In 2013, top professional cyclist Philippe Gilbert took part in a short race against a postman. The postman riding Gilbert's bike and Gilbert riding the postman's bike. Who won? The postman... narrowly.
The reason is that whatever power one of the world's best could generate was mediated by his equipment and the shortcomings of a postal bike were insurmountable. Today's insurers find themselves in a similar position when it comes to back-end systems. An inevitable regression to the mean occurs. No matter what the will, desire or aspiration of insurers in the online world, system limitations of the delivery platform will ultimately shape the outcome.
The COVID era has been a time for both reflection and sometime enforced change for many insurers who found themselves chained to pre-covid siloed approaches. 360Globalnet has led the way in no-code digital claims from the UK but despite its growth and appeal, it is often regarded as a revolutionary rather than an evolutionary approach.
Companies who have bet all their chips on hard-coded systems that require legions of developers to write, maintain and update have mostly found themselves without the everyday digital services that their customers now expect. Whatever they tried to put in place to shape services for a changed world, most had to revert to the long-run average state of their systems.
Claims platforms - which often were processes rather than systems - were built for an era of call centres and large back offices requiring platoons of call and claims handlers. This infrastructure was unable to respond to the fundamental changes wrought by COVID or indeed by widespread digitisation of other industries over the last decade.
The large software providers and integrators have an issue in that they cannot simply re-write their core code bases or change their financial models. Consequently, systems of record became coat-trees onto which CTOs hung any number of point-solutions. This felt preferable to root-and-branch system upgrades to increase capabilities and satisfy changes in demand. This is costly, and makes the IT stack more complicated but most of all it bakes the regression-to-mean into the very heart of the insurer. Like Phillipe Gilbert, no amount of pedalling could elevate the postman's bike at the centre.
Only now are the consequences evident. Many insurers remain locked into inflexible software which defies improvement practically or financially on any reasonable basis.
Four key factors remain at the heart of the issue for insurers.
First, customer experience. To provide the ultimate customer service to the policyholder, insurers need every input digitised from every party (Broker, Supply-Chain, TP etc) to provide the quickest and most seamless experience.
Policyholders are increasingly comfortable to transact online, but this has to be an end-to-end experience, not merely online notification. Experience has taught us that many customers will still call to report claims - as we have been encouraging them to do so for the last 40 years – but are happy to send digital information via a link and thus participate in a slicker end-to-end process. For 360Globalnet clients, calls take 4-5 minutes not 25, and NPS rises to around 80 with a comprehensive intuitive process to claim settlement.
Second, operating expense reduction. A main cost is headcount and insurers sticking with staff mediating processes that can easily be fulfilled by decision trees and rule sets are forced to maintain artificially high levels of resource unless end-to-end digitisation of all claims is implemented. Digitisation of every interaction by every actor in a claim event allows the maximum subsequent automations. This is where human intervention is massively reduced and redirected on where the brain can really add value – complex claims or when unexpected problems occur.
Third, indemnity cost control. Until recently, technology has had very little impact on controlling indemnity cost because it was not sophisticated enough to facilitate mass STP or ‘once and done’ settlement. But, more importantly, it’s had little part to play in the management of larger and more complex claims where substantial money is spent.
Insurers need to grasp the nettle (which ironically is often a pleasant rather than painful experience) and design, build and implement bespoke workflow and process on-demand with a comprehensive array of embedded essential digital tools to control all aspects of these types of claim. Historically, insurers have been at the mercy of suppliers - and in the case of Motor TP/bodily injury there is no technology-driven insight improving the management of claims.
80% of information is locked-up in documents, forms, free-text in systems, email which is completely hidden but vital to drive better outcomes (increase reserve releases) when this information is transformed into analysable intelligence. This is a huge area for differentiation if you have the technology to do it.
Fourth, enhanced fraud detection. Speaking of inaccessible data locked up unstructured formats, insurers who can analyse it inevitably achieve earlier and more extensive fraud detection. Behavioural triggers, video and imagery have already proven to be extremely useful fraud detection tools across all classes and 360Globalnet motor clients have reported a 30% enhancement to their results.
And last but not least, agility. The ability to continuously adapt, change and pivot is an essential feature of any business wanting to be successful in a digital world. Technology, which is fundamentally designed to keep pace with increasing digitisation, is a key critical capability.
360globalnet has seen in action how no-code software architecture can be the most transformational technology for insurers. Business practitioners are able to build enterprise-strength applications at the desktop in plain English/any language and puts the power to change on-demand directly in the hands of the business executives.
Anything other than meeting these criteria results in the inevitable regression to the mean.
If you’d like to find out more about how no-code digital claims is simultaneously transforming insurers NPS and cost base, then get in touch today.