4 minute read 26 Apr 2019
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How to create a better claims experience

By EY Global

Ernst & Young Global Ltd.

4 minute read 26 Apr 2019

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With the threat of InsurTechs growing, the pressure is on insurers to leverage data and technology to improve claims processing.

In the low-touch relationship between consumers and their insurance companies, claims handling may be the most important and meaningful interaction. When the claims process breaks down, both
parties suffer — consumer satisfaction falls and insurer costs go up. 

Unfortunately, claims organizations have not been very effective or sophisticated in harnessing the wide variety of data available to them. But the opportunities now are too compelling and potential threats to customer retention too severe to ignore. Seamless and intuitive self-service transactions are the rule in a wide range of industries, but an exception in insurance — but that can change.

What matters to claimants

Speed, efficiency and transparency are the most important characteristics of a quality claims experience. Better data can help streamline steps in the claims process, setting the foundation for an enhanced experience and, ultimately, “no-touch” claims resolution for many claims.

Consider the options for insurers seeking to streamline or fully automate no-touch or straight-through processing for many basic claims:

  • Property and casualty (P&C) insurers can use historical repair data to dramatically decrease estimating times for different types of vehicles and homes. They can also better manage repair costs and quality based on deeper analysis of these data sets.
  • Advanced telematics data (including video imagery) can be instantaneously captured during an automobile accident and downloaded from the cloud to automatically trigger a first notification of loss entry. Underwriters can “score” the data to determine the extent of loss relative to the automobile’s current value.
  • Social media data can be analyzed to detect fraudulent claims.
  • Drones and satellites can survey damage and collect information about property damage to initiate claims before a homeowner makes contact.
  • Via intuitive apps or other interfaces, insureds can submit photos of damage to their homes or vehicles to initiate the claims process, provided there is no sign of fraudulent behavior (which analytics programs can evaluate).
  • AI can be used to scan claims for the likelihood of fraudulent behavior, while robotic process automation can automatically pay claims that fall within certain risk and financial parameters.

Now consider the options for more timely and personalized service and customer engagement:

  • “Chatbots” issue notifications to the policyholder regarding claims status and payment amounts.
  • Voice analytics assesses customer sentiment during phone calls, with appropriate classification and prioritization of resolution.
  • Behavioral analytics are applied to model likely customer needs and identify high-value policyholders or those likely to dispute a claim.
  • Analysis of customer records can identify claimants facing renewal and good candidates for purchasing additional products.

Three paths toward a better claims experience

Most insurers can and should start with the data they already have before looking to external data streams or adopting RPA, AI or other advanced technologies. They must also recognize that these once-futuristic-seeming technologies are ready for everyday use in claims. Company culture and organizational factors are also crucial for a better claims experience.

1. Data

An insurer’s priority should be to use data to create full views of individual claims from multiple perspectives. Internally, that means transactional data and historical customer data. Useful external data streams include:

  • Weather data
  • Consumer credit data
  • Medical billing patterns
  • General loss details information
  • Social media

All of these inputs will help evaluate future risk and leakage risks and support potential process and experience improvements.

2. Technology

More mature organizations will look to leverage new data storage and management technologies, such as data lakes, as the basis for advanced analytics and real-time visualization. The most forward-looking insurers may build out data science teams to probe large and diverse data sets stored in analytics ecosystems.

Machine learning and visualization techniques can help predict claims risk with greater accuracy and certainty. They can also provide a consistent claims handling approach relative to unbiased reserving, litigation, subrogation and other claim processes. Of course, the benefits of more data and more effective analytics extend beyond the customer experience in claims.

3. Culture

A better experience in claims is not simply a matter of better technology. Culture and a willingness to embrace change also matter. Test-and-learn approaches may be necessary for insurers with limited digital capabilities. For instance, they may begin by piloting automated processing for claims of relatively small amounts or trying bot-driven notification systems to improve communications.

Many insurers must overcome risk-averse cultures to encourage experimentation and “fast failures” in the spirit of learning what works. Some early-adopting insurers have embraced analytics labs or customer experience centers of excellence, where relatively low-risk and low-cost experiments can be carried out in controlled environments.

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More effective use of data and analytics is one of the best ways insurers can deliver what customers want in claims — a fast, accurate, transparent and personalized experience.

About this article

By EY Global

Ernst & Young Global Ltd.