual policy renewal, is when they make a claim. It therefore presents the perfect opportunity for insurers to nurture a deeper customer relationship. Moreover, most people today would expect these claims to be a digital process and for any dealings with their insurer to be primarily carried out online. It is likely customers will prefer dealing with their insurer via their computer or mobile device than actually speaking on the phone – and expect the whole interaction to be quick, easy and straightforward.
Delivering excellence through online interactions should, however, be about more than just producing a digitised version of existing processes. The customer-facing portions of the claims process can be modernised even further to deliver a more seamless response. Take, for example, the use of telematics and GPS following a car crash: the technology not only provides invaluable information about driver behaviour, it also results in a faster, more comprehensive response, with far less burden on the customer.
Likewise, data from other devices, such as mobile phones, smart meters, security systems and health-tracking devices can also be used to tailor and streamline the insurer’s response to the customer’s individual needs.
During an insurance claims process, customers are often under stress and keen to achieve an insurance payout quickly and easily. There are a number of digital toolkits and solutions that can help achieve that.
One increasingly popular approach is the use of machine learning to help reduce the processing time for less complex claims. By digitising and providing a cognitive learning system, such as IBM Watson, with historical claims data, the machine is then able to identify the critical factors that determine whether a policy needs to pay out. Provided with new data, the system can predict with a high degree of accuracy whether a policy pay-out would be in order – and all in as little as 15 minutes.
By cutting the time it takes to assess and evaluate data for high-volume, low-value policy decisions, the insurer can pay customers quickly and with minimum disruption. That speedy response also proves that the insurer is there to support customers at their time of need – a key differentiator, over and above low cost premiums. This approach also reduces the internal resources required for processing low-complexity claims, allowing firms to reallocate resources to other critical business areas.
Cognitive technologies and robotics also have considerable potential to reduce the process redundancies created by the fragmented claims ecosystem. A cognitive system that forms a “layer” over other processes – such as interactions with legacy IT systems and suppliers – can detect patterns to reduce repetition in data entry, minimising the time and effort invested in each claim.
Integrating machine learning into the claims process can also boost the insurer’s operational efficiency in other ways. With access to more robust claims-handling data, and an analytics process to provide clear line-of-sight on the total cost to serve, leakage cost and other areas, insurers can build an auditing model that improves operating costs and expenses. That not only adds up to enhanced efficiency but also lower combined ratios, thereby allowing the insurer to offer more competitive prices.
There’s an understandable reluctance to commit to new technologies or wide-scale business changes while legacy system transformations are still underway. Yet, it would be wrong to wait until these projects are completed before getting to work. In order to build robust digital platforms for claims processing and customer interactions, insurers need to get started now: testing different approaches and learning new ways of doing business.
It’s also important to bear in mind the best solutions are the ones that tick both critical boxes: simultaneously delivering a better customer experience; and improving operational excellence.
Maximise the opportunities offered by a digital claims process and you will not only develop customer relationships that inspire trust and loyalty, you will also be creating a platform that competes on far more than price alone.
© 2017 KPMG Lower Gulf Limited, registered in the UAE and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Printed in the United Arab Emirates. The KPMG name, logo and “cutting through complexity” are registered trademarks or trademarks of KPMG International.