Claims and Risk Management in the Digital World: A Next-Gen Platform
May 22, 2019
Share this link with your followers
There has been a flurry of reports in 2019 helping insurers plan and implement strategies for the digital transformation of claims.
McKinsey in“The right digital-platform strategy” published May 2019 states that platforms can boost EBIT earnings by 10%. It goes on further to say “For incumbents, a platform strategy, pursued alone or cooperatively, is becoming a competitive necessity. Companies that have yet to make their move may find it increasingly difficult to catch up.”
SMA recently published “Claims and Risk Management in the Digital World: A Next-Gen Platform” and adds to McKinsey’s paper in explaining why it is essential to make this a strategic priority. SMA describes a revolutionary P&C Claims process and the technical capabilities necessary for this new approach.
Many insurers, however, are concerned about the barriers to deploying a new digital claims platform not least the legacy systems at the core of most insurers. Complex, inflexible and expensive to change. An insurer really needs technology that can be implemented without having to re-engineer what is already deployed. A platform that delivers a world class complete online digital experience for customers without capital costs. That also maximises the efficiency of adjusters and claims handlers by making it faster and easier to settle claims.
Such digital claims platforms should also help the business and central IT jump another hurdle. IT once had the luxury of time and money to plan and deploy new functionality. No more!
What once could take a year and cost $10million must now take weeks to three months and involve no capital or upfront costs. What one could take three years and up to $100million must now take months and under $1million p.a. for 150,000 claims a year.
LexisNexis in its 2019 Future of Claims Study emphasises the prime importance of “Balancing Claims Automation and Empathy”. Over 90% of customers choose a self-service digital FNOL ( from over 3.6 million claims processed by 360Siteview). Even so, the study states that during FNOL over 50% of Millennials, Gen X and Baby Boomers believe the fallback of interaction with a live person (where she adds value) is critical. Straight-thru-processing (STP) has its limitations and any claims platform must augment adjusters with technology rather than replace them. Call centres are the past but customer engagement centres with up to 70% fewer FTEs are the present.
McKinsey’s“Insurance 2030-The impact of AI and the future of insurance” demonstrates how vital it is to adopt a platform that delivers - online digital “end to end” claims settlement today to also future-proof the insurer so that it is able to adopt evolving technologies when relevant. AI in claims is commonly considered to be a three-year project for insurers whilst they add the master data management skills and access all the data vital to exploit AI. Your digital claims platform must allow you to add world-class AI solutions to all categories of perils and claims.
Check that the platform you chose is “No-Code/Low Code”; in other words, the business can plan, test and deploy new functionality without the need for coders or reliance on central IT or suppliers. You can iterate and constantly improve claims processes at any time and in parallel be confident that longer term innovation is also practical.
To benchmark your own digital claims platform strategy and find a next-gen solution download the report by following this link.