Commentary: Digitizing Claims Processing Can Be a Real Claim to Fame

The argument of ‘digital versus brick-and-mortar’ is almost over, as many traditional businesses have wisely chosen to embrace evolving technologies to emerge more competitive, differentiated and efficient. Retail, real estate and banking are some thriving examples. Interestingly, adoption of similar digital disruption is making inroads among carriers, claims pros and others undoubtedly ripe for digital transformation. In large part, property lines are moving into the digital age by responding to evolving technology demands driven by millennials. The only way insurers can feel confident of greater customer engagement going forward is by replacing antiquated and paper-driven processes with digital and responsive systems. Digitizing the claims cycle and making it truly dynamic and customer-centric is where lies a huge opportunity to boost customer loyalty.

Rethinking claims experience for the digital customer

Insurance has long been described by everyday consumers as a necessary evil, and the slow pace of innovation can be fairly attributed to this sentiment. Such myopic state of affairs can’t be taken for granted by insurers anymore. The onset of digital transformation has changed what customers expect, and customer experience (CX) is among the hottest topics in the P/C industry today. How policyholders and claimants prefer to communicate has changed dramatically over the past few years. Millennials grew up using computers and now use smartphones to manage their entire lives including banking and investment transactions, while tweeting their complaints en masse. This generation is constantly experiencing technology immersion. It is obvious they prefer to patronize service providers that deliver convenience and personalization on their own terms. Insurance products are no exception. When it comes to attracting millennials’ interest, technology is not just a tool, it is the ultimate differentiation. Carriers need to leverage digital platforms to reimagine and reinvigorate customer engagement.

Digitizing the insurance claim process

A friend in need is a friend indeed is a popular phrase that aptly fits when a policyholder notifies the carrier about the first notice of loss (FNOL). This stage is where insurance companies have the opportunity to position themselves as friends their customers can rely on, to make them feel assured of required assistance and prompt support. Given how companies must win the trust of fickle and demanding customers, this stage comes to occupy a unique tier as it helps determine a carrier’s competitiveness. The choice is clear – dissuade your customers with paper-intensive, offline and manual FNOL processes or harness tech innovation to facilitate a convenient, highly automated claims settlement. Insurance buyers, especially millennials, place a premium on convenience and tech-enabled buying and resolution.

An Accenture study reveals that customers—particularly millennials—are more receptive to purchase insurance from non-insurers, if it means ease of buying and smooth claims settlement when the need arises.

Taking a holistic view at this approach makes it very clear that leveraging technology is a win-win for claimants and insurers alike. Let’s understand this using an analogy. The way adoption of six sigma and ERP ushered in unprecedented operational efficiencies and flexibility, using technology insurers too can transform their core processes and drive innovation. Application of digital workflows helps drive efficiency across the insurance value chain – from policy purchase to settlement and disbursement of claims.

Moreover, having the opportunity to use intelligent business rules, analytics and consistent data, makes the claim intake more dynamic, making it significantly simpler for the claim representative. At the same time, insurers can also gain better and deeper insights into the marketplace and their customers, becoming able to streamline fundamental processes to deliver greater value to policyholders.

Innovating for FNAR, a far cry from reactive FNOL

Lightning performance is a phrase that’s not limited only to fast cars or broadband speeds. It is a quality today’s digital customers come to expect from any service they subscribe to. By overhauling claim reporting and resolution with customer-facing interfaces and agile digital back-end systems, insurers can raise the bar and replace hitherto reactive FNOL with a truly proactive First Notice and Resolution (FNAR).

Cut-throat competition makes it awfully difficult to win new customers. Thus, loyal customers remain the lifeblood of many businesses, and insurance is no exception. A great experience can turn a customer into a promoter with a lifetime value that’s three times that of a passive customer, according to Bain & Company research.

Another part of this contemporary view is to consider the emergence of IoT and increasingly mobile-driven ecosystems. This allows forging ties with new partners who can share revenue and increased customer satisfaction by being able to provide mutually beneficial offerings to their respective customers.

To illustrate, let’s consider the use case of a connected car. Today, most car buyers have smartphones and the growing usage of telematics-based applications has become popular. By combining useful data from location-based apps, vehicle telematics, mobile apps, automotive sensors and GPS, both car makers and carriers can find ways to grow their business, improve vehicle risk assessment and proactively notify and educate policyholders about service reminders and loss prevention.

The impact of digital disruption is unarguably coming fully into focus within insurance, particularly for P&C carriers. Now is the time to up the ante in becoming customer-centric; give customers the ease of choosing convenient methods to submit their claims, track status and find a quick redressal in the event of grievance.

Fred Lizza is CEO of StrategicClaim (http://www.strategicclaim.com/), provider of a SaaS-based claims platform for carriers, agents and policyholders designed to expedite reporting and resolution of auto and homeowner’s insurance losses. He was previously CEO of Freestyle Solutions, an e-commerce and SAAS order management leader. Fred earned his MBA from Harvard. Contact him at FLizza@stclaim.com.