Simon Yun-Farmbrough explains why he predicts 2018 will be the year when the forecasts of change will be realised.
It’s clear, from the many conversations I’ve had with insurers over the last year, that they are fully aware of the benefit of and the need to adopt digital business processes.
All of us are conscious of how digital has changed our world. Faster, more personalised interactions are now a feature of every aspect of our lives, from online shopping to online prescriptions, and even interactions with the public sector.
For several years now, insurance CEOs globally have been inundated with commentary and research, foretelling the potential penalties or risks to their business, of failing to adopt digital.
Likewise, McKinsey predicts that, for example, a motor insurer fully embracing digital will double its profits in five years.
Slow adoption holds insurers back
Yet, only four percent of UK insurers included in a recent survey by Altus Consulting are running digital claims processes. While some insurers have made huge efforts to digitalise aspects of the sales process, by ensuring a faster, slicker online experience, this survey shows how the back office, such as claims - which can be the most important point of interaction between a policyholder and insurer - remains woefully untouched.
It’s no surprise then that Amazon has recently ventured into the insurance arena, due in part to what they see as insurers’ lack of digital capability.
One factor that handicaps insurers in their attempts to implement a digital transformation agenda, is the cumbersome nature of legacy systems that exist within their business.
Adapting these legacy systems to support digital processes is an option, and, what’s surprising, is how often this will be the starting point as insurance boards devise their digital claims strategies.
However, in our experience, this approach is likely to prove hugely costly and extremely time-consuming. Ultimately, you will never get the customer experience, flexibility, ease of use, or speed of deployment of a contemporary purpose-built digital platform. Faster claims settlement times will vanish into thin air.
A bold approach works best
The better, bolder approach is to step outside the comfort zone of what you deliver day-to-day, throw away the rule book and rethink your processes from scratch, rather than digitalising what you’ve already got. That is why McKinsey highlights the importance of top-down leadership, long-term vision and an appetite for risk as essential to digital success.
While the route to achieving digital will no doubt have its challenges, the benefits are many and apply across commercial as well as personal lines. Just think how much the customer and you would benefit from improved customer service with NPS scores in the 80s, and a reduction in claims costs by up to 10-13 percent.
What your digital claims strategy needs to include
In fact, as it’s that ‘time of year’, here’s a quick checklist to demonstrate what your digital claims process could include, to help you to decide whether your strategy or approach will cut the mustard:
- Can your clients report any type of claim via your website and via their mobile devices?
- Can your clients easily upload any type of video, imagery, dashcam footage, or documents from their mobile to your claims system without the need to download an app?
- Can this evidence be shared with all parties to a claim via a fully end-to-end digital process that orchestrates all supplier interactions?
- Can these processes, with their workflows and automation, be easily configured by business people in hours and days rather than by IT people in weeks and months?
- Are GDPR compliance, robust resilience and state of the art security fully built in from the outset?
- Can all this be had without incurring any upfront investment costs, purely paying according to usage?
If you can only tick a few boxes, I firmly recommend you reconsider your approach and determine how you can incorporate those aspects that are missing. This way, you’ll have a process that’s more robust and of greater benefit to the business.
If you can tick all the above, then you’re on track to achieve a robust, customer-focused and business-friendly claims process that will put you amongst the digital leaders.