Inflation is a population measure; it doesn’t affect everyone the same. Not consumers and not insurers. The claims inflation imposed by rises in the costs of materials, fraud and compliance are being offset by those the reaping deflationary effects of digitisation via no code technology.
Let’s face it, insurers were already facing a gruelling journey of changing consumer demand and regulatory burden. War and Brexit compounded inflationary pressures then turned their mountainous hike into a Shackleton-esque expedition of uncertainty and peril.
The mountain was always facing up but now are bills for labour, materials and fraud—all the while, coupled with supply chain disruptions and the linked difficulty in retaining customers more sensitive than ever to both price and service. Rarely (never?) has there been a more challenging vantage point but, even with this backdrop, some leading insurers are using new technological approaches and innovations to slash operational costs and counter the impact of inflation.
Claims management has always a pivot point in the quest to reduce and control operational expenditure. It’s when all parties to a claim converge. It’s when every cat (and Cat!) needs to be herded simultaneously for the insurer to deliver on their promise to customers who are distressed and needing speed, empathy and action. This hazardous combination can quickly fall foul of multiple siloed sinkholes of cost.
And, yes, customer experience during this time directly impacts upon their decision on whether to renew at the end of the contract. They may have cost over a year’s premium to attract but a poor service and settlement will see them leave, the recruitment cost sunk and more marketing cash needed to replace them.
Putting insurance aside for just a moment, the biggest contributor to deflation for decades is digital technology (and its movement from luxury to necessity with consumers). Digital transformations open the door to automation in the form of processes freed from human cost and error. This in turn drives efficiency: faster, cheaper outcomes that boost NPS because end customers also respond best to speed and those Amazon style updates-as-it-happens. Insurers have historically opted to throw claims management problems at call centres and human handling. The general consensus is that if an insurer wants to improve their customer service they need more staff. Today, where the mobile phone is a remote control for life, this is an obsolete, expensive and unscalable strategy.
The ingredients are simple and unmagical: online FNOL providing a single digital claim record that connects all parties to a claim, then orchestrates the supply chain through workflows, and automatically updates claimants every step of the way. However, to escape the astronomical cost and time of huge spec and build hardwired claims systems, the final ingredient is no-code architecture so the entire journey from FNOL to settlement can be configured on-demand with IT only performing the most value-add security elements.
Here’s how digital deflation in action works...
Online FNOL allows the policyholder to upload ALL the relevant information at a time that suits them. Most claimants, who initially call to make a claim, are now happy to be pointed to digital FNOL to complete their claim. This drops the average call length down to just a couple of minutes.
A single digital claim record linking all parties together that automatically updates the customer takes this to the next level. A lack of communication between an insurer and claimants breeds anxiety and frustration, which leads to them picking up the phone and calling. And costing! Automatic updates at every step of the claim lifecycle not only boost customer satisfaction, but also massively reduces the number of incoming calls seeking status updates.
The ultimate aim is end-to-end digital claims for all but complex losses. Claims that don’t require human intervention in short. This is entirely possible – even for elements of larger and more complex claims - while the simpler pass straight through. Claims staff can add value where it’s really needed with expertise and experience, rather than waste time on monotonous re-keying and coordination of eminently automatable processes.
Supply chain orchestration is another steppingstone and connected technology enables claimants to engage directly with third parties whilst maintaining full visibility for the insurer. For example, claimants booking appointments with repair shops during the FNOL stage. This no-touch approach drives deflation in more ways than we can list here.
Finally, at the heart of this matter is the IT infrastructure itself. Flexibility and agility are the essential ingredients for any player to thrive within insurance. Both the onboarding and claims landscapes are constantly changing and this is where no-code architecture offers insurers the ability to adapt and change both their rulesets and what is presented to their customers at a moment’s notice. Think pandemic, more weather events, claims surges, elaborate new fraud techniques, the growth of previously dormant claims classes (business interruption, for example!).
Traditional IT infrastructure has always been stubborn and expensive to move at the same speed as the times they live within. IT projects are still measured in years when weeks are where success is measured. Furthermore, demand for quality development resource is higher (and more expensive) than ever, and its accelerating.
Yet, if business practitioners can themselves create and implement the FNOL and workflows needed without any knowledge of code then everything changes. No-code infrastructure enables just this. Business practitioners can build and deploy changes and improvements literally overnight (and potentially de-deploy if needed). The incremental cost of change shrinks to near zero, IT lag disappears and missed opportunities are hit.
Insurers are changing. Some of the biggest have already grasped this innovative technology and, for them, the maximum benefits accrue. Reduced IT spend, better retention and of course relative claims deflation which can be used in pricing which drives the virtuous circle. It also means that those insurers who stand still and ponder on their strategies going forward, quickly get left behind by their digital and agile counterparts.
360Globalnet has been at the forefront of no-code digital claims for years now, delivering end-to-end automation and efficiency not seen before in claims management. Clients are reaping the disproportionate rewards of digital transformation and achieving Opex and often indemnity deflation that they could only dream of a few years ago.
If you’d like to find out more, get in touch today. We can tell you how, why, how much and how quickly. The results will surprise you.