Martin Ashfield, Property & Casualty Claims Director, is taking part in the Insurance Innovators Summit this week in London (13-14 November at the QEII Centre).
The creation and use of data are fundamentally changing the world. What started in the technology sector 20 years ago with search and social networking has spread to the real world and is now changing the way companies in a wide variety of industries behave, plan and react. In insurance, the use of data already plays a pivotal role in pricing policies, but the predictive power of vast amounts of data coupled with the availability of powerful processing is now set to drive claims transformation too.
All customers care about great service. For claims, that means a smooth process with a fair payout and settlement. Customers want us to make their claims journey frictionless – and analytics can help with that. In fact, providing analytics and implementing machine learning tools to support people is a key way to achieve claims innovation.
In motor insurance, imagine a system that helps claims handlers make a ‘repair or replace’ decision for a damaged vehicle more accurately and more quickly. This would lead to a better outcome for each customer, with improved efficiency in the garage network and shorter waiting times. It will help avoid the situation in which a vehicle is taken from a customer for repair, only to be written off days later.
All the technology we need to do that already exists. To make it a reality, we now need data scientists and engineers to design a viable system. Unsurprisingly though, insurance isn’t the only industry trying to hire talented people. Analytics capabilities are being developed in sectors as diverse as telecoms, steel, manufacturing, tax and football. The war for talent is well and truly open.
Going forward, the claims analytics team can form a key part of the business. Based on a combination of historical and real-time data, it is possible to build models that predict claims levels or patterns. Insurers no longer just react to claims, we can predict them and prepare for them since identified patterns can help inform appropriate risk management strategies. In the long term, analytics will be used to drive prevention; to predict when a claim is likely to occur will give us the ability to act accordingly, working to stop the incident happening at all, mitigating its impact if it does occur and so minimising the disruption to the customer’s life.
Ultimately the end-to-end transformation of claims relies on our employees. Analytics models themselves do not add value; it is implementing them that brings benefit and this can only happen with claims operations playing a central role. Equipped with the right tools and relevant information, claims handlers need to be – and feel – empowered to take decisions. Analytics can help with this by providing the right information to handlers at the right time, which will enable them to make their decisions better and faster.
We believe that only those insurers who combine data-driven decision making with the human touch will provide the levels of claims service that customers expect – and survive the changes that have already started happening.
