The buzz at the recent Connected Claims Europe conference was around how the attention is moving towards a deeper re-engineering of insurance claims, beyond just re-allocating resources such as the call centre or loss adjustors. It is going to require greater use of technology and new data sources, moving beyond just the hype.
A year ago, there was talk of the great opportunity in front of the industry for improving the customer’s claims experience. But the reality today is that exploiting digital and new data sets is much more in the here and now, not just in the future, for putting the consumer more in control, bringing new suppliers together in the claims continuum, and especially new suppliers – insurtechs and the insurers – working together.
Social media, telematics and analytics are playing a central role in the insurance lifecycle from marketing to underwriting to claims. When it comes to the claims process, automation is a game changer. Whether it’s motor insurance customer snapping photos of their damaged vehicle and initiating a claim via an app, or an adjustor using a drone to inspect property damage, data is simplifying and expediting the claims process.
Consumers seeking speed, empathy and personalisation in claims
In terms of the consumer mindset and what people really want to see in future in the claims experience, the findings from the latest JD Power Claims Customer Service Survey are a good place to start. The research showed the rising expectations customers place on the speed of settling claims, time to settlement, and the whole area of managing time expectations, as well as how customer satisfaction can be hit when insurers fail to respond quickly to areas hard hit by weather events.
The findings divided consumer sentiment towards claims into four major themes:
- Show empathy in claims “listen to me”
- Streamline customer communications, as a part of personalisation “simplify for me”
- Improve service speed “prioritise me”
- Optimise and balance self-service options “empower me”.
In the home insurance context, this digital transformation is going to be a change that requires some new data assets and a renewed push in the direction of data enrichment, making all kinds of property data and policyholder available in claims and across the whole lifecycle of the policy. Ultimately, whenever we speak about digitisation and automation, it is data insight that’s going to be doing the work, taking the effort from the customer and answering the necessary questions in the decision-tree.
The insurtechs too are going to help bring more opportunities for customer interaction and data collection.
Insurance claims are stressful for most people, representing as they usually do some kind of personal disaster or loss coming round on average every six to eight years.
So there was a discussion in the Connected Claims meeting about the deeper role technology can play in the customer service aspect. It’s likely to be an important role, with automation helping to create an effortless experience. However automation will not be able to solve all the issues since most of the public are still not ready for a computer that says “trust me”. Aviva, for example, reports that three in ten of its direct customers in the UK choose to notify their claims online without any personal interaction. In health insurance just over half of customers choose to interact over the My Aviva app.
In my presentation at Connected Claims Europe I presented a future where better databases in the claims and property arena–building on the contributory databases we successfully serve to UK motor insurance–are going to create powerful insight for segmenting claims with the necessary precision. Ultimately the point is about the power of the data. It is the pooling of the data sets between insurance providers, as the industry has achieved in motor policy history, that is going to create the new insights that will deliver on the promise of efficiency savings, counter-fraud and claims leakage.
With the launch of LexisNexis Home Prefill and the underlying datasets, together with our claims database to come, we are playing a role in creating new risk rating factors for underwriting, but also business attributes that play into the claims process. Looking at the past and future attitudes overall towards data enrichment, the research* we recently published shows there has been something of a leader-follower relationship going on.
There’s a group of insurance providers who recognise the power of data analytics, and they agree with the view that it’s going to be essential in the future. However a sub-group of those insurers also want to be a follower and not a lead contributor to creating the new data assets.
From our point of view at LexisNexis Risk Solutions, we are beginning to see a wave of followers gathering. There is today a greater disposition towards contributory data assets and what they can bring to the table. In the tradition of risk pooling, contributory databases work on the strict principle of “give, and take back a lot in return” with a clear set of rules that ensure fair play.
Where insurers have data on the insured, policy history, cases of fraud and trends related to intermediaries, brokers and their own sales staff, this information sits in isolation inside each company. It is of limited use for any individual company when looking for a broader, more accurate view of a risk.
When aggregated, this information – traditionally hidden from outsiders within individual companies – makes a lot of sense of what’s happening in the whole market. Even for an insurer with a large market share, there are some advantages to working with shared data.
Current blind spots in claims data
When questioned for our survey,* the view from insurance providers is that there’s a high reliance on customer self-declared claims currently in home insurance.
Other sources of claims data are used by approximately half of the market, so we have to wonder, why is this not higher? Is customer-declared claims data so trustworthy, and is it sufficiently accurate on which to build the claims processes of the future?
Can we reasonably expect a customer to recall the value and nature of their claims over many years? And what about risk insights related to claims for the property before the current occupant? Are we thinking about prior claims data through the right lens?
Undoubtedly there is an opportunity to make things better and to eradicate these blind spots. Are past claims not an important predictor of future claims? Can claims history for the property and person not be used to generate important signals for fraud or claims management priorities?
To shift the curve in making insurance better, we must understand the things that really make a difference to the customer. Technology and the data platforms that are going to form this future architecture will allow for better customer feedback, creating multiple claims journeys that are more relevant to a particular individual, as well as matching the characteristics of the claim better to the insurer’s resources. It’s an ongoing process of simplification for the customer, but it’s going to take new types of data to deliver it.
*LexisNexis Risk Solutions carried out an anonymous survey, the UK Home Insurers Study, 14 November – 13 December 2017. Data collection: A mixed mode of web and telephone survey was used to collect data. To qualify, respondents were screened to meet the following criteria: Currently employed in the insurance industry (direct insurers, indirect insurers, brokers, and MGAs) with responsibilities related to underwriting or pricing. The sample was 77 home insurers who spend at least 30% of their time working in the personal home insurance sector.
For more insights from these research results download the LexisNexis Risk Solutions white paper ‘Application Acceleration: Prefill and Automation’.
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