Interview: David Phipson – Embracing technology in a digital world

You set up Lodestone Solutions with Anton Bergheim in 2006. What big changes have you seen in that time, and why do you think Lodestone have been able to overcome any challenges?

I’d say the biggest changes in insurance software since then are Cloud deployments, and more recently machine learning in a usable form. The main challenge has been the natural, and understandable, conservatism by many players in the industry, and competing priorities. We have overcome this by building prototypes to demo how concepts like machine learning and straight-through processing can work in our claims platform.

Why have Lodestone Solutions focused on travel claims software, and what opportunities does that bring to the business?

Travel claims is an insurance niche characterised by a high volume of often low value claims, often with quite complex and variable assessment decision-making processes (for medical, luggage, delays etc). We see this as a wonderful opportunity for process automation – decisioning tools, automated validations, optical character recognition, language and currency conversion, machine learning and the like. This space really suits our capabilities and interests. So we decided to really focus on travel claims about seven years ago.

The Lodestone travel claims system uses modern architecture and API integration – why is this so important for the consumer?

The modern architecture of our Appsure system enables us to be flexible and quick to plug in new features. For example, we integrate to best of breed third-party solutions, such as optical character recognition (OCR), machine learning, fraud checks – these are key enablers of straight through processing. The system is very configuration driven, so it’s quick to set up new clients and to bring on new products. The architecture also allows for unique features for specific clients, which supports our business model.

Tell us about the Lodestone Solutions business engagement model for customers

We engage as partners with our customers. We will fit into their IT architecture, and accommodate a wide range of commercial and support models. They can be as ‘hands on’ or ‘hands off’ as they want. They benefit from shared common code and enhancements, but may also have their own custom features and modules that meet their unique needs, or which provide them with certain market differentiators they desire. So I’d say we are an option not only for an insurer looking for a third-party claims system, but also for those insurers who would normally build their own system. We can accommodate their needs for system control and market leadership.

Travel claims in the US are very different to other countries, can you tell us about the challenges involved?

In the US we process overseas travel claims and visitor domestic medical claims, all on the same platform. The system receives medical claims via EDI in a very structured file format, and there are complex processing rules required, and member-based benefits cumulated across multiple claims, as well as additional functions like medical claim repricing, UCR, OFAC etc. We built all this out using our rules engine and APIs to specialist third-party services. We were lucky to have a progressive partner like Trawick who shared our vision on this.

There have been big changes to claims automation in the post-Covid-19 travel boom. Can you tell us about those changes?

Most of our travel claims clients lost staff during Covid-19 and were caught short when travel recommenced. Automation and STP really came into its own post-Covid-19, as a necessity rather than a nice to have. It really proved its worth as clients were able to scale up claims processing with much lower staff numbers than they had thought possible before.

What’s next for Lodestone Solutions?

Our objective is to be the leading specialist travel claims system globally. Our end state is to have one to two travel insurer clients in each market, and to work closely with them to put them in a clear leadership position in travel claims processing.