In the latest in our series of blogs focusing on data transformation in general insurance we explore the value of data to, and from, claims within the context of a broader data transformation programme.
As discussed in earlier blogs in this series, insurance is ultimately about providing financial protection against potential risks, and in the event of an accident occurring, providing customers the ability to make a claim.
Given this business model, claim costs remain by far the biggest outlay for any traditional insurance company. As a result managing claims spend, both in terms of indemnity spend and operational costs, will always remain a focus when gaining control of the overall cost. It is for this reason that all functions across an insurer have a vested interest in how claims perform and why many areas require access to claims data to support business processes.
The role of claims within an insurance company continues to evolve as insurers increasingly appreciate the act of making a claim represents the most common, and often emotive, interaction between them and their customers. Ultimately claims is the moment-of-truth interaction and has a significant impact on how the customer feels about their relationship with their insurer. If handled correctly claims can have a significant impact on policyholder retention and the level of service that an insurer can provide its customers.
Through the vast amount of data available, insurers now have the ability to drive real efficiencies, provide an opportunity to manage costs and customer demands more effectively. The appropriate use and management of data in the claim experience has the potential to bring significant benefits:
- Improve customer satisfaction – provide seamless customer experience throughout the claims lifecycle with the use of data driven process automation
- Claims performance – manage indemnity spend through insights and analytics to identify cost saving opportunities (e.g. fraud / subrogation identification and litigation management)
- Assess losses accurately – enable more effective pricing through access to more timely and accurate information about the risks covered
- Improve loss reserving – effective management of reserves and capital removing the need for standard reserving models that can overstate the actual liability
- Enable innovation – access to new sources of data disrupting traditional models such as connected homes, cars, and other IoT devices, providing opportunities to prevent losses from occurring in the first place.
In previous blogs we have touched upon the challenges and opportunities facing insurers today when seeking to leverage greater value form their data. It is, however, imperative that an insurer manage this effectively otherwise the opportunities available will remain words on a page (or data in a database).
In order to implement this successfully, consideration should be given to how each business function needs to interact with claims data, removing old world thinking and assess the opportunities available. Without completing this activity an insurer will be restricted in their ability to leverage the richness of claims data available and impact their ability to be truly innovative.
Watch out for the next blog in our series focussing on consuming data through visualisation.