As might have been expected, insurers are seeing a decline in new business as a result of COVID-19. The steadily rising growth rates of the last few years have come under heavy pressure as the global pandemic rages on. And in order to maintain results, insurers are taking countermeasures.
Claims costs and claims settlement costs together make up 80-90% of all costs, depending on the line of business, which is why a small percentage of improvement is a major cost leverage. While some consider staffing costs to be the major issue across efficacy efforts, in reality the difficulty is in applying broad specialist knowledge for simple tasks (80% of all claims are rather simple and low severity) and improving the customer-centricity of insurers by enhancing processes.
Let’s explore some focus topics and starting points for getting transformation projects off the ground.
Which topics are currently in the focus of claims management transformation?
The optimization of the customer journey through the claims process. Insurers see the potential to open up cross-selling opportunities and make a valuable contribution to customer loyalty through good and empathetic claims handling. Especially in a landscape of price comparison portals and strong competition, this is absolutely essential.
The increased use of data analytics, such as predictive analytics, for call center management and capacity planning before storms. This also includes the use of data analytics for fraud detection and avoidance of overpayments on the performance side.
Process automation, whereby the optimization of the process chain and the consistent handling of claims are of primary importance. Once the processes have been optimized, the next step can also be the degree of automation, with an eventual goal of straight through processing. Insurers should not attempt the second without the first, because the optimization of processes already offers considerable advantages and sets up the internal system for more advanced projects down the line.
What are the immediate starting points for improving claims management?
They do not have to be moon-shots. Rather, it can be apparently trivial preliminary work that is most necessary for insurance companies to comprehensively improve their claims management. A huge problem and obstacle on the way to digital automated claims handling is data quality. First priority should be to actually improve the document-intake process. Many AI or analytics projects suffer from data quality and ultimately fail due to the “garbage in, garbage out” problem.
In addition, the interfaces to bring the data in and out of the different systems and to provide the necessary networking are still missing. It would be a huge step forward if the claim handler could bring all – already existing – but not available data onto a dashboard.
Process cost optimization is already a tired topic. What really counts is the reduction of claims costs. 1%-2% can already mean millions in improved results. Apart from standard claims, there is still a lot of catching up to do. Solutions for the automation of non-standard claims are at the top of the insurers’ wish list (solutions in industrial insurance, for example). The trend is for the technology partner to take over and handle the entire process starting with the FNOL. For this purpose, relationships between insurers and technology/service partners are established. And this is omni:us’ sweet spot. To learn more, reach out to our sales team: [email protected]