Digital claims processes: Key to satisfying connected consumers

June 5, 2018 / 4 min read

Consumer values are evolving fast, and companies need to keep up with them. By 2020, customer experience will overtake price and product as the key brand differentiator.

For insurers, that requires more than serving customers where they are—connected on smart mobile devices. Carriers must also engage customers with the type of experience they value most—fast, easy, and frictionless. The pressure is on for insurers to innovate, and that means the industry must reimagine claims.

UK Claims

An outdated claims process

Satisfying the new customer needs requires insurers to deliver a seamless claims processing experience. As Richard Della Rocca, president of ISO Claims Analytics, wrote in A Digital Dream No More: “When connected customers experience a loss, they expect the same ease and speed they receive from the rest of the virtual marketplace.”

Customers want a no-touch claims experience where they’re paid quickly for their losses. That requires shaking up traditional structures to digitise claims functions. But moving from the concept to reality isn’t simple.

The UK insurance industry is one of the largest in the world, paying €11.2 billion in claims in 2016. Making a fundamental shift requires more than a quick fix. According to a Target Group study, 75 per cent of UK insurance professionals believe the industry is too slow to bring new products to market.

Settling insurance claims faster

Settling claims faster means adjusters must quickly decide whether a claim is meritorious. But when you consider the checkpoints required to legitimise a claim—obtaining loss histories, personal information, vehicle information, prior SIU records, and other data points—fast-tracking claims is challenging.

Further, expediting the claims process presents a bigger problem: it potentially opens insurers up to more fraud. Fraud is already a problem, costing the industry €1.3 billion in 2016. Traditional fraud detection methods are often labour-intensive because adjusters need to manually evaluate details to spot questionable claims. While some carriers have created fraud-checking technology to automate the process, they often lack the IT resources to maintain and expand those programs.

Technology that’s transforming claims

Despite the barriers to digitising the claims process, most insurers are on board with devising a new way of doing business. According to a PwC report, 67 per cent of insurance CEOs see innovation as very important to their organisations, which is more than other financial service sectors.

Solutions to transform the claims process

Many solutions are available to transform the claims process. For example, insurers can currently take advantage of automated fraud detection solutions that use predictive analytics to triage claims based on carrier-specific rules and thresholds. With this solution, legitimate claims can be fast-tracked, and questionable ones can be immediately referred to the SIU for further investigation.

Other tools engage connected customers in their own claims process, allowing them to use their mobile devices to send images or stream video of damage to their adjusters whenever and wherever the losses occur. According to a Deloitte report, customers want to use their smartphones to manage their insurance. More than 70 per cent of consumers ages 25 to 44 would like this option, and even 57 per cent of customers 55 and older desire this convenience.

While allowing customers to submit loss images can lead to fraud in the form of doctored photos, new technology can validate losses. Advanced image forensics technology can detect photo manipulation on submitted images.

For property losses, technology such as drones and weather analytics can validate damage. Aerial photos can confirm if an area was affected by a catastrophe such as a flood, and weather data can pinpoint if hail or other perils affected a specific property.

Don’t get left behind

With new and exciting technologies entering the market, the insurance industry has vast potential. But individual carriers must make a choice: adopt innovation to keep pace with customer demand or miss the wave of transformation and become obsolete.

Claims handling is ripe for innovation, and many of the tools needed to deliver an engaging customer experience are available. Verisk has solutions to help insurers digitise claims processing and equip them for the future. For more information, contact Verisk at +44 (0)1252 365464 or info.uk@verisk.com.