In today’s fast-paced world, the management of claims is increasingly complex, demanding, and above all in a constant state of flux. Historically, claims operations focused on costs and efficiencies within the claims operation to manage loss ratios. However, claims today must think further ahead to reexamine the effectiveness and management of the end-to-end claims process, inclusive of external partners. Service excellence, customer satisfaction, and ultimately renewals can be improved and streamlined across the entire process, but that cannot happen without the rethinking and redefinition of claims management.

Claims transformation is bigger than modernization, encompassing changes to the entire claims business model and philosophy rather than simply the day-to-day processes of claims operations. Transformation touches all areas of an insurer’s business, establishing an organization with the right skills to support the new technology and vision of claims, the business capabilities that support the elevation in services, the redefinition of risk management, and the technology that supports – and takes advantage of – the continued advancements in the market.

Claims is the moment of truth for insurers, where they deliver on their promises to policyholders, not only in terms of restoration but also customer service. It’s no wonder that J.D. Power’s annual insurance awards focus on property claims and auto claims: those are the interactions that are of the highest value to the customer, and customers’ insurance decisions are strongly affected by an insurer’s reputation for claims handling. How can we, as an industry, remake the claims experience to match, and better yet, exceed customer expectations? The answer we keep hearing is modernization, but the truth is that modernization is more than the application of new technology – it is the application of modern claims systems together with fundamental changes in business processes as well as the integration of new services and data.

The digital revolution is changing what top-notch customer service looks like. As policyholders bring their customer service expectations from other industries, suddenly the old claims process looks very old indeed. Customers expect to be able to find out the status of their claim instantly without navigating a phone tree. They expect to be able to send in a photo of the damage to their car after an accident – and that the adjustor will have examined that photo before arriving to inspect the car. But once Amazon drones are delivering their packages within hours or less, customers will expect something different from the claims experience and ask questions that insurers with claims solutions that were designed with only today in mind will not be able to answer: why even send an adjustor in person? Why not a drone? New technology quickly becomes expected, and insurers that cling to their old way of managing claims because they cannot support mature and emerging technologies will start to lose their policyholders to insurers with the capacity to incorporate the new technologies that we see now as well as technologies that are still beyond the horizon.

Claims transformation, beginning with system modernization, enables the delivery of new value propositions and leading-edge, value-added services that encompass safety, security, protection, mitigation, prevention, and even the elimination of risk.

SMA’s new report, “Claims Transformation: The Journey Beyond Modernization,” shows insurers how the end-to-end claims process needs to change and what rewards they can gain from those changes. For more information, please visit the SMA website, and keep an eye out for more thought leadership on claims management in the coming months. 

This blog entry has been reprinted with permission.

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The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.

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