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Evolution or revolution?
Claims has a critical and growing role to play in London market modernisation and transformation. In this TIN report, referencing interviews with stakeholders in the market, our own research and discussions at recent TIN London market events, we look at current progress of Blueprint Two and initiatives such as Write Back, VCS, and Gemini, and ask what direction FAL and the Blueprint should take next. We will consider to what extent customer expectations in commercial risk are being set by the client experience in other sectors, ask whether current efforts to keep pace are sufficient, and explore the kinds of technology insurers and brokers are deploying in order to re-imagine the claims service of the future.
The claims process in the London market is undergoing an unprecedented period of transition. Before the global pandemic, change was already being driven by increased global competition and changing customer expectations, especially around digital, as well as the ongoing market modernisation agenda that dates back to the London Matters report.
There is no doubt that clients do increasingly expect at least some elements of the service they receive to be digital, even on more complex claims. Kim Darrington, Senior Executive for Market Modernisation at the International Underwriting Association, explained that while complex commercial risk clients (like anyone else) have heightened expectations of digital service set by their experience in other sectors, it is not necessarily in the same ways, or to the same degree.
The complexity of the risks and subsequent claims means that “the best experience is not always the quickest experience or the cheapest experience…and there is a respect for that”. She goes on:
“If you take it from a customer experience perspective, they have an experience at the beginning when the risk is placed, and then they potentially have an experience at the end when they make a claim. What they don’t see is the 80% of the entire end to end risk placement and insurance process that is admin in the middle…to them they aren’t going to demand that that process is digital, but they will notice if it is inefficient”.
Many insurers (and TPAs) therefore see digitising processes that clients don’t see as being just as important as improving both the placement and the claims processes that they do: existing and emerging digital technology offers the opportunity to achieve process efficiencies that will improve the customer experience both in terms of digital interaction and processing, but also the speed and convenience of settlement. As a result, leading companies in the London market are already driving through claims transformation agendas in order to remain competitive and keep pace with changing customer expectations.
Many of these companies are composites, whose claims modernisation is much broader than just the claims that go through either the Lloyd’s or the companies market. They are undergoing enterprise-wide digital transformations that will lead to the modernisation of claims service across all business lines, and large complex commercial risk going through London may well be a small proportion of overall risk covered. Therefore, it is unlikely that the smallest element of claims processing will set the modernisation agenda for other larger parts of the business. For these companies, being able to process business through Lloyd’s, and integrate with central market systems and services is an important factor to consider in these modernisations, but it is not the defining factor, and they certainly are not waiting for Lloyd’s to lay out the parameters for a modernisation driven from the centre. For many the time for that has passed, and they are proceeding at full speed with their own transformation agenda, ensuring along the way that they remain able to “plug in” and integrate with market services and systems.
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