Currently, there are over 300,000 people employed in the insurance industry in the UK (direct and intermediaries) and more than 20,000 people work in claims alone.

For the insurance industry the speed of change is arguably greatest within the claims function and a recent PWC report ‘Claims Workforce of the Future: 2030’ found that 51% of insurance CEOs are extremely concerned about the speed of technological change and 81% are concerned about the availability of digital skills in the industry.

Then there’s the need to deal with the traditional, boring image of insurance held by a lot of graduates and young people, when the reality is actually far more interesting. It’s about keeping people and businesses safe in the interconnected world of the smart home, smart buildings, sensors, connected cars and the Internet of Things (IoT).

Data scientists are becoming a skill set in short supply, like a unicorn or ‘purple squirrel’, those mythical creatures with a specific, powerful skill set that sits in exactly the right spot between business or actuarial skills as well as advanced analytics knowledge. With so much technological change going on, traditional manual loss adjusters and underwriters are facing a wave of change.

To put this in context, the whole industry is entering a new world. Innovations such as drones for field underwriting, claims assessment or emergency response, semi-autonomous cars – and eventually fully-autonomous cars – have the potential to reduce accidents, whilst revolutionising many tried and tested insurance processes.

Social media data and other new data sources in the regulated environment are delivering real-time information about the severity of claims and identifying possible fraud. Then if we add machine learning algorithms into the mix, for streaming claims into ‘pay, investigate, challenge or deny’, then it’s clear that insurance providers are going to be placing a premium on employees with digital expertise.

How are insurance roles changing?

In the industry overall we can note that certain roles may be in decline.

Automation and customer self-serve means there is going to be a decreasing need for human intervention which could remove some of the lower levels of claims positions such as junior claims handlers. Our LexisNexis Risk Solutions research, the Future of Claims study shows consumers are actively seeking greater levels of self-serve and a more seamless claims experience, at the same time as trust, personalisation and timeliness.

  • 79% of the senior-level insurance executives surveyed recognized the importance of increasing claims automation as a critical or top priority
  • Those insurers who use virtual claims handling are experiencing 80% shorter cycle times than their peers who use traditional claims handling methods.

All of this is certainly going to involve re-skilling and it is a mega-trend that is going to be defining in future.

There is a lack of experienced loss adjusters in the market and whilst many insurers are seeking to grow their resources and their teams in-house, they are fishing for these skills in a limited pool. For example, numbers of field personnel are shrinking and this is not good for insurers as the longer a claim is open the more it adds to cost (the Chartered Institute of Loss Adjusters also recognises this trend).

Younger adjustors may be coming through but they don’t have the required experience and sometimes they go straight into specialist industries where there is high demand such as cyber risk, construction, aviation, business interruption, product liability or forensic accounting. It is the experienced all-round loss adjusters needed for large complex claims, and surge events such as flood or fire, where the gap in resources is forming.

The extended supply chain of insurance and complex commercial claims in the interconnected digital world are all factors driving up demand for experienced loss adjustors.

Artificial intelligence and machine learning are coming into the claims world to build efficiencies. But these technologies require more data and new sources of data to be effective. AI and automation are growing but the technology isn’t fully utilised yet meaning more jobs will change in the years ahead.

What are the skills challenges and opportunities?

Whilst there is a sense in the market that the 20,000 people employed in claims in the UK may decline given automation, it’s much more likely that it’s the mix of roles that will change, rather than the number.

With greater interventions from analytics and technology for mundane or repetitive tasks, we can expect to see greater numbers of specialised or technical claims handlers, as only the complex claims will need human intervention in the future.

The drive to implement predictive or prescriptive models in claims handling is only going to increase and it will occur in the context of the current shortage of data science skills. Other technology trends such as smart buildings, electronic sensors for risk mitigation, increased preferences for self-service when claiming online and the rise of automated claims logging and settlement are all going to have an effect on the required skills.

Part of the solution to this re-skilling of the claims function is of course going to come in the form of finding new ways to attract the young tech talent of the future. With existing staff there’s a need to encourage learning and ensure the new paths of career progression are clearly identifiable.

Property claims and person claims data available where it’s needed

Putting better data in the hands of claims teams is going to be key to driving towards a better claims experience, faster verification with richer claims history data, with the ultimate goal of the genuine ‘one-click quote’.

One of the ways we are helping insurance providers stay on top of this disruption and prepare for the new coming business model is helping to make previous claims history more universally available in the ecosystem, and at more customer touchpoints where it is needed. At LexisNexis Risk Solutions, our clients are telling us that they need to prepare for the coming wave of automation. With LexisNexis Precision Claims for Home coming soon we will be able to make trusted sources of claims history data available where needed, at the point of claim and point of quote. Our survey of UK home insurance providers* showed us that the current visibility of claims made in relation to a proposed property is limited.

Checking a consumer’s claim and adjusting their premium accordingly post-sale is an outdated acceptance of a poor customer experience. Consumers expect claims to be settled quickly and with empathy and the human touch. In fact the claim is the single most important touchpoint for a person when considering loyalty and their attitudes to an insurance brand. So, in the context of the skills challenges, accessing accurate claims information for fraud prevention and reduction is going to be critical for allowing legitimate claims to be settled at speed.

The claims department of the future is going to be leaner, more proactive, higher-skilled and more data-driven.

*LexisNexis Risk Solutions carried out an anonymous survey, the UK Home Insurers Study. 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.

Follow the link to the LexisNexis Risk Solutions website to find out more about how we support insurers.

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