Shifting customer expectations are creating disruption and innovation opportunities in the insurance industry.
Traditional claim business models are rapidly changing as insurers look to reinvent how they do business. The days of a laborious, bureaucratic process that held up claims for weeks or months on end are giving way to a frictionless, end-to-end experience that leaves customers satisfied, even delighted, with their insurance company. For the insurer, the benefits are no less than improved operational efficiencies that can unlock a competitive advantage and potentially attract an expanding customer base.
A customer-centric claim journey
Putting a customer-centric claim journey in place requires a commitment across teams and an understanding of the part that each team member plays in attracting and retaining customers.
To maximize the return, insurers are making strategic investments to transform their traditional model into a service-oriented claim model.
According to the customer service statistics taken from the “State of the Connected Customer,” compiled by Salesforce Research in June 2018, 80% of customers say the experience a company provides is just as important as its products or services.
There is little mystery why the claim experience has such outsized importance to customers. Put simply, it’s the moment of truth where insurers have an opportunity to deliver a compelling customer experience and build trust in what ultimately influences whether a customer stays with an insurer, or looks for another.
This is all happening as customers, who are increasingly comfortable with technology, expect more. The claim journey requires rapid advancement of claim capabilities to meet these rising expectations. Yet many insurers still concentrate much of their digital investments on front-office functions such as product development, and sales and distribution. All the while, comparatively little attention is paid to core office functions such as claim management.
There are signs, though, that insurers are recognizing the value of improving claim management to support their business objectives and capture even greater value across all areas of the business.
But make no mistake: Getting there is a challenge.
It requires reengineered processes and significant investments in new technologies that in the end keep customers consistently informed about the status of their claim. Only then can the investments in new workflows and automation realize full value potential. The alternative—a customer waiting for weeks with no update—is no longer acceptable in a world defined by the Amazon one-click experience.
It takes a full commitment. Digital improvements such as an enhanced user interface and a seamless experience may not generate the expected return on investment if a prevalent digital approach is not infused with reengineered processes and streamlined workflows.
Each customer touchpoint, even before the loss occurs, should have the right blend of meaningful human interactions and automation to increase efficiency, reduce operational costs and deliver exceptional services.
Part of the challenge for insurers lies in dealing with outdated systems and technology, and even reluctant employees. Insurers may have multiple legacy systems and complex batch architecture with ad hoc workflows. And some workers may not be as willing to embrace, or be nimble with, new technologies.
But it is possible. Consider the five distinct perspectives in claim management that RSM has identified:
- Value: Does claim management receive appropriate value in terms of cost and performance?
- Feasibility: Are processes and workflows predictable, structured and easy to follow?
- Capability: Does the claim operation have the right people and technology to operate efficiently?
- Alignment: How do you position the claim operation and information technology as collaborative business partners to realize the full value potential of the business objectives?
- Innovation: What is the plan to expand digital and cognitive intelligence capabilities, including connectivity to legacy platforms, to stay competitive in the digital economy?
Customers are increasingly accustomed to a seamless technological experience. They see it every day when they buy from Amazon, or watch a movie on Netflix. And they are applying that same standard to getting a claim paid. For today’s insurers, enabling a customer-centric claim experience is not a choice. It is a necessity.