Altus Insurance whitepaper spreads - Flipbook - Page 17
“There are broadly two
approaches to digital
transformation - you go green昀椀eld
with an adaptive core platform
to deploy new brands, products,
and services faster, and be willing
to try, fail and learn fast, or you
try and connect best-of-breed
solutions to a legacy platform, but
su昀昀er slower innovation cycles
and falling behind.”
Mike Daly,
Growth & Development Executive, RightIndem
There is no denying, however, that this is a large-scale
change, and with that comes a tendency to take the
easier route by basing the requirements on existing
functionality, rather than replacing and migrating
across. This may answer the immediate questions of
today but does little to take the business forward.
Any insurer hoping to make their claims experience
a point of di昀昀erentiation, needs to be thinking about
how they can rationalise their estates and develop
flexible models that enable them to introduce changes
in functionality without major upgrades in the future.
The impact of AI
In the dash for digital transformation, many are
looking to arti昀椀cial intelligence (AI) to turbo boost
their capabilities, automating lengthy administrative
processes and increasing the ability for customers to
self-serve and manage their claims.
But despite the acres of column inches dedicated to
the use of AI in insurance, most insurers (and indeed
昀椀nancial services 昀椀rms) have struggled to get a real
handle on their own data, the vital raw ingredient of any
AI system. This is due to the volumes of unstructured
and o昀琀en incomplete data and the complexity of their
IT estates, as well as a lack of clear data management
principles and governance in action.
The prospects of what AI can deliver are certainly
encouraging and exciting, particularly the
incorporation, where appropriate, of generative AI
such as ChatGPT. There are risks around accuracy of
responses, the potential for bias and data privacy, but
the technology has considerable potential to transform
customer-facing services, and whilst we are still at the
early stages, this technology should not be ignored.
Before any insurer dives into the world of generative
AI, they need to consider the ethical implications and
inherent risks of using this type of technology:
• Are the outputs su昀케ciently accurate?
• Does it carry in-built biases?
• Does it limit the application of creative, human
thought?
Decisions on AI must be made with a full
understanding of risks and bene昀椀ts as well as a
technical understanding of how and where it could
be applied to secure the greatest bene昀椀ts for
customers and, ultimately the business.
Fighting fraud in the future
Digital transformation in claims is not just limited to
insurers, the world of insurance fraud is increasingly
powered by the same digital tools and techniques
insurers have at their disposal. Indeed, the
introduction of self- serve process could well create
new opportunities for fraudsters to exploit, and so
fraud controls also need to be redesigned.
The industry has made great strides over the last 20
years in combatting fraud, coming together to share
data and tactics to ensure that the actions of the
criminal minority don’t impact the experience of the
honest majority.
As laudable as these e昀昀orts are, the pace of change
in the world of fraud is as fast as anywhere else in
the sector with insurers challenged with limited
budgets and resources. Therefore, when insurers are
considering transformation in the claims arena, it is
essential that anti-fraud processes, technology and
measures are baked into any digital or operational
change.
A piecemeal approach to transformation, looking at
one discreet area at a time, will ultimately lead to a
piecemeal experience for customers and a fractured
approach to identifying and tackling fraud. A longer
term, strategic process-led view of the whole claims
operation, and its transformation, is essential to
ensure the security of the business, reducing leakage
and ensuring that the experience of the honest
majority is kept at the forefront of priorities.
“Insurers cannot under-estimate
the capabilities available to
fraudsters, who are o昀琀en one
or more steps ahead in their
use of emerging technology.
Consequently, optimised fraud
management processes and
cutting edge technology should
be central to a future claims
operating model.”
Mark McDonald,
Altus Consulting
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