June 20, 2019 by Insurance Nexus
Fast, simple and personalized. Those are the demands being placed on Canadian carriers as they strive to meet customer expectations in a digital experience-driven world. It’s no longer enough to set your yardstick by how well (or badly) the competition is doing – but how consumers’ expectations of their transactional worlds are set in general. The insurance carrier is up against the Amazons, Airbnbs, Googles and Ubers of this world.
The consensus is now that only cutting-edge technology can bridge this gap between demand and capability, and while having this technology available is a boon to most industries, it can be a mixed blessing for insurance. Often these decades-old institutions are just not ready for the help technology is able to give. Too siloed, too dated, and with technology too complex to simply plug and play, carriers are asking themselves some fairly fundamental questions about how they can match this new, higher bar of customer expectation. What is clear, however, is that carriers can’t afford to delay taking action – one study from KPMG shows most enterprises are not scaling Intelligent Automation (including AI, AA, RPA) quickly enough to their meet own objectives or financial returns, while those who have managed to scale up quickly enough are seeing strong financial performance as a result.
To discover how two leading insurers are addressing the challenges of embedding advanced technologies to enhance the claims customer experience and drive strategic, competitive advantages, Insurance Nexus spoke to Craig Milroy, Director Architecture at Sun Life Financial and Koosha Golomohammadi, Director of Advanced Analytics at Manulife in a live webinar moderated by industry thought-leader, Stephen Applebaum, Managing Partner of the Insurance Solutions Group, with the key findings aggregated for the whitepaper, Deliver a Seamless Claims Customer Experience Using Innovative Technology.
There is clearly a sense of frustration among insurers at being unable leverage the enormous quantities of data at their disposal and move quicker on delivering a seamless claims customer experience; “The reality is, we’re kind of stuck in our legacy investments,” says Craig Milroy. “We [as an industry] have all this data, it’s just locked within our legacy systems and that’s really holding the insurance industry back from achieving a true digital experience.”
“Most importantly today, this is about rethinking how we do business, about our legacy systems and how we start to think more digitally,” Milroy explains. “Do we replace them? Do we build a net new build of a new system to support our digital end, or, do we refactor our legacy environments to expediate some of the claims, modernize some pieces but keep the core the same? Or is there a hybrid approach – fixing pieces, investing more in web, mobile and chatbots?”
This divergence between objectives and capabilities has created a strong demand for third-party, B2B insurtechs who have the technology and expertise to bridge the gaps. Although many insurers are unwilling to give up control of their data, processes and customer service to third parties, the sheer lack of in-house technical expertise is forcing them to look outside the business. One example is Quebec-based Allai who offer computer vision and NLP to P&C insurers – through an app, brokers, carriers and service providers can utilise a catalogue of AI capabilities while retaining complete control over proprietary data, algorithms and IP, circumventing concerns around ownership.
In terms of actually applying technology to the claims process, both Milroy and Golmohammadi advocate targeting the ‘quick wins’ (i.e. processes that can easily be automated, saving labour and financial resources); “take those paper processes. How can we digitize them through [robotic] process automation?” asks Milroy. “Can the more pedestrian [claims] be automatically adjudicated?”.
Milroy also cites keeping customers updated as one aspect that can be automated relatively easily but with big results to the customer experience. While many have been nervous about automating interactions, European insurers have led the charge with 45% of the market now considered “mature” in its use of chatbots according to research from Cognizant. This even extends beyond basic information gathering, since one third of all chatbot interactions were considered to be ‘advanced’, i.e. incorporating active servicing, and it is these interactions which reduce the need for human-based service that produce the great cost savings.
This rise in automation can also be correlated with customers’ increasing preference to interact on mobile, a trend that is set only to grow. While insurance is only recently adapting to this, Golmohammadi concedes that “the banks entered this area a few years ahead of insurance companies [and are] getting close to maturity in this space.” Increasing the use of mobile communications could significantly influence how well carries know and serve their customers, since the engagement “rate is under 20% when we send an email or ask clients to interact on the web”, Golmohammadi states. “When we engage with the consumer via mobile, that is a lot higher, and the wealth of data is a lot higher. It’s also more secure.”
In the same way that once technology cannot, on its own, create a seamless claims environment (but rather, an ecosystem of technologies), both Golomohammadi and Milroy insist that while technology is the enabler, it is company culture that is key. It is important to see the constituent parts of claims transformation not in isolation as only relevant to this process alone, but also to identify how these actions can impact the rest of the business. In this respect, both advocate a top-down approach, driven by the CEO, that can view technology-driven claims in the context of the entire enterprise; “having that top-down focus will really get to the priorities in terms of the investments you want to make,” Milroy maintains.
There is no doubt that the claims experience is the biggest moment of truth for carriers and it is naturally the focal point of technological innovation for most. It is here many will find elements of competitive advantage, and where carriers will start to lose out if they don’t act quickly enough. But it is important to go into this process with an open mind. There is so much more opportunity that technology can deliver across the whole business, not just in claims. Staying open to opportunity, being ready – and willing – to act, will be vital.
This whitepaper, Deliver a Seamless Claims Customer Experience Using Innovative Technology, was created in conjunction with Insurance Nexus’ upcoming Connected Insurance Canada Summit, taking place September 10-11, 2019 at the Toronto Marriott Downtown Eaton Centre Hotel, Toronto, Canada. Expecting over 350 attendees from across analytics, product innovation and claims departments, the event will explore the core challenges facing the Canadian Insurance market, including how to harness AI, automation, product development and seamless claims delivering both an enhanced customer experience and a more efficient carrier. For more information, please visit the website: https://events.insurancenexus.com/canada/.