Altus Insurance whitepaper spreads - Flipbook - Page 19
Process thinking vs system thinking
Long term underinvestment in claims doesn’t
just have a direct impact on customers - it limits
an insurer’s ability to e昀昀ect real, lasting change.
Historically, change in claims has been incremental
with the process broken down to its low-level
component parts and opportunities to improve or
digitise processes (and the business cases for them)
also taking place at this level.
Of course, this process does lead to change – we
see that happening across the market – and it does
so in a way that doesn’t break the bank. But any
developments are necessarily limited in scope and,
as a result, seldom result in true transformation.
If insurers can take a step back and pause among the
constant activity in claims, they can ask themselves
a crucial strategic question - what is it that the claims
function, and the wider business, is trying to deliver?
Whatever answer they land upon, the claims
proposition has to be a key element of the wider
strategy and play a core role in any emerging
propositions, such as parametric insurance (nearinstant settlement triggered by an event), extensions
to the indemnity principle, embedded insurance
products and the avoidance of losses altogether.
If there are ambitions to design, improve and launch
products that address real gaps in protection, a
modern claims model, with data, insights and an
understanding of customer needs at its heart, will
play a crucial role in delivering this.
“We may see the personal lines
market start to fragment, with
some sticking to the current
model, those that recognise the
need to adapt to meet changing
customer expectations, and the
emergence of new, digital 昀椀rst
providers providing a genuine
challenge to the incumbent
players.”
“The shape of tomorrow’s market
has yet to be drawn but those that
take a strategic, all-encompassing
approach to technology, will likely
be the ones to emerge as the
future market leaders.”
Mark McDonald,
Altus Consulting
Late mover disadvantage
With the rising service expectations demanded by
customers, the imperative for insurers to move to a
claims model that is focused primarily on customer
experience increases. As we will see in the next
chapter, examples of claims transformation are
emerging which will have a positive material impact
on customer experience and operational e昀케ciency in
the long term.
However, as progress is made, the host of external
and internal pressures bearing down on insurers could
lead to some becoming more risk averse, restricting
their progress or reducing the scope of planned
changes in favour of securing short term bene昀椀ts.
This instinct for conservatism within the industry
is one of the key blockers to true transformation in
claims. The danger is that such decision making
will create a twin-track industry with the di昀昀erence
between those who are investing in transforming
claims and those who are not, becoming clearer as
the years progress and the 昀椀nancial results published.
For those who are reluctant to make wholesale
changes to their claims process, it will become harder
to close the gap. Those who are reaping the bene昀椀ts
of improved retention and expense ratios with the
cost savings passed back through to premiums, will
secure a distinct competitive advantage and emerge
as the clear market leaders.
Jon Cawley,
Head of Claims Operations, NHS Resolution
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