Digitalisation is enabling claims departments to improve the customer experience

[This article was first published on INESE.ES on 11 January 2022]

Digital transformation is already influencing the way claims are handled, especially for high frequency and low complexity claims. Increased automation is improving claims reporting processes and making it easier to compile documentation and information. As we move forward new technologies will continue to enable better insight into underlying trends and help our clients mitigate risks in the first place.

These aspects, according to Susana Sanchez, Claims Specialist at Liberty Specialty Markets, affect claims handling, "making processes increasingly efficient, thus improving the quality of service provided and the customer experience. "The speed of processing and settling these types of claims, when done well, benefits both the customer and the insurers," she says.

Sánchez explains that better data capture, both in the initial notifications of claims and during the development of claims management, will mean more and better quality information. "However, as the complexity of claims increases due to their nature or amount, more specialised management is required and the level of automation is limited, making the intervention of the human and emotional factor essential, making it essential for insurance companies to have processors with great technical knowledge”.

In her opinion, among the main challenges they face in claims handling, especially in those of medium and greater complexity, "more and more knowledge and technical capacity is required from claims handlers". Besides this, the correct use of technology, taking advantage of its benefits, and customer service are key.

At Liberty Specialty Markets, our claims service is built on a simple principle: we aim to deliver superior value by supporting clients at every stage of the relationship.

Liberty Specialty Markets has a claims department whose service is built on a simple principle: we aim to deliver superior value by supporting clients at every stage of the relationship. To this end, we have specialist claims teams in 30 offices worldwide who are empowered to make decisions, while being supported by formidable global resources. In Spain that team is led by Ainhoa Tricas Spìteri (Claims Department Manager).

In this article Susana Sánchez (Claims Specialist, Spain) reveals how digitalisation and new technologies will evolve the claims service, "making processes increasingly more efficient, thus improving the quality of the service provided and the customer experience".

Key to this will be, among other things, significant investment and ensuring that all change, digital or otherwise is customer led. “While we increasingly automate our processes, we must maintain our knowledge and the technical skills that will always be required of claims handlers.”

All this points to a new role for claims and a more varied role for claims handlers. Increasingly we’re seeing an expectation from brokers and customers that insurers will provide a long-term client care solution that goes beyond the initial binding of a policy, or renewal. Claims professionals are perfectly placed to step into that role by streamlining end to end processes and focusing on risk mitigation as well as claim response.

What is Liberty Specialty Markets' current offering for the Spanish market?

The platform for our business in Europe is Liberty Mutual Insurance Europe (LMIE), which operates under the Liberty Specialty Markets brand name. Our product range extends from the most classic to the most innovative coverages.  Our insurance products are targeted at the industrial, construction and service sectors and are distributed through a select network of brokers, with a wide range of products in several lines of business, Accident & Health, Art & Private Clients, Construction, Contingency, D&O, Energy, War & Terrorism, Financial Institutions, Environmental Liability, Professional Liability, General Liability and Transport (Marine Cargo).

In the near future, what changes do you see in claims handling and will they be caused only by digitalisation?

Indeed, digitalisation and new technologies are undoubtedly one of the factors with the greatest impact. Digital transformation has become a necessity, and the pandemic has increased the speed at which companies are implementing digitalisation processes.

In the near term we expect to see:

• Continued acceleration of the use of artificial intelligence as a mechanism for obtaining claim information, eliminating human interaction in those tasks where it does not add value.
• A segmentation of claims service aligned to customer need where low complex, high frequency claims can be automated and,
• A continued focus on risk mitigation rather than mere risk transfer, with insurers increasingly focused on the customer experience.

Digital transformation is not about cost savings.  At Liberty Specialty Markets, we are investing in technology to better understand risk, enabling us to identify emerging claims trends much more quickly and help our clients mitigate the risks they face.

We want to make our data a useful and valuable tool, in the sense that it can explain to clients the existing risk factors and how their loss ratio would improve if those factors were modified.

The paradox is that in a world of more data and automation, the value resides in the people behind the service. At Liberty Specialty Markets, our claims specialists are committed to adding value to our customers at all stages of the relationship and understand the importance of communication, bringing empathy to the situation to help our clients when they need to make a claim.

All these changes affect claims handling, making processes increasingly efficient, thus improving the quality of the service provided and the customer experience. The speed at which we can do this and the journey we go through to settle our claims, when done well, benefits both the customer and the insurers.

More specifically, how do you achieve the improved service you are talking about?

Improved data capture, both in the initial notifications of claims and during the development of claims management, will mean more and better quality information. 

We are aware that, as the complexity of claims increases due to their nature or amount, more specialized management is required and the level of automation is reduced.

For this reason, it is essential for insurance companies to have claims handlers with great technical knowledge, with the ability to understand the client's needs, and to provide, in accordance with the terms and conditions of the policy, a professional response when the claim occurs.

How will claims handling models evolve?

We believe claims service will become increasingly segmented to suit customer needs. In the coming years, we can say that we will find distinct models of claims management: an entirely digital management (in those claims of less complexity and small amounts); a mixed model of 'digital-human' processing in those of medium complexity; and a processing in which the intervention of the human factor is essential and predominant, with technology being an aid to it (those claims of greater complexity).

It should also be noted that there will be more and more interaction between brokers and policyholders in insurers' claims management software. It will be possible to eliminate duplication in the management of claims throughout the life cycle of a claim if interaction between the different claims management systems is possible.

Digitisation and new technologies will allow insurers' claims departments to focus on the most complex claims and spend more time on improving the customer experience and service provided.

In the coming years, efforts in customer service and the increasing sophistication of technology will be the two defining factors in the evolution of claims department staffing compared to today.

What should the guidelines be to follow in this evolution of systems?

The digital transformation must be carried out in a secure way, as we cannot forget the importance of the fight against fraud. Advanced data analysis and artificial intelligence must be used as tools to help detect cases of fraud, improving process control and thus strengthening the fight against fraud through innovative mechanisms.

Nor can we fail to mention the great impact of new technologies on the current and future ways of assessing claims by third parties involved in the management of claims, especially in the world of loss adjusting. Increased use of mechanisms such as satellite imagery and drones, virtual reality, and video loss adjusting, etc. will help us reduce claims handling time, allowing immediate interventions, helping to reduce travel and costs, speed up the issuing of reports, aspects that have a great impact on the speed of claims management resolution and therefore contribute to improving the experience and satisfaction of customers.

Thanks to the collaboration of specialized companies, we know immediately after a catastrophe which customers have been affected and how. This enables us to better allocate resources and respond more quickly.

As we have already mentioned, it will continue to be very important to maintain a more traditional and face-to-face system of expert intervention in those claims of greater complexity and which require the intervention of highly specialised technicians and in which the accompaniment of the insured in the face of a claim, which is a situation that can be destabilising, is of great importance.

Other factors that will also influence the processing of claims is the fact that insurance companies will increasingly focus on the prevention of claims and try to reduce the seriousness of the same, which will lead to a reduction in certain types of claims that are frequent today. However, on the other hand, new types of claims will emerge due to the appearance of new insurance products adapted to the new needs of customers, the entry of new sales channels (e.g. embedded or integrated insurance), which implies the need for rapid adaptation and updating of claims management mechanisms.

From your point of view, what do you see as the main challenges associated with claims management?

Some of the main challenges we face in claims management, especially in medium and more complex claims, are the following:

• The key is the ability to adapt to new ways of working and the correct use of technology, taking advantage of its benefits but without forgetting other factors. It is not so much a question of replacing old systems and processes, but of using new technologies and data correctly and efficiently to create work systems that optimise processes and in turn satisfy both insurers and clients.

The challenge is to find the right balance between the application of new technologies, digitalisation and the importance of data with the indispensable and essential intervention of the human factor (technical knowledge, intervention of experienced professionals, personalised attention, etc.), which is, and will continue to be, necessary and so highly valued by customers.

• In connection with the above, customer service is becoming increasingly important, not only in terms of all the parties involved in the claims management cycle (broker, loss adjusters, lawyers, insurer) but also in the overall experience with insurers.

We are experiencing an increase in the level of demands required during claims management, especially in terms of deadlines and immediacy of responses, which, among other aspects, can make it difficult to meet customer expectations and therefore achieve customer loyalty. Offering top quality customer experience is what differentiates one insurer from another.

• Increasingly greater knowledge and technical capacity is required of claims examiners, making constant and continuous training and the development of new processing skills very necessary in order to adapt quickly to the new needs of clients and the evolution of traditional products, as well as to have the necessary knowledge of new products and new types of claims.

In this sense, it will be increasingly necessary to have a network of collaborators with great experience and technical knowledge (as is the case of loss adjusters and law firms) in order to achieve the appropriate management of claims, taking into account the increase in complexity and specialisation.

• Although it already exists today, the importance of everything related to the impact of climate change will increase and, of course, we must pay special attention to the growth in number and severity of claims related to cyber risks, which implies the need to adapt insurance products and a major challenge in the management of these claims. Likewise, we cannot lose sight of the increase in claims related to companies' compliance with environmental, social and governance (ESG) criteria.Global awareness of these aspects and interest in companies' environmental policies, commitment to society, the impact of the company on its social environment, and corporate governance (such as diversity, transparency policies in public information) will continue to grow.

What are the main strengths of your claims department?

We understand that claims service doesn’t begin when a claim has been made. It’s much earlier. We provide a service from even before a client has a policy with us, and offer value add services throughout the relationship. 

If a claim is made, the ability to handle a claim becomes a priority for us, and we act early to provide our clients with the appropriate solution to protect their interests.

We are committed to working proactively and closely with underwriters, brokers and policyholders to ensure that claims are paid fairly and providing the highest level of service at all times.

These are the principles of our service: