Why The Claims Experience Must Be Part of Transformation Roadmap Discussions
The words “insurance” and “innovation” are not typically used together. But today’s insurance?leaders are looking to change that.?
As it relates to policy intake, claims management, and servicing functions, carrier leadership?often asks, "how do we create a flexible, cost/time-efficient, a customer-centric process that?supports our vision when data is inconsistent and internal processes are so fragmented?" The?labyrinth of disparate systems and manual workflows that have been built over decades act as?obstacles to growth.
We saw the obstacles disrupt business continuity plans as the Covid-19 Pandemic sent the?insurance world into hyper-drive to “virtualize” sales and operations. A recent Deloitte Center for?Financial Services survey uncovered that "75% of Insurance executives polled, felt their carrier did?not have a clear vision or action plan to maintain operational and financial resilience during the?pandemic”.1??The gaps to transact and support business in a virtual world became obvious.?Customers and associates need to transact business 24/7 but current practices don't support this.
Narrowing the multi-trillion-dollar insurance gap presents a tremendous opportunity for new?financial products to disrupt the industry. The competition will be fierce. Internal and external?digitization is imperative to support innovative growth. When claims management and servicing?solutions are architected for growth with a customer-first mindset, policyholders and?beneficiaries become hot prospects. The path forward doesn't need complex, multi-year, multi-million-dollar implementations, or extreme staffing changes. It just takes the right solution.?
WHY HAS INTERNAL CLAIMS TRANSFORMATION LAGGED??
Digitizing the external new business experience has helped carriers remain competitive and?attract top agents. But what happens AFTER a policy is issued? Carrier-specific, manual?workarounds, and disparate databases tether together antiquated processes and lead to longer?approval times, higher NIGO rates, and multiple customer touchpoints.?
Digital claims management and servicing transformation can be costly, complicated, and time-intensive. Small interventions can solve specific issues, but until recently a single platform?solution wasn't available.?
Traditionally, financial services lag other sectors in their adoption of technology. 2021 Gartner?Roadmap Survey reported that “currently, a lot of value is placed on assisted service and the?customer service representatives. While the rep remains a valuable focus of technology?investment trends, customer service leaders are also signaling an increasing focus on the value?of analytics and self-service technologies that help understand and serve the digital customer.” 1?
CURRENT STATE: IMPERATIVE NEED FOR CLAIMS AND SERVICE TRANSFORMATION?
From my discussions and research, I’ve identified the following top four "pain points," driving?carriers’ accelerated need to find flexible solutions, intuitive, and offer self-service options for?easy adoption by associates and customers.?
PAIN POINTS BECOME OPPORTUNITIES?
Pain Point #1: Multiple Legacy Systems and Manual Workarounds
Solution: Multiple Systems & Workarounds Become a Single Orchestration Layer??
As I’ve said before, carriers can’t expect to offer an Amazon-like customer service experience if?their internal systems function more like a 1970’s K-Mart. When carriers develop their digital?claims and servicing strategy, there are two considerations I recommend:?
1)?Current Optimization: “How will digitization affect the current business model and optimize the near-term.” This may mean a carrier takes an implementation approach that addresses?specific needs vs. implementing a straight-through enterprise transformation.?
2)?Long-Term Transformation: “How will the digital strategy support the business transformation necessary to?stay competitive in a changing industry landscape. This requires an investment?into developing a strong digital foundation.
Consolidation and rules-based configuration build the foundation that carriers can evolve from.?
Pain Point #2: Changing Customer and Associate Expectations?
Solution: Flexible Cloud-based Platform and Digital Solutions to Meet and Exceed Expectations??
Transformational technologies enable claims and servicing associates to bring the most value to?the service function. These could include employees having any time, anywhere any device?access to workforce and case management tools, consolidated internal collaboration tools, and?uniform communications methods to deliver the most value.?
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The technical transformation decisions need to meet the preferences of the digital customer.?These include self-service channels such as online account portals and mobile applications.?
Analytics are critical. This includes the collection, analyzing and reporting on customer data using digital analytics, sentiment analysis, and machine learning to be able to make informed?transformational decisions. Interaction assistance tools and “Voice of the Customer” feedback?will help enact an optimum solution for all.?
As carriers built upon their digital claims and servicing foundation, they need to enable the?ability to support third-party providers in internal digital transformation efforts. Additionally,?carriers will need a scalable technology solution that supports future growth.?
Pain Point #3: Changing Claims Workforce?
Solution: Support the Changing Claims Workforce While Supporting Legacy Requirements??
End-to-end virtual claims and servicing processes are essential as insurance carriers transition?to in-office and hybrid work models. Their popularity is accelerating carriers’ need to implement?straight-through and single-issue digital solutions to support this. Gartner recently reported that?“55% of employees say that whether or not they can work flexibly will impact if they stay with?their current employer" 3.??
Additionally, the Insurance Information Institute reports that "81.7% of insurance claims and?policy processing clerks are women. With 1 in 4 considering downsizing their careers or leaving?the workforce entirely post-pandemic, carriers need to focus on solutions to retain these?valuable workers"*.?
Something often overlooked is that as technologies are evolving, support for legacy systems is?still needed as boomers with skills like COBOL retire. COBOL still runs over 70% of the world's?businesses and IBM estimates there are over 200 times more transactions processed daily by?COBOL business applications than there are Google and YouTube searches every day. *?
Pain Point #4: Lack of Retention Processes for Beneficiary Assets??
Solution: Create a “Customer First" Mindset to Turn Beneficiaries into Clients?
Less than 4% of beneficiary assets are retained. A customer-centric, beneficiary claims process?can turn beneficiaries into prospects, when done well. 4?
Turning satisfied clients into customers. Imagine a world that through rules-based configuration,?assets could be retained at the carrier instead of being disbursed to the beneficiary to be?managed somewhere else. Or a rules-based suitability configuration, that connects beneficiaries?to an agent to discuss suitable financial products offered by the carrier. It exists.?
MOVING FORWARD: THE IMPACT OF FLEXIBLE CLAIMS AND SERVICING SOLUTIONS?
Carriers that strive for a digital strategy that creates a seamless orchestration layer between?policyholders, claimants, and associates will see near-term digital optimization efficiencies and?be well-positioned for long-term transformational opportunities.?
To learn more about Benekiva go to www.benekiva.com . To download Benekiva’s latest White?Paper: “Carrier Empowerment Through Intuitive Claims & Servicing Solutions” go to:
1 2021 Gartner Roadmap Survey
2 Deloitte Insights 2021 Insurance Outlook. December 3, 2020. https://www2.deloitte.com/xe/en/insights/industry/financial-services/financial-services-industry-outlooks/insurance-industry-outlook.html
3 Women in Insurance. https://www.iii.org/fact-statistic/facts-statistics-careers-and-employment.?
4https://www.researchgate.net/publication/329170378_Bringing_COBOL_back_into_the_College_IT_curriculum
5 Gartner: Three Challenges Driving Remote Worker Fatigue. April 26, 2021. https://www.gartner.com/smarterwithgartner/hr-should-watch?