June 15, 2022

By Carla McDonald, Director of Product Management, Claims, LexisNexis Risk Solutions and Kajal Vakas, Senior Vertical Manager, Claims, LexisNexis Risk Solutions.

This article first appeared in Claims Media and is reproduced with consent.

When you know more about the customer and the risk at the point of FNOL through actionable data, you can determine the right next steps to expedite the claim and support the customer in the way they want.

There is little doubt the insurance industry will need to adopt a ‘data first’ approach to provide effective claims management processes in the future. ‘Data first’ focuses on using data enrichment to have automated processes in place that speed up necessary elements of the claims journey but allow insurers to have the ‘human touch’ to support customers.

Why is this key? With regulation of pricing by the Financial Conduct Authority, insurance providers need to focus on the elements of their service they can control. Greater automation of some aspects of the claims process can drive efficiencies, lower costs and streamline services at a time when the claims experience will become much more of a competitive differentiator, and data will be the enabler to achieve this.

The additional and more urgent factor to consider from an efficiency perspective is the current number of claims job vacancies in the sector. A report by Vacancysoft found that insurance claims vacancies hit an all-time high in January 2022, with the sector publishing nearly 400 vacancies.

Putting data first may take a change in mindset. Data already held within the organisation will need to be examined, alongside external data sources to gain a 360-degree view of risk, to speed up the claims process and provide exceptional customer support.

For example, in a property claim, claims professionals should consider data they already hold on the policyholder first: are they a long-term customer? Have they or do they have several policies with the brand: commercial, pet, travel, motor as well as home? Have they had a claim on one of those policies? They need to be able to join the dots.

Those questions can be answered quickly when you have built a single customer view through linking and matching disparate customer data and assigning a unique ID such as LexID for Insurance. This single, consolidated view can then keep building as the claim progresses and can be enriched with external data sources such as past claims data gathered from across the market to help identify whether this new claim could be linked to fraud.

Insurance providers must be careful not to fall into the trap of collecting enough data to gain a single customer view but not recognise that the customer’s past experiences or behaviours from relationships with other insurance providers is equally important to gaining a true view of the customer.

Bringing in highly granular data about the property is the next step: its age, roof type, construction, bedrooms, bathrooms, parking space, market value, etc. If you can access validated information about the property that’s normally asked of customers at claim, why not simply ask them to just verify that data? With a greater understanding of the property comes a greater understanding of the best approach to repairs. This applies equally to motor claims. If you know a customer has certain advanced driver assistance system fitments to their vehicle, the process of selecting the correct garage for a repair becomes far more efficient.

Then there is the risk to that property from perils such as flood, fire, subsidence at an individual address level. This data could help validate that the address was indeed in the path of a flood or built on clay soil. Insurance providers could also bring in past claims related to the property itself based on market-wide contributory data.

This holistic approach to claims assessment benefits both the insurance provider and the end customer. If an insurance provider can provide fair pricing and ensure the customer journey at claim is seamless, efficient and empathetic then they stand a far better chance of retaining that customer at renewal.

The most recent CII (Chartered Insurance Institute) Public Trust Index found consumers want insurers to be like a good butler: quietly getting on with their job when they are not needed, attentive and responsive when they are needed, including when they make a claim. They want to be shown compassion; given effective assistance and advice and have their risks assessed individually and not generically. The CII’s Public Trust Index also found consumers consistently state it is less important for them to have the cheapest policy than it is to have confidence that the insurer will pay out; claims that are paid quickly and respect from the insurer when they make a claim.

This research underlines the value of a data first approach to claims. When you know more about the customer and the risk at the point of first notification of loss through actionable data, you can determine the right next steps to expedite the claim and support the customer in the way they want.

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