Insurers are beginning to test digital technologies to transform their claims processes, with the potential to elevate the customer experience, lower costs and confront rising fraud and catastrophe losses.
“We are seeing a number of innovators among insurers, with many targeting the customer experience,” notes Ashish Patel, Principal Advisor, with KPMG in the UK. “They understand that the claims process encompasses a number of ‘moments of truth,’ which can build customer loyalty, or have the opposite effect.”
For example, some insurers are focusing on rolling out seamless, integrated multi-channel options for claims reporting, mirroring their efforts to integrate other points along the customer sales and service chain. Others are concentrating on accelerating the speed of claims handling, information gathering, investigation and payment for a number of product classes, observes Martin Köhler, Senior Manager, of KPMG in Germany. For example, new mandatory telematics emergency notification systems in German automobiles in 2015 could mean that accident claims could be received and assigned faster.
Beyond shortening cycle time, insurers in some markets are experimenting with sentiment analysis tools to improve overall service quality offered by call center staff, notes Louis Régimbal, Partner, KPMG in Canada. “Through automated analysis of voice recordings of customer conversations against key words, phrases and business rules they can monitor handlers and compare claims data, to determine whether positive or negative sentiment scripts impact settlement costs.”
In light of rising levels of false or inflated claims, insurers are taking note of technology that can help prevent, detect or recover insurance fraud losses. For example, data analytics of structured data can improve fraud scoring, text and voice analytics of unstructured data from client interviews, and external source and social media analytics can result in better fraud detection rules, workflows and accurate high-risk flags.
A raft of technologies emerging from the ‘internet of things’ can also be applied to boost both operational efficiency and help insurers respond better to catastrophe, including more-frequent weather and natural disaster-related losses. These emerging technologies could improve insurers’ capabilities prior to, during and post-catastrophe. Pre-disaster, better event forecasting systems and prediction models can help insurers analyze probable policyholder impact and prepare strategies for loss minimization.
“Insurers could also issue early warnings to customers and save lives, making the insurer an invaluable, trusted partner to disaster preparation authorities,” points out Régimbal, adding that such tools could also help insurers rapidly mobilize adjusters and other resources for post-event claims handling and customer support.
There is rising availability of ‘off the shelf’ tools that could transform the process. For example, with Google Glass eye ware, adjusters could capture image, video and voice recording on location, collaborate in real-time with specialists for quick decision-making, and instantly submit forms via mobile apps. Similarly, commercial drones could help adjusters access hard to reach catastrophe locations and transmit data instantly to the claims center.
While the list of ready-to-go or soon available tools is intriguing, the essential first step for an insurance firm is to embrace culture change and open minds to the possibilities. Insurers’ historic propensity for risk avoidance means that many firms have yet to embrace experimentation and constant learning that are hallmarks of top tech firms.
“An insurer might first examine whether they are capturing the fundamental, basic information needed to understand and optimize their claims process,” advises Köhler. “Identify the basic business problems that must be remedied and begin working towards the solutions, seeing technology as the capability.”
“Potentially, concentrate your efforts on two to three well-defined problems and explore technology solutions through co-creation or small-scale, low-risk pilots that can be expanded or abandoned, depending on results,” suggests Patel.
With many routes to achieve claims transformation, the experts agree, technologies now within reach can enable insurers to reclaim their place in the customer-centered digital revolution.
Pilot radical initiatives in a controlled environment across a sample number of claims in order to test, learn and refine how to embed the innovation, and more importantly, have a clear vision of what needs to put in place to execute before making significant investments.
Introduce fresh thinking from outside the insurance sector; look to industries such as Fast Moving Consumer Goods, Gaming, and Telecommunications, who are adopting innovation as matter of course.
KPMG in Germany
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KPMG in UK
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KPMG in Canada
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Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.