New whitepaper discusses digital disruption

Insurance

A new whitepaper from insurance technology disrupter Insurance Nexus gives advice to insurers on how to harness new technology when dealing with customer claims.

With input from Alexander Schmidt, global chief claims officer at AXA Direct, Eberhard Witthoff, head of claims at Munich Re, and Martin Kroos, head of claims at Achmea, the whitepaper claims that the future of claims is now here, and that a customer’s experience of a claim forms their view on a company

“It’s [claims] the only moment where you can make an abstract product like insurance more tangible,” explains Witthoff. “If you put yourself in your customer’s shoes, they’re asking themselves right now: ‘What is the value of my policy?’ This is the pivotal point for the insurer to demonstrate that value.”

The whitepaper first deals with how refining the claims experience can build loyalty in a customer base. It states that there is ‘no doubt’ that technology now plays a pivotal role in the claims experience, allowing speed and efficiency for the customer, and that tying data together in the back end of an automated system is key: “It doesn’t mean the actual customer contact has to be automated, just that everything in the background is humming away seamlessly.”

There are several ways that claims could be handled without customers talking to a member of the claims team, however, with Witthoff citing the example of photo recognition software that allows the insured to take pictures of damage using nothing more than their phone to alert the insurer. In the report, Kroos also asserts that these ‘machine-based’ forms of claim automation can actually be trusted more by consumers: “When you start digitising claims, the nice thing is that everyone thinks that when a machine determines the payment, the public seems to trust that more than talking to an employee. They trust the machine to give a fair assessment.”

Another area of technology that the whitepaper says could significantly influence the claims process is the internet of things (IoT). With more and more appliances being able to collect data, insurers will be able to amend policies to respond to changes in circumstances, instead of just blanket denials.

Technology does not mean the need for less human expertise, however. Schmidt asserts that the more claims become automated, the more need for experts: “You’ll find many more claims analytics people in the department than there were 10 years ago. The skill set spectrum has widened.”

The whitepaper concludes by discussing the effects of startups and how they may disrupt the business of more traditional insurers. Kroos explains that there is absolutely still space for traditional insurers: “The startups tend to get clients who don’t claim that much. Those are the ones that make the claim portfolio look better and we do tend to lose those to the newcomers. But the good thing for traditional companies is that we do have to think about better ways of preventing claims, of lowering claims handling costs. We have to constantly search for more innovation to get costs down.”