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Four Ways How Technology is Transforming Insurance

By Chris Holcombe, VP, Group Claims Technology & Operations, Chubb And Bill Turnbull, SVP, North American Property Claims, Chubb

Chris Holcombe, VP, Group Claims Technology & Operations, Chubb

One of the key drivers of technological disruption in the current era is the ability to fulfill client expectations by creating a user experience designed to be frictionless, instantaneous, and mobile.

And while some might view insurance as a staid industry, it is adapting with a client-first focus.

Just during the last year, we had seen a tremendous change in how the insurance industry uses technology to interact with its clients, business partners and employees, and improve the claims management process. Four areas in particular stand out: communication channels, artificial intelligence and machine learning, predictive analytics, and cloud computing. Communication Channels Technology has provided clients with optionality when engaging with service providers, and has allowed businesses to automate workflows and optimize business processes. Insurance claims are no different. In recent years, the industry has begun aggressively investing in infrastructure capabilities that appeal to its client base in a differentiated way.

Once dominated by traditional engagement models and analog tools such as the landline phone, fax machine and traditional mail, faster forms of digital communication are now being leveraged into the insurance claims process. Email, voicemail, text messages, and social media are now acceptable mediums when handling claims. Despite the fact that technology drives client convenience and competitive advantage, it is important to note that it is not intended to replace human contact, but rather to remain a client option in instances where the client desires to use it.

"Technology has provided clients with optionality when engaging with service providers, and has allowed businesses to automate workflows and optimize business processes"

Digital channels of communication also enable the integration of interactive platforms that present detailed client profiles to better evaluate the services or assistance they may need, the reasons why they are engaging, and when they last engaged. Other advanced tools such as voice analytics can potentially provide insights into client sentiment and satisfaction.

Artificial Intelligence and Machine Learning

Insurance companies are also gaining a better understanding of the value that artificial intelligence (AI) and machine learning (ML) technologies can provide, and have begun actively pursuing AI and ML as areas of investment.

By leveraging AI and the vast amounts of data at their disposal, insurance companies are looking at ways to augment and automate elements of the claims management process, thereby increasing the speed at which claims are processed, and enhancing the client experience.

In addition to pure process automation, more advanced technologies such as virtual assistance, natural language processing (NLP), and machine learning are being used to help manage traditional call volume channels. It also enables greater capacity among skilled employees so that they can focus on client engagement versus information processing.

Bill Turnbull, SVP, North American Property Claims, Chubb

Predictive Analytics

The broader insurance industry is also using the benefits of predictive data analytics in handling claims with optimal accuracy and efficiency.

Predictive analytics has emerged as vitally important in achieving a more complete insurance claims picture, and, ultimately, leading to better decision-making around claims management. The ability to capture and analyze both structured and unstructured claims data in predictive modeling is creating unparalleled operational efficiencies and cost-effectiveness when managing claims for workers compensation, casualty, bodily injury, employment practices liability, and other financial risks.

Given the volume and complexity of data that accumulates as an insurance claim progresses, analytical tools offer a means to distill and assess detailed line-item claim information, identify unrecognized potential claims severity, and help mitigate financial losses.

Predictive analytics can be used to improve the client experience relative to the claims handling process itself. By engaging with data, insurers can determine the best resources to provide the client. This could mean, for example, aligning employees’ expertise with the specific needs of the clients or deploying resources closest to clients’ homes—those with the best service reputation, and/or with the fastest turnaround time.

Cloud Computing

Generally speaking, the insurance industry is increasingly embracing cloud computing.

In order to continuously improve the customer experience, it is important for insurers to be able to make quick front-end changes based on client needs. A cloud-enabled organization is able to take advantage of the cloud’s short development cycles in order to make rapid customer-facing adjustments. Overall, the cloud provides a more modernized technology stack, and may ultimately reduce IT costs.

At the same time, with more client data from all business sectors now stored in the cloud, companies must be more diligent than ever with regard to securing and stabilizing back-end cloud infrastructure. With cyber threats on the rise, we have seen more demand for insurance products around cybersecurity across all industries.

The Future

Digital platforms and capabilities have continued to mature and evolve enabling much more interactivity between individuals and their various service providers, but we are just getting started. As the insurance industry increasingly takes a client-centric view, companies will continue to look more holistically at technology solutions and how they enhance the client experience—from distribution to managing accounts to individual client engagement and throughout the entire claims life cycle.

Regardless of where technology takes us, the insurance business is still one of managing risks and cultivating relationships, both of which still require a human touch.