ILC ARTICLE

What shape is the claims process heading towards?


An insightful panel debate held during ILC’s Home and Property Claims Conference recently considered the factors influencing the claims process, and how technology, inflation and customer expectations will change claims in the future.

Taking part in the debate – What shape is the claims process heading towards? – which was hosted by Home and Property Chair, Alan Soutar, wereLaura Lazarus, Head of Home Claims Operations, Aviva; Angela Kelly, Managing Director – Home Claims Services, Sedgwick International UK; Connie Beasley, Head of Home Claims, First Central Insurance; and Tom Simpson ACII, Head of Technical Claims, NFU Mutual.

Technology

They agreed that AI is already and will continue to have a substantial impact on claims management, but warned against adopting new tech for tech’s sake and focusing solely on efficiency gains.

Laura said, “We have to make sure we think differently when deploying tech to make sure it’s solving problems and helping the customer. Customer behaviour and expectations are changing, so we need to use tech to support their needs.”

However, with new tech comes new opportunities. The benefits around improved communication and quicker decision-making are well known, but Angela pointed to another area where tech can enhance the sector.

With skills in such high demand and attracting new talent a challenge, she urged the industry to promote the technology employed within insurance to the next generation.

“We will need a different skill set in the future,” she said, “but emphasising new tech and delivering the training necessary to use it to handle more technical claims can help us in the war for talent.”

Inflation

Technology can also help insurers combat rising costs, from FNOL through to settlement.

Tom said, “Generative AI is the biggest opportunity in the next 10 years to take waste out of the process. It won’t all be efficiency related, and keeping up with rising customer service levels will provide a competitive advantage.”

He continued, “Claims costs can be better managed by deploying technology at the front end to empower claims handlers to ask the right questions and make informed decisions more quickly. That’s where you can make a real difference.”

Meanwhile, technology can also be deployed to provide everyone involved with a single view of a claim in real-time, cutting out expensive hand-offs.

Laura said, “The key focus is moving claims through the process more quickly. Every hand-off costs money but this is within our collective gift to solve. Getting the claim to right place quickly and making the right decision in a timely manner will undoubtedly save us money, but at the moment a claim is a bit of a relay race; we need to put more focus on settling the claim rather than just pushing it to the next stage.”

Suppliers

Achieving this requires a much closer relationship with the supply chain, but there is a fine line between working with or for someone, and the insurance sector has sometimes crossed that line.

Connie explained, “Discussions about claims costs aren’t held monthly, but weekly or even daily, and any slight change is analysed to death. Insurers that are successful from a CFO’s point of view are the ones who have a robust oversight of their suppliers. But this can put a lot of stress on relationships and adds cost because we have to measure everything. We do need to change the relationship with suppliers and trust each other, but at the same time there still needs to be transparency about why we need a level of oversight and audit.”

Angela agreed, but said that this is a difficult tightrope for insurers to walk. She said that on the one hand there is a need to measure and monitor performance to ensure good outcomes, but on the other too much governance can put even greater pressure on supply partners who are facing their own challenges around costs and labour.

She said, “Inflation is not just affecting insurers, it is having a big impact in building contractor networks. Material costs increases aren’t coming down and there is a huge labour shortage with an ageing workforce and skills moving to other industries. So while insurers need to have control and governance over their supply chain, if they want too much control then their suppliers won’t want to work for them.”

Environmentalism

Another key influencer on insurers is climate change. It is impacting both the severity and frequency of claims – flood claims costs are now the highest they’ve ever been and anticipated to continue rising – while tougher regulations are ramping up the pressure to employ more sustainable practices.

However, better use of technology can lower a claim’s carbon footprint by enabling better and quicker decision-making and reducing the number of site visits. Also, the quicker the response the greater the likelihood of restoration and/or salvage.

Innovation is also making it possible to use more sustainable or recycled parts in repair, and the panel urged insurers to structure greener policies and champion them to consumers.

Laura concluded, “We get carried away trying to think of the big iconic actions we can take from a climate change perspective, when the reality is it will be baby steps for most of us. Having conversations around the smaller changes we can make will help us untap the bigger steps we can take.”

The Home and Property Conference took place at Silverstone Race Circuit, headline sponsored by Claims Consortium Group; Gold Sponsors Rainbow Restorations, Catalyst, Clearspeed, LexisNexis Risk Solutions, Perfect Group, Polygon, Pulse, and Wiser Academy; and Silver Sponsors Crawford, eVolution Claims Management, Home Repair Network, ICEYE, Prime Disaster Response, Safeline Environmental and SD Claims.

ILC’s Home & Property division is backed by Corporate Partners: Allied Universal, Clearway, Corelogic, DAC Beachcroft, Geobear, ICAB, Innovation Group, Sedgwick, and Verisk.

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