Altus Consulting lifts the lid on what good insurance claims management looks like

Last week saw my colleagues at Altus Consulting publish their whitepaper exploring the state of UK insurance claims service delivery.

Under title of 'Service Disruption: Next Stop for Claims', in its own words... it lifted the lid on the need for a holistic rethink of how claims are managed, with a clear focus on exceeding customer expectations of the process, rather than an incremental approach to delivering ‘digital claims'.?It explored how the delivery of this requires not just a revolution in technology but fundamentally, a revolution in mindset. Whilst there are areas that will always be beyond the immediate control of the insurer, the industry has the opportunity to develop new, optimised operating models for claims.?As someone who's entire career was shaped by claims; be it Lloyd's practitioner or founder of a pioneering outsourced claims management provider in the 1990s, I read this report with huge interest. Given that akin to today's digital age, I started my business in the midst of the then dotcom boom and at a time when claims service was on its own frontline of reimagination, I found myself recognising so much of the sentiment of the whitepaper being more than a distant echo of those days. Sadly, if one trusts the narrative, it feels like 25 years of lots of change, has brought about no material change.

I'll put my mind back to those days. With increasing customer service needs at the carrier I was working for and a realisation that despite great support, available investment would not resolve all my needs, I took the decision in 1998 to address this more directly and established one of the UK’s first outsourced professional claims servicing companies. With the simple requirement of making handling claims commercial and with a great backer in Davies , I was able to look completely inside the claims value chain, break the component parts down to their core functions and make claims the true service hero. The ensuing story, with rapid growth and many other entrants coming into the sector, it was clear that there was a real value proposition being delivered, driven by the clear needs and demands from our client carriers and other providers.

As said, given that the business was established at the dawn of the internet era, it was clear that technology transformation could become the hero to build something that would define a whole new generation of service. It gave the ability to look inside the value chain, harness the right tech and match it to the human benefits of empathic claims resolution. Dare I say, the results were era defining. Does some if this sound familiar in 2023?

Claims is and will always remain the true measure of the insurance industry. Sure, we might spend huge marketing budgets on building shiny brands, promote all the great things it protects us against, but when that moment comes and a claim occurs then what is often a vulnerable and fearful customer will come to judge the quality and reputation of their insurance provider in that one moment.

Sadly, stubborn levels of formal complaints, allied to anecdotal commentary about business churn, with renewals lost following poor claims delivery being cited as a key reason, then it leaves one to conclude that this remains a systemic issue for the sector to properly address.

So, if all the capabilities are there and we’ve collectively invested large amounts of time and money in reimagining what our customers want then there can only be certain markers as to why this remains the case.

Asking some rhetorical questions; do we have an optimised target operating model for claims handling? Have we fully addressed the key touchpoints that delivers the certainty in claims resolution? Are our supply chains working to the best advantage of clients and their customers alike? Have we fully embraced the technology that can help deliver the right outcomes? Are we really human-centric when it comes to dealing with our clients' claims? Considering Consumer Duties, do we really serve the public interest first, or are we driven by our own operational measures?

These are just some of the questions that the whitepaper attempts to explore, hopefully bringing together the overarching definition and appreciation of what target operating models for claims handling techniques need to look like for our customers and internally, whilst exploring where the opportunities really lay to bring together the pockets of excellence that are being developed to power this new level of target operating models.

Congratulations to Patrick Hayward ACII and the rest of the Altus insurance team for pulling together a really great report. Which really is a must read!

The whitepaper can be found here.