In our work with insurance companies, we often notice a gap between claims strategies and their execution. Too many claims representatives strive to be best-in-class but end up as a master of none. To foster change, they restructure their claims organization and find themselves constantly reorganizing. They aim to become agile and resilient yet end up reacting to market changes.
A recent survey conducted by our team unveils some underlying issues: 4 out of 5 claims executives admit that their overall strategy isn’t well understood within their departments. Over 50% of them do not believe that they have a differentiating strategy at all.
In this article, I would like to share relevant insights on how the digitalization of claims processes can help form a clearly differentiating strategy and how rethinking the claims journey – the customer touchpoints in case of a claim – can create an enormous value for clients. Additionally, I will share several best practice examples and key aspects that you need to consider in the course of the transformation.
Essentially, digitalizing claims management means adding selected digital capabilities to existing processing activities. In doing so, we transform a widely used product-oriented claims organization model into a service-oriented one.
To start the transformation, analyze and expand the customer claims journey, thereby focusing on creating additional value for clients. Our ideal claims journey, for instance, does not begin with the "usual" first notice of loss (FNOL) but with the supporting services for claims prevention beforehand.
Today, many technologies are available to create additional value within the customer claims journey, such as incorporating predictive claims prevention methods. Here are some examples:
The transformation in the insurance industry is in full swing. To satisfy customer expectations successfully, a true digital transformation of claims must address the following dimensions:
Those insurers that successfully follow this transformation path will certainly be among the winners in the increasingly fierce competition. Done right, this evolution kicks off a positive upward spiral that lowers costs, promotes customers loyalty, strengthens employee satisfaction, and enables additional premium and service revenue streams.
Katharina Zimmermann and Sebastian Busch also contributed to this article.