As the world becomes increasingly digital, customers want to access their insurance policies in a way that’s simple, affordable and convenient. Digital claims give customers that freedom, and allows for straight-through processing where no human intervention is needed at any point. This can be a pain-free approach, which increases transparency and speeds up the settlement time. But it will take time to implement effectively, and it's essential to keep the customer journey in mind throughout, helping you deliver an exceptional and competitive service.
Digital claims isn’t a fad, it’s a seismic shift in how customers want to work with their insurer, which is fundamentally reshaping how insurers do business. Customers need insurers to slot into their busy lifestyles, and insurance firms are automating more processes by the day to keep pace. As such, it’s essential to update your services to meet emerging expectations, while making good use of your data to add value to the customer experience.
Embracing digital processes can help your clients at every step of the customer journey, but it’s important to address key challenges to ensure a joined-up approach.
At the pre-claim stage, there're plenty of opportunities to add value, often through claim prevention approaches, which are becoming more popular across the sector. For example, in-home cameras may reduce the likelihood of a break-in or accident. A wearable fitness tracker may promote healthy lifestyles and help manage pre-existing conditions and reduce health claims. These InsurTech devices can also support early claim intervention, for example via cameras attached to vehicles that automatically initiates the claims process after a collision. These can be key features to help differentiate your service and attract new customers.
There’s also ESG to consider, which is an increasing concern for customers. Taking action to improve sustainability and maintain biodiversity is essential, and it’s important to understand the impact of your business and your wider supply chain. Establishing your core values will help you establish key metrics and targets to put those values into action and implement long-term, real-world change. These elements bring significant value to customers who want assurances that corporate values align with their own, and that they're supported by action.
At the notification stage, it’s important to give customers the choice over how they’d like to contact you and initiate their claim. Ideally, this should include a 24 hour digital services with a full introduction to the self-service claims, approach so customers know what to expect, and when. While you can encourage customers towards preferred routes, the ultimate choice of channel needs to remain with the customer.
If there any problems, you need to support a seamless transition from one channel to another. For example, if the customer is struggling with the online application and wants to move to a phone call, they need to be able to pick up the application where they left off. It can be frustrating to enter claims and personal details online, only to repeat them all over the phone to a customer services operative. Tackling these issues can also reduce duplication of effort, creating efficiencies and saving you money.
Currently, the biggest barriers to success are team structures that don’t suit all channels, and manual back-office systems and processes. Manual processes are always going to create a backlog, and slow down claims processing. They also give greater leeway for inconsistent or unstructured data, which can cause discrepancies and prevent further automation. Firms also need to find a way to manage peak periods, ensuring all channels continue to be available during high-demand.
Digital claims processes present more opportunities for data analytics, enabling you to enhance your fraud detection and prevention techniques. This can help you identify your trusted customers, with consequently less onerous validation processes. The biggest challenge will be tailoring those validation processes, depending on trusted or suspicious status. Complex products will also be harder to validate, and digital claims may lead to greater product simplicity with validation processes in mind.
Faster settlements are good for business. They reduce stress on customers, cut costs, and reduce the time available for fraudsters to manipulate data. Automated decision making is an integral element of the digital claims process, drawing on a range of data to inform product decisions. However, it’s important to set realistic expectations with customers over how quickly the claims process may take – it may all be automated, but that doesn’t mean it’s instantaneous.
Assessment is the area where you may see some early teething troubles. Where customers aren’t happy with the result of the assessment, they may switch channels and contact your team by phone. This can lead to high customer services demand, and recurring complaints can highlight issues with specific policies. Your team can view this as a good learning opportunity, helping to identify policies that are no longer fit for purpose.
At this stage, you need to consider third parties you’re working with to fulfil payment services. That includes whether they're reliable and resilient, and if their values align with your organisation and meets your ESG expectations. Setting and monitoring appropriate SLAs will help you effectively oversee and govern the relationship, while managing customer expectations.
Greater use of tech can support your indemnity spend control function, helping you pass savings on to your customer. Tools like blockchain can help you make payments faster, and reduce traditional the traditional lag time.
It will take time to transform your claims process – but it’ll be worth it. Meeting emerging customer expectation is vital, but digital processes also offer more scope for data analytics, bringing more opportunities to add value. The biggest challenge will be consistency across all channels, and you will need to rethink your team structures and operational procedures.
For more insight and guidance, get in touch with Stuart Riddell.
