Next-generation capabilities have the ability to dramatically transform the claims process over the next decade. To unlock value, carriers should concentrate on four areas.
Insurers are on the verge of a new era in claims management, one that will be fueled by rapid technological improvements that will provide them unprecedented visibility into the claims process. Every step of the claims process, beginning even before an occurrence, will be aided by a combination of technology and human intervention that streamlines the process.
The fast advancement of next-generation technologies such as automation, artificial intelligence (AI), and advanced analytics has placed insurance industries on their toe, and organizations in the staid insurance market must strategize rapidly to adapt. We chose the year 2030 to examine the future of claims because it is far enough in the future for lofty objectives and new business and operating models, yet close enough to make some confident forecasts.
Customers and employees will experience a different world in 2030, for example, because technology allows for constant networks and accelerates decision-making. So, how does this affect insurance companies?
The customer and workforce demographics will drastically change. Nearly half of the adult population will be millennials and post-millennials (those born after 1997). These digital natives will expect seamless, multichannel, real-time experiences that are connected with the platforms they presently use as well as ones we haven’t even thought of yet.
Carriers will have to strike a balance between the wants of these younger clients and those of the other half of the population: Gen Xers and baby boomers, who don’t have the same digital preferences or skills.
Technology will continue to advance at an incredible rate. Quick data exchange across ecosystems will be enabled via the Internet of Things (IoT), connected homes and businesses, self-driving vehicles, and wearable computers. Insurers will have a better understanding of client risk profiles and behaviors than ever before.
They will be able to detect fraud more simply and amend claims more quickly and correctly. Carriers will be able to intervene at the perfect time to launch marketing, make sales calls, decrease risks, prevent losses, and personalize products and services to fit unique client demands thanks to digital advancements and powerful new analytics.
We can also anticipate very unexpected changes. When disruptors with new business models and value propositions arrived, entire industries vanished virtually immediately, from record and video rental stores to vehicle services. Netflix is only 20 years old, and Uber is only ten years old. Only insurers with an agile culture and operating model will be able to keep up with radical innovation as it advances.
Leading insurance companies will evolve to blend and exploit the greatest elements of both artificial and human intelligence, as well as minimize blind spots in both. We anticipate that humans will continue to play an important role in the claims process. They’ll be able to work more productively and effectively thanks to the maximization of digital enablers and AI.
For example, when a claim is first reported, the most modern carriers will employ advanced analytics to segment and route each claim to the proper claim handler and resolution channel as rapidly as possible.
Routine claims and basic client interactions with predictable characteristics and patterns, which account for around 60% of future traffic, could be appropriate for computerized resolution or management by a “cognitive agent.” The remaining volume will be handled by humans, who will bring authentic empathy and be armed with new tools to handle the most complex claims and customer interactions requiring nuanced judgment.
Likewise, cognitive “whisper agents” tools that deliver pertinent information to assist agents can guide complex claims handlers through their customer contacts automatically. Adjusters can use analytics-enabled dashboards to quickly diagnose claim outcomes and provide consumers with the next actions and resolution options with this help. Medical treatment analytics can alert an adjuster to the fact that a worker’s compensation claimant has not finished some required treatments, leading the adjuster to contact the claimant and notify the customer.
Customer- and internal-facing cognitive agents have the potential to cut claim-processing times, minimize areas of friction between claimants and insurers, and even assist businesses in lowering adjustment costs while assuring the most accurate claims management.
Insurers may set themselves apart from the competition by reinventing the claims customer journey from the ground up, starting with allocating 20% of claims organization resources to claim prevention rather than traditional claims management. Customers and would-be claimants will be alerted to hazards using telematics capabilities combined with linked devices (such as health monitors, wearable sensors, and mobile apps).
Sensors in buildings, for example, will inform building owners and insurers when internal temperatures drop low enough to freeze pipes, and integrated smart thermostats will immediately crank up the heat.
Smart homes in hurricane-prone zones will automatically deploy hurricane shutters in response to weather signals received by the insurance plans. Similarly, in the manual labor workplace, sensors placed in workers’ clothing and telematics devices in machines would detect long periods of work and advise the casualty insurers to take breaks to stay attentive.
When she leaves a “safe zone,” sensors monitoring her movements will send a warning, which will automatically stop her machine, preventing damage. An organization might install new flooring that changes color when wet, based on the advice of an insurer, to indicate hazards that could result in accidents.
Reduced claims would significantly alter insurers’ relationships with customers rather than interacting solely after accidents or losses, customer service and insurers will collaborate to prevent losses.
Leading insurers will follow a similar procedure, whether they are well on their way to modernizing the claims journey or are still in the early stages. They will assess their capabilities and make key investments to enable them to outperform competitors after expressing their Claims 2030 vision. Successful carriers will recognize the changes that must be done in order to rethink the claimed journey, as well as the roadblocks that must be overcome.
There are many unknowns ahead, but carriers who take the essential actions now will be in a better position to respond and modify as things change.
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