Change is afoot
Paul Stanley, 360Globalnet’s managing director, envisions dream-like perfection in insurance claims that’s actually available today
Innovation and insurance are two words that aren’t often used together.
Think of insurance and you’re likely to think of a slightly archaic industry dominated by big organisations with lots of capital, used to underwrite risk and meet the increasingly conservative regulatory regimes, such as Solvency II.
In July, the largest consolidation deal saw Ace Group pay £18.1 billion for Chubb, in what is now a well-worn path for insurers to bulk up in order to reduce cost.
However, size is no excuse to stand still. And yet, the larger the organisation, the less agile they tend to be, with less ability to react, in a world where unrelenting change is the norm. A couple of years ago a senior executive at one of the largest reinsurers in the world told me, “We’ve been doing business this way for 123 years, so I see no reason to change now.” While he has a point, I think we all know, at some point, that Dinosaur will become extinct.
Change has come from some more progressive territories, particularly the UK, where distribution has had a major shake-up, as a result of the disruption of customer buying behaviours. First, Direct Line, introduced the seismic change of direct-selling by telephone in the mid-nineties. Then, the aggregators, introduced the one-stop shop to buy commodity products online in the noughties, increasing competition and driving down premiums.
This time, disruption is likely to be led by the customers themselves who’re now accustomed to transacting all manner of business via their smartphones or iPads. Order now, receive soonest is the new mantra. In insurance however, there’s no click, click, upload to have your claim settled immediately, having provided your insurer with information to validate the loss in one go.
Witnessing insurance claims operations first-hand 40-years ago, I saw people behind desks in city centre locations. People moved files around and used their desk phones frequently to field incoming calls. Today, the offices might be out of town locations but there are still people moving files around (albeit some are on the screen) and still people at desks making and taking as many calls as they did 40-years ago. An insurance claim today is a time-wasting anachronistic process, riddled with ‘touch points’ that make it prone to human error.
But it can’t last forever. Soon the old claims model will give way to one that will feature:
- A distinct absence of waiting in a queue for 15 minutes, to speak to a stranger in a call centre who uses your first-name, like an old friend
- Customers empowered to manage and settle their losses online, at a time to suit them, using their mobile devices, to provide a complete view of the loss
- A completely online model, with no fuss, no errors and no intervention by humans
- Claims settled within minutes and hours, not days, weeks or months
- The flexibility for insurers to deploy staff from home or wherever works best, so that a claim can be settled at any time, whether 7am or 22:30 hours
- A repair service, including motor, that will come to you, taking the stress out of the whole process
- A visit, where necessary, to coincide with your schedule. No more taking days off to meet a contractor or loss adjuster
- Insurers fulfilling a really useful role in the case of more complex losses; providing emergency assistance. Using live streaming video, to link the supply chain for timely and effective decision-making, will ensure a drama is not made out of a crisis
It sounds utopian but it isn’t. This operating model – facilitated by digital technology and driven by customers – is already happening today. It is exceeding customer expectations, making insurers super-efficient and lowering indemnity costs by putting the dampener on fraud. Customers using it have no complaints. So, I guess, it’s only the dinosaurs that need be afraid.