As we come towards the end of 2024, we like to take the opportunity to reflect on the year past, and more importantly look towards what the future holds. For many insurers, this means developing a plan for the year ahead. But what if we broaden this? Instead of starting with a plan, why not start with a vision?
In this article, we explore what it means for insurers to dream, whether this is synonymous with re-imagining the claims process and the approaches insurers can take to secure prosperity in 2025 and beyond.
Prevention is better than cure
Traditional insurance is based on the promise of restoring customers to their pre-accident state when an accident happens, in return for a monthly or annual premium. While this is a fair exchange of value it is focussed on making the best of a bad situation. What if insurers could take a proactive approach to prevent some of the more predictable claims events? This would present a win-win, where customers face less adversity in their day-to-day lives and insurers have fewer claims to pay.
Practically, this means adapting the insurance offering to include preventative technology, such as sensors, or offering proactive checks. For example, a customer could be offered sensors to predict boiler leaks or a pre-winter check to ensure either their homes or vehicles are ready for the colder months ahead. The challenge with this is that whilst preventative solutions such as these could indeed reduce indemnity cost, they add a layer of cost to a price-sensitive market which makes it a non-starter.
When we talk about daring to dream, the ultimate dream for insurers is to turn insurance from a grudge purchase that customers may try to exploit into something customers actively want and benefit from. This starts with reviewing how insurance is sold and identifying ways to make it more beneficial for insurers and their customers. Perhaps re-packaging insurance as a monthly subscription, not dissimilar to Netflix or Nespresso, would enable price-sensitive customers to see the value of a pro-active preventative service with a reactive loss insurance benefit attached, and therefore hold the key to unlock greater value for both consumers and insurers?
Instantly resolving valid claims
Regardless of how careful one is to prevent them, accidents will happen, so if you can’t prevent it, perhaps you can instantly resolve it. With insurance products currently being packaged as a zero-sum game (what benefits the customer is a loss to the insurer and vice versa), no insurer can be in the position of actively encouraging claims but then every insurer also has a Consumer Duty obligation. The current process? A less than slick, drawn-out back and forth between the two parties, which isn’t easy for either side and where neither party wins.
If we start with what the customer wants – instantaneous claims resolution – and work backwards, the question for insurers is then how do they facilitate this without increasing fraudulent claims or indemnity costs?
Supporting the goal of instantly resolving the claims that are made has two key components:
- Reducing the number of fraudulent claims made – which can be supported by proactive pre and post-policy checks. For example, a simple self-serve process to evidence that the customer owns the bike they have added to their policy offers insurers an obvious and compelling way to eliminate fraudulent claims where bikes have already been stolen or damaged.
- Implementing the claims infrastructure to handle the claims that are made seamlessly and efficiently. Leveraging Claim Technology’s conversational AI chatbot for regulated industries can help insurers gracefully resolve the 70% of household claim enquiries that aren’t covered without the customer needing to speak to anyone, as well as provide an instant and auditable solution that works for both parties. And for those claims that are covered, Claim Technology’s process and decision AI and ePayout solutions can create instant Amazon-style payouts.
Embracing embedded claims to make dreams a reality
“Daring to dream is all well and good, but how do we actually transform our processes to support our vision? Won’t this involve a huge budget, years of work and stress we simply don’t need?”
The answer is that claims transformation doesn’t have to be drawn out, costly and painful. By embracing a new embedded claims approach, insurers can benefit from the immediate cost savings of implementing their dream claims process, but without the stress of having to run a claims transformation programme.
Embedded claims, offered by Claim Technology, are the next generation of claims solutions. They optimise the customer experience, reduce operational costs and reduce indemnity and can be implemented quickly, often within minutes.
Claim Technology provides an insurtech marketplace where insurers can access the technology they need, from eFNOL solutions to ePayment solutions, and embed them inside any channel with no more than a shortcode.
Of the insurers who have embraced embedded claims by Claim Technology, 95% of their customers complete the claims process digitally without needing to interact with a claims handler. With 67% of customers preferring a self-serve experience, this result indicates the positive impact of embedded claims on customer experience. Furthermore, insurers that adopt an embedded claims approach typically achieve indemnity savings of over 15%.
Considering that embedded solutions are available on either a PAYG or Outcome-Based pricing and can be up and running in minutes, it’s fair to say that embedded claims are the key to insurers being able to make their claims process dreams a reality.
Do you dare to dream?
The future of insurance belongs to those willing to venture beyond the way insurance has been sold for decades and embrace bold, transformative visions. Embedded claims are making this dream a reality for insurers across the globe, so the only limit to claims transformation is whether insurers dare to pursue them. The choice to dream is yours – success will follow those who do.
