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TCF when it comes to claims…digitise!

22 January 2020 editor@fanews.co.za

We have all heard the proverb that a man is only as good as his word.

The meaning of this proverb is that an honourable (perhaps ethical) person is someone who not just makes promises but lives up to them. In other words, someone who keeps their word. 

It comes down to trust. This very foundation of judgement is the same way that insurers are judged, based on the way that they approach and settle claims. We are entering a new era when it comes to this and there is a debate that certain insurers – who are in the minority – are not equipped to effectively handle claims in the digital age.  

A report by McKinsey points out that reimagining value and how it is being presented to clients is the cornerstone of success in the digital age. 

Elements of successful claims transformation

According to the report, successful digital transformation in claims begins with developing a new value proposition that sets high-level aspirations and pursues an end-to-end digitization of the customer journey when it comes to claims.

 The development of a truly innovative customer journey can be achieved by integrating claims with three other areas:

  • artificial intelligence (AI) and digital technologies;
  • the digital integration of the claims’ ecosystem, and
  • a new digital operating model. 

The report adds that together, these elements give management the strategy and tools to both transform claims into a digital function and improve performance on all of the three foundational key performance indicators.

 Faster, data rich approach

The report points out that, in the digital age, the claims value proposition needs to go beyond traditional after-the-fact claims management. The value proposition sets the aspirational goal of offering excellent omnichannel customer experience supported by intuitive digital processes. 

Insurers should aim to adopt a faster, analytics-driven approach to claims handling and fully automate the claims handling processes for clear and simple cases. 

The report adds that, for example, Lemonade has worked to redefine the customer experience with an innovative, chatbot-based first notice of loss (FNOL) system that creates automated claims payouts within seconds. In addition to working actively with customers to prevent claims, insurers should provide services that add value, delight customers, and draw on customer feedback to continually improve service offerings, usability, and performance.

Instilling this upgraded value proposition within the organization is an often-underestimated element of a digital transformation. Top and middle management in claims should become champions for the new value proposition; otherwise, they risk finding themselves halfway through the digital transformation process without the necessary company-wide buy-in to stay the course. 

End-to-end digitization

The report points out that, at the core of the claim’s digital transformation is redesigning the customer claims journey. There is no silver bullet interaction that ensures customer satisfaction; however, a successful redesign typically involves considering processes from the customer perspective and optimizing back-office processes accordingly to provide simple and fast claims services. 

The report adds that insurers should start with an everything is possible mind-set to unleash truly transformative ideas. Claims satisfaction surveys consistently show that customers desire a fast and intuitive process as well as transparency on where they are in the process and what happens next. Accordingly, the digital redesign of a claims journey needs to go much deeper than superficial process improvements. 

Innovation points

The report points out that customers want simple and fast digital interactions but complex coverage details that includes many specific exceptions that can create barriers. Large numbers of legacy products with different coverage details also make it difficult to implement and maintain the technology systems necessary to improve efficiency. Insurers should find ways to simplify products and reduce product generations to ease the development of fully digital customer journeys. 

The report adds that insurers can shift simple, routine transactions from claims handlers to intermediaries, such as agents and brokers, or customers themselves. 

Examples include an intuitive online tool for FNOL and an online self-scheduling tool for claims adjuster appointments. The report adds that, as with any self-service tool, insurers must precisely define the necessary information, for example, where the customer can find his or her policy number. 

They must also build in support in case customers need it. This includes online-chats with a claim’s handler or easy-to-find FAQs. Further, seamless handoffs across channels are critical: customers who start their journey online but want to talk to a claims handler or agent halfway through should be able to do so without having to repeat steps or information. This functionality requires that all system interfaces follow an identical structure and logic. 

Writer’s Thoughts:
At the end of the day, the claims process is what insurance is all about. How are South African insurers coming to terms with claims in the digital age? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts editor@fanews.co.za.

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