Key Takeaways:
- Customer Experience Differentiation
- Delivering Outcomes in an Evolving Employment Landscape
- Digitizing the Claims Ecosystem
Andy Hutchinson (00:10):
I have a panel of one today, so I hope this goes well. I actually brought a presentation so it wouldn't be quite so awkward, me sitting here by myself. I'm going to talk about combining people and technology to reimagine the claims process. I am Andy Hutchinson, Global Head of Transformation for Crawford Platform Solutions. We are a claims services business, providing claims services for carriers, TPAs, workers' comp, disability, P and C, the whole gamut. But today I'm going to talk about change management a lot. So I love coming to conferences like this because when I introduce myself and I talk about being the Head of Transformation, people here think that's cool. Generally everywhere else they ask, what does that even mean? What do you do? I don't get it. So I typically jokingly say I'm the one that shows up in a meeting and everyone gets nervous or upset because I'm about to change something. They want to know what process you're going to screw up now. So a lot of jokes happen. We generally get good outcomes, but sometimes it's painful. I think if anyone here has worked in innovation or you have worked in change management or anything like, it's really difficult, but the pandemic happened. So rewind two, three and a half years, which is almost impossible to believe. And if anybody's worked in that change management space, imagine yourself in January of 2020 and you start putting together a new project. You have your kickoff meeting, your stakeholder meeting, the C-suites there, all the SVPs. Everyone's there to make decisions about how do we kick this off? And you start your meeting and you say, okay, the project is we're going to send everyone in the organization home. And everyone's, once they wrap their heads around that, they start thinking, okay, we need a contract with this organization, this vendor. We need to have this in place. We need to have that in place. IT security is trying to figure out how do we make this possible? How do we make it safe? They start thinking through all of that. Next, they say, okay, what's our timeline? What are we going to roll this out? 18, 24 months? Actually we're going to do that by the end of the week. And everyone laughs and says, actually, it'd be better if it was in the next two days, but we'll give you until the end of the week. So you can imagine when everyone is aligned, everyone is motivated, all priorities are set. Change can happen extremely, extremely fast, but only when that happens and that that's the challenge in change management transformation is how do we move things forward and make it as painless as possible, but also get through the red tape, get through the roadblocks. So I start off with that to kind of set the stage as we go forward.
(03:28)
But what I'm going to do is I'm going to start talking about what's happening in the industry, what's changing in insurance, and then I'm going to talk about how we see a shift in the claims world. So what's changing according to claims because of these changes in insurance? And then how are we as at Crawford as a company, how are we working through those challenges? So first, the world's becoming risky. It's no secret. So these are very, very common headlines you would see in the papers. 150,000 acres in three states burned, 1 million Covid deaths five years after Hurricane Harvey. Many people in Houston are still waiting to have their claims settled. Half a trillion dollars spent on hurricanes and tropical storms since 2016, and I will point out you can't see it at the bottom. That's a 2022 stat. So did not take into the account the storms at the end of last hurricane season. So even bigger. So some of the numbers. So 21.9 billion or million acres burnt in the last three years, 500 billion in damages from hurricanes, tropical storms. So again, not inclusive of last year. Again, increasing global ransomware, 20 billion in the last 12 months, 5 billion in insured losses just from tornadoes. So an astounding amount of risk, lots of dollars going out the door. No matter how good we are at underwriting, the risk is out there and it's increasing. Here's another thing that's happening. The risk tolerance is increasing. So not only is it getting riskier, but people are more willing to go and live in the riskiest of areas. 40 million people since 1960 to 2008 moved to coastlines. 70% of Californians live within 30 miles of a fault line. Now, I don't think that any of these are secrets. I think it's known that everyone's moving in these directions, but I think some of it, it's fascinating the way that we watch storms and we see these impacts happening. So I was thinking to myself as I putting this presentation together, and I started thinking back when and the early nineties, hurricane Andrew, I was a kid. I thought that was really fun because Andy had a hurricane that had the same name. Catastrophic storm, had some of the worst losses ever recorded. But how did we follow that storm in the early nineties, probably newspapers, the local evening news, the world news. At the end of the day, there was no 24X7 news cycle at the moment. Now we can start following a storm as soon as it comes off the coast of Africa. We're following it all the way across, seeing how it develops. We know how big it's going to be. The 24X7 news channel probably has an infographic at the bottom saying what the category is when it's going to hit, shows the cone, everyone's watching. Then you start seeing the devastation. Everyone knows, okay, landfalls are coming. We're watching it like it's a soap opera. Eventually you have Jim can Tory out there chaining himself to a street sign so everyone can watch and he can convince people it's too dangerous to be here, even though he's standing right in the middle of a hurricane, basically proving you can stand in the middle of a hurricane and be fine. And all the while there are people watching that coverage and thinking to themselves, I want to move to Florida. I'm going to go buy a new house after that's over. So how do we in the insurance business respond to these types of risks? The other thing that's happening, and because of everything I just discussed, claims are coming in more and more. So just from Harvey, Irma and Maria, 2 million claims that's just in one year. Now, as Crawford, we sit in a very unique place in the claims lifecycle or the insurance life because we set between carriers and their end customer. So we have to be very careful and very methodical about how we treat customers because as someone pointed out yesterday, very often the first and only time a policy holder will interact with their care with their insurance carrier is after a claim. So if we mess up, there's a very high likelihood that you might lose a policy holder. So it's very important for us to take care of policy holders for our clients, and that's why we view every claim as a life waiting to be restored. That's one of key values at Crawford and leads everything that we do in the way that we make decisions. So because of all this change in the insurance industry, what's changing in claims? So I have a graphic here and I, I've used this for a couple of years and if you notice quickly, I'm not sure if it's legible for everybody, but I'll cover it at the top. You see present in the middle 2020. So I left it like that on purpose, and I, I'll tell you why in just a moment. So we see a massive shift in the way we're handling claims now. So Crawford, 80 plus year old company, traditionally field adjusting. We are a traditional company. We have been in the past, we've been at it for a long time. In 2000, 80% of claims were handled the traditional method, meaning boots on the ground. So when knocking on your door, an adjuster taking care of that claim. Now that means all claims. It could be a very simple claim if we're in a let's just go to the most extreme South Dakota, Wyoming, someone's fence got knocked down. It's a claim. They have insurance, it has to get fixed. We might have paid someone to drive five hours one way to take three photographs, to write an estimate. That's very minimal, very expensive. You're also seeing contractor networks. So managed repair networks in 2000. Were still a very new concept, very small piece of that pie, 2% fast track desk, mostly autos at this point. So we're moving away from the appraiser model. So fast forward to 2020, only a 10% change in traditional, very minimal contractor networks have now grown though. So managed repair has become a much bigger thing. There are lots of competitors in that space now, very lucrative, but you're also seeing something new, virtual and on demand. So now there are inspectors that you can get an on-demand gig economy, new tools, new virtual ways of getting measurements and documentation of a claim. And here's why I left it in 2000. Obviously everyone knows what happened. In 2000, we had a pandemic, and to my story just a moment ago, we very rapidly could send everyone home in the whole country, maybe even the whole globe.
(11:32)
That number in 2000 was correct or 2020 was correct. Three months later, that number was not correct. We immediately started sending virtual adjusters. We were minimizing the amount of people that went inside homes. We started using all of these different tools that we had wanted to use for a long time, but never could get over the hump because there was resistance. But now all of a sudden you have to do it 2030. I think these numbers probably hold still, but I bet that we are probably well past 70, 80% of the way there, even though we're only three years into that 10 year span. A recent client of ours that is using the methodology that I'll discuss in just a moment, we are seeing now that we're pushing about 33% down virtual or on-demand services, roughly 33% to contractor networks and then about 33% are still staying traditional. So we're getting really close to that number already. So what are we doing in response to this? So like I said, obviously Crawford's an 80 plus year old company. We've always done it through traditional way. So we're kind of at a crossroads here. We have a choice. You, you're either the disruptor, which we hope to be or you're the disrupted it. It's the only two choices. When things change, you change with them or you are left behind. So the three things I'm going to talk about, so involving employment landscape. So obviously now people want to work where they are. It's no different with adjusters. Adjusters do have to be in the field, but everything is moving to desk. Very, very heavy dust presence now, almost to the point where people only want to work desk now. So we have to figure out a way to make that easy and transparent. Customer sophistication. Our customers are now more willing than ever and have the ability more than ever to use these tools to use self-service, to use digital communication channels. Now, we do get a lot of pushback there because people say, my grandmother still has a flip phone. She won't do that. My mother doesn't. She doesn't have an iPad or she would never do this because insurance, she pays for it. She wants somebody to do it for her. So I have a quick story. So probably in the last nine months, my mother sent me a text message, a very basic question over a weekend. So to be a good son, I thought I should give her a phone call because that's what you're supposed to do. And very quickly after I made the phone call one ring to be exact, I was sent directly to voicemail and she text me right back and said, what do you want? Well, you asked me a question and I was trying to give you a phone call, but she didn't want a phone call. She wanted a text message answer because that was quicker, faster, and easier, and that's what she wanted. Similarly, my wife's grandmother, you will not get a response from her in any other way than sending her a text message to her iPad. It's the only way, and she's in her mid eighties. If you ask her what she's doing, she will take a picture from her iPad and she will send you the picture. She will not tell you what she's doing. She just takes a picture of what she's doing at the moment. So I don't buy, I'm certain there are people that would not and do not want to do it, but I don't buy the, they're too old anymore. Again, the pandemic forced that to happen. Lastly, digitizing the claims ecosystem. We have to make the whole cycle easier, better, more efficient for the policy holder, for the adjuster and the carrier. So our response to this is we had a methodology and a philosophy called true Look, this was our pre pandemic method. We decided we want to put claims in the right place at the right time as often as possible. So how do we decide what claim goes where? So we have a triaging process. Now, when we think about triaging claims, You have to imagine two overlaying spectrums. Okay? We have one that is very low severity, low complexity on one end, high complexity, high severity on the other end. So you imagine someone's backed into your mailbox and they ran off, so you have to take care of it yourself. The right end is a total loss fire. Similarly, the overlaying spectrum is convenience and speed on the low severity, low complexity end, and empathy on the other. Everyone talks about empathy. It's very, very important. We talk about it constantly with our adjusters. We have to take care of customers. Just to my point earlier, if we don't take care of the carrier customers, we don't have a customer. But if your mailbox was run over, if I can get you to snap two photographs of that and I can determine that it was brick and it was this many and it was this tall, I can probably adjudicate that claim and have a digital payment in your account by the end of the day. I don't want empathy. I want my money. Of course, if there's a total loss house fire, they're trying to figure out their life right now. They have contents claims, they need lodging. There are a million questions. There are a million things that they need help with, and our adjuster will be the person to do that. They will be taken care of. We would never send that person a text message because that makes sense. The question is, what do you do with all the things in the middle? How do you figure that out? So what we've done is we immediately send out digital text or anything that we triage out that's not super severe, we will send out a text message letting them know we have their claim, making sure they know there's a phone number, someone they can reach immediately. But hey, can you click this link and give us some additional information? They go into a web experience. So we're not asking you to text one for yes, two for no. We don't ask for communications back in text. We get very specific answers. So we want good clean data to make good clean decisions. So you probably can't read this, but this is based off of a water peril. So we ask very specific questions and very few, if we have a water loss, is it leaking right now pretty valid? If not, how many days did it start in the second first or basement of your house? How many rooms? What are the what materials that have been damaged? Pretty straightforward. We'll take that data and we will make a triaging decision based off of historical data and we'll send it down a different path. We also can ask them for photographs immediately if they're on site so we can make a really good sound decision of where this should go. So if we're ask, again, if we're asking customers to go through this process, we have to create a great customer experience. You cannot force people down a digital only path and still ignore the customer journey. The customer experience actually maybe even more important here because you're already asking so much of them. So here we're tracking all of our communications. I can see every time a communication goes out, it's tracked. I can see when they click the links, I can see when they responded. I know everything that's going on with these communications. Now, again, we don't force anyone down this road. If we send a digital communication out and they don't respond, we might send a nudge once, Hey, we sent you a message. Could you respond? If they don't, within a certain number of hours, they off ramp. We pick up the phone, we call them, we go back to the traditional methods, and if that's what they want, that's what they want, it's fine. Very often when they answer, they say, I'm sorry, I would've text you back. I just forgot. We walk them through the triaging process on the phone. We remind them that we will be continue to send them text messages to update them constantly throughout the process. They're usually very thankful and willing to communicate that way. We do not hide though. We always put the phone number or they always have an email address. They know who their adjuster is. If anything changes, they're updated constantly and very often people appreciate that. So for the adjuster to make things easy, once we triage, we decide does it go low severity, high complexity. So the two I described earlier, self-service on one end on demand. So you think Gig economy type workers that can go out and take photographs for you and roof inspectors that aren't adjusters, but they can climb a roof, they can do a roof inspection, they could be there much faster. So you cut down cycle times. All of these are built in, so the adjuster doesn't have to go to a portal, he doesn't have to make an email address, he doesn't have to call anyone. He just clicks create order, and it sends it to that downstream partner. Now, if you can see, some of these are Crawford, Crawford businesses. They're not all, and we are agnostic. We work with everyone and anyone that's willing and able to connect with us, we connect with them, but we provide a great deal of transparency for that adjuster because that helps them. You can't ask a person to change completely, change the way they do their job and make it more difficult. It will never work. So if you have to make it easier, you have to make it intuitive.
(22:01)
So this is our process. So what I've basically been describing virtual examiner in the middle, all of these different ways to pull information from out into the world. They're looking for, like I said, managed repair, self-service, quality assurance networks. All of these things are coming in and out constantly. The adjuster has great transparency into the claim, and this all creates a faster lifecycle. So better cycle times, people getting paid faster, the QA is automated. So we're very quickly getting an accurate estimate. So we're not overpaying, we're not underpaying. We're greatly reducing the administrative workload on the adjuster, which is in our world and everyone's is. If I can increase productivity just slightly, there's great impact, particularly when you're seeing so many more claims come in and no end in sight. Or even if you imagine in a catastrophe situation where resources are quite limited and everyone's fighting over the same people, you can almost cut off these low severity claims on the fringes and let adjusters really concentrate where you need their expertise and you need their empathy where they can go and take care of your customers and do the best job and the job that they've been trained to do. Frankly, additionally, you're saving money and you're reducing leakage so paramount in making a process this work. And then lastly, of course, because the homeowner is constantly being updated, it, it's a better customer experience. I saw a study, and it's been a few years ago, but the Domino's Pizza tracker, everyone's heard of that. It's been a kind of buzzword in the insurance world for the last several years, and it said some this, I think three years ago. So it said under 30. So now it's probably people in their mid thirties on average from a 30 minute pizza delivery. We'll check their pizza location 20 times. I mean, it's hard to believe, but they want constant updates. They want to know where everything is all the time. No, no waiting. If you were over 40, you click it once there's so that much of a drop off because after 20 minutes you might think, I wonder where that is. You click it once, okay, it's on the way already. I don't need to check again. It'll be here soon. There's such a change in the demographics of what customer experience is and how we deliver that. Then that, and that's why we have this constant text communication. So some of the ways that we're trying to approach this again, is we're leveraging technology and people. We don't think people are ever going to go away. They're always going to be part of this, but technology is rapidly, rapidly increasing. So computer vision, all the things that we've seen, the taking photos to get measurements through either self-service or use by an adjuster on demand services. So again, utilizing inspection networks on demand gig economy, these are all ways to get the inspection from the field that the desk adjuster needs, but in the fastest way possible, but also still maintaining that quality. So I have just a couple minutes left. This last slide is really, this is what we live by right now. So digital is one of our strategic pillars, as we call them at Crawford. I started off in the strategy division at Crawford, so I still follow this stuff pretty closely, but this is what we're trying to do. We're trying to reimagine and simplify claims because all of the annoying things that we think we can fix, we really want to try to do that. Just a few minutes left. Hopefully we have at least a couple questions, and if not, I'm happy to talk to anyone about any of this stuff later.
(26:36)
All right. I must have done a great job. All right, well, everybody gets to go to lunch few minutes early. Like I said, happy to talk to anyone later, but if not, thank you for your time. I enjoyed it.