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Three key components of a digital claims strategy which will ensure its successful execution.
Many insurers are reviewing their business strategies. Most have the same three goals: maximise profit, reduce costs and improve the customer experience. Current thinking is focussed on claims, where digital transformation promises to deliver on all three goals.
Having a robust and well-considered digital claims strategy is essential if insurers are going to make the most of the technologies now available to them. Most technologies can play some part in the claims process, whether it be predictive analytics reducing fraudulent claims or new ways of assessing damage after a loss. In this blog, we discuss three key components of a digital claims strategy which will ensure its successful execution.
To begin, identify what you want your digital claims strategy to accomplish for your organisation. All change strategies should be answering the question: how can we improve the customer experience? From there you can start to make important decisions about where to focus and prioritise. Without doubt you’ll need to make best use of your biggest asset–your data. Then, prioritise which areas would benefit the most from better data platforms and analytics.
The insurance industry has access to vast amounts of data, both internal and external sources. Traditional IT infrastructure cannot scale up to deal with the amount of data or the number of data sources. It means that without new technology platforms, insurers are missing out on the opportunities data provides for their businesses.
Thanks to AI and machine learning, insurers can use data analytics for improved decision making in the claims area. By detecting patterns in claims, it can reduce insurance fraud, therefore having a positive effect on loss ratio. Predictive analytics can also mitigate risk by determining events and other factors that can affect the outcome of claims.
Then, with customer satisfaction as the primary consideration, examine each part of the claims process. Identify the areas where introducing new technology would improve the customer journey. For example:
Your digital claims strategy doesn’t have to bring sweeping change across your entire claims IT set up. Instead, it should supplement and support your current systems. Conduct an audit to evaluate your current claims technology. It will identify what each system does and where you will need to invest in new technologies. You may find that existing systems have the capabilities to carry out some of the functions you were looking for new technology to perform.
As you’ve already invested in legacy technology, you may understandably be reluctant to replace it. Thanks to the cloud, rather than replacing your systems, you can supplement them with other technologies. Platforms like SaaS and PaaS allow legacy and new technologies to communicate with each other.
It would also be wise to review the process you’ve used previously to introduce technology. Was the implementation successful? Did it achieve your goals and were the benefits realised? Use the lessons learnt from these experiences to inform your new strategy. Avoid making the same mistakes and give your digital claims strategy the best chance of succeeding.
Successful implementation of your digital claims strategy depends on getting your IT and claims departments on board with the changes that will implement and maintained. This is a critical as both need to fully engaged behind the digital transformation - this is often the difference between the success and failure of your digital ambitions.
If you have a solid digital strategy in place, the right technology is a tool for bringing you closer to meeting your overall business objectives. However, it's not a complete solution. If you’re interested in exploring how to leverage digital to improve your claims experience and deliver efficiencies, join us at Digital Claims 2020.