Perspectives: Reimagining the claims ecosystem through digital transformation

The latest tools and technology have opened a whole new world of possibility and progress for the insurance industry, facilitating its transformation to one that is tech-enabled, groundbreaking, more efficient and attractive to a new generation of talent. One of the most exciting things about creating a sustainable and future-forward insurance industry is that it impels us to examine and reimagine not just our processes but the entire claims ecosystem. 

Because claims are where we really touch the policyholder, they have a significant role in driving the reputation of the insurance industry. As a result, claims transformation is something that should be a priority for the entire sector. When used thoughtfully, technology gives us the unique capability to streamline our industry’s processes without compromising the empathy component of what we do. As we embrace all of the possibilities of digital transformation, this is our time to shine.

There is an industrywide recognition that the claims process is where we have the biggest opportunity to make a difference in policyholders’ lives. And that’s true for better or worse — we can have a positive impact by helping them through difficult situations, but we can also have a negative effect by making difficult situations more complex.

This particularly resonates if you consider it from a policyholder’s perspective; they may have been paying their premiums for months, years, or, in certain cases, decades before they have a claim, so when the moment comes that a loss occurs, it’s imperative that we get the encounter right. 

Having more omnichannel approaches to handling first notice of loss, or FNOL, is the first way we can achieve that objective. Multiple generations are filing claims, which means that having an ecosystem that can connect those generations is extremely important. Consider, for example, my own family; my daughter rents an apartment, we own our home, and my parents have their own house as well. All three of our generations would report a claim differently, and we each have different expectations of how we want to interact with a service provider — from my digital native daughter, who wants convenience and speed, to my parents, who may need a little more personalized handholding through the claims process. A good ecosystem can meet all of us where we are and with what we need.

The second consideration when reimagining the claims ecosystem is the importance of enabling inspections in multiple ways. Certain inspections may require the services of a highly skilled adjuster, whereas others can be handled through self-service, allowing policyholders to do the documentation themselves. In certain cases, you may be able to send a contractor directly to a site to mitigate the loss. Deciding which path to follow for each claim is a very important process. Once that path is determined, ensuring that the policyholder knows precisely what’s happening and what to expect going forward is another critical component. 

These elements working together form the claims ecosystem — which includes inspectors, adjusters, contractors, the FNOL process and eventually the actual settlement of the claim. Until recently, outdated technology systems and manual processes have played an outsized role in that process. As we strive to bring those pieces together to build a much more effective ecosystem, new tools and technologies are the missing puzzle piece, offering compelling solutions to move claims faster so we can restore claimants’ lives more quickly.

As an industry, insurance is largely made up of digital migrants — most of us started our work on paper — and it will require a mindset shift as we reimagine the claims ecosystem. In today’s tech-enabled world, consumers can manage nearly all aspects of their lives digitally, from making purchases to taking care of banking and investments to reserving a table for dinner. This is often not the case when it comes to insurance. The fact that several studies, including a recent one from McKinsey, have shown that insurance as an industry has seen the least amount of operational efficiency should be a big wake-up call. 

With a changing consumer mindset focused on ease of use and ubiquity of service, a traditional inefficient and analog service model is clearly not going to meet needs or expectations going forward. The claims experience is a great use case for thoughtful digitization, as it presents a unique combination of fully automatable back-office functions and interpersonal service interactions that require empathy and a human touch. In other words, it’s up to us to lead the way — a role we are ready and willing to embrace.

We’ve only just scratched the surface of finding ways to leverage digital transformation to drive our reimagined claims ecosystem, but what’s already clear is that organizations that are comfortable with disruption will drive this evolution.

Digital tools can be leveraged to automate both complex data analysis and simpler, more monotonous tasks. In both cases, this saves valuable time that claims professionals can use to focus on the human element. We can also use artificial intelligence and machine learning today to examine FNOL data, resulting in a better triaging system and even making it possible to generate preliminary estimates for a human adjuster to review and refine. Automating these functions has enabled us to streamline our employees’ jobs, making their workdays more productive and enjoyable and freeing them up to focus on delivering an empathetic experience for insureds. 

But we can’t stop there. Generative AI excels when it comes to automating responsiveness, making it a powerful tool to be used in customer experience interactions. Algorithms have been created to give detailed answers to policyholders’ most frequently asked questions so that instead of providing a generic preloaded answer, our customer service tools can answer more specific questions with increased granularity. This enables customers to get quick, more personalized answers to questions without contacting their insurance providers. And just like that, we’ve improved the claims experience for those policyholders as well.

The need to revolutionize the claims process is pressing and immediate. Those of us who are comfortable with disruption need to think differently right now, modeling the kind of future-looking change that will carry us all into the next phase of our industry. Our peers are watching closely, and if our successes can set a new standard and inspire others in the industry to innovate, it will lead to a newly reimagined and vastly improved digitally enabled claims ecosystem.

Technological innovation and a disruption mindset can bring the industry into the 21st century, attract young talent, and vastly improve policyholder experiences. Digitization can also prepare us to handle a growing influx of claims driven by climate change and an increasingly complex global society. It’s an exciting time for the claims industry.

Rohit Verma is president and CEO of Crawford & Co. in Atlanta.