There is an inherent conflict between Claims Operations and IT Change. Whilst operational managers are tasked with keeping business operations stable, IT change is inherently de-stabilising. Operational change is linear, slow and evolutionary in nature. Each incremental change builds on top of the previous set of changes. Over time, this Darwinian approach makes the operational ‘whole’ more complex, which in turn limits the scope and freedom for further change. Operations tends towards a natural state where the focus is adapting to habitat (e.g volume or regulatory change) rather than achieving meaningful process change. Even re-platforming exercises which ought to create the potential for real change end up with merely trying to replicate the current operational model.
The current wave of digital change is perhaps the most de-stabilising of all. Artificial intelligence, intelligent robotic automation and micro-services architectures have the potential to radically turn upside down how business operations are conducted. Whereas in the past claims handlers have been the claims workflow, in the future customers will be able to self-serve their insurance claim underpinned by artificial intelligence, with many requiring no claims handler input at all. There is an opportunity for insurers looking to reduce their loss ratios to rationalise legacy offices and outsource a new type of self-serve assist service to their customers at a fraction of the current operating costs.
Given the conflict between the promise of digital and the ability for claims operations to deliver on that promise, how can operations escape their Darwinian destiny? In this article I set out 5 practical steps to making this a reality.
Step 1: Having spent time working internationally, there is a can-do attitude in markets like the US or Israel where business leaders see ‘opportunity’ in embracing change. In the UK we instinctively find reasons to not do something. Brexit reflects this national malaise. Rather than just play it safe what is stopping you from becoming a leader, presenting a vision and setting out a plan for both implementation and managing the inevitable bumps along the way?
Step 2: Establish key performance metrics – and in particular the actual cost in £ of getting a claim from A to B. A potential client told me that they have a slick onboarding process but when pressed, it turns out the they have a slick process for obtaining a digital signature over the phone but that it still take several weeks and 2 hours of touch time to manually collect sufficient data to process the claim. They ignored the all-important financial metric of how much the process costs to get from A to B. Digital can eliminate certain costs entirely, or else significantly reduce the % of time a claim needs to go back to an expensive claims handler.
Step 3: Metrics in hand, identify the problems that contribute to the cost of the process and the low hanging fruit candidates for digitisation. It’s amazing how many big problems can be solved with very little effort.
Step 4: Have you ever heard anyone say how fast their IT department is at implementing world-class software, quickly? No? Neither have I. There are some incredible insurtechs whose insight and capability is matched only by internal IT teams’ desire to protect their turf. Insist on finding the right partner to work with and then leverage that partnership. Get buy in to engage with insurtechs today on a small scale now without going through disproportionately long sales cycles. I have seen first hand how at Claim Technology we can design, build, test and deploy significant changes in less time than it can take to schedule yet another follow-up meeting.
Step 5: Lastly, abandon those end of process customer surveys and instead look at how you can achieve continuous insight and improvement by measuring how customers are engaging with your digital service in real-time. Tools like Inspectlet connected to Claim Technology’s AI insurance chatbot enable you to see how customers interact with the chatbot, and where there are opportunities to improve conversion rates or the customer experience.
In summary, companies are approaching digital transformation in much the same way they worked in an analogue world. They rely on IT teams to build in-house, incrementally, and then fail to effect change rapidly and at low cost. This approach is broken. So why not contact me to look at how our AutoMate platform can power omni-channel digital self-serve customer claims, and transform operations. Do you have the ‘can-do’ attitude to make it happen?
