Steve Paton, Head of Anti-Fraud Services at Verisk Claims – UK & EU, explains that next-generation technology has much to offer both insurers and policyholders, but it won’t paper over the cracks of poor legacy infrastructure. His article is based on a series of presentations at Verisk Vision 2020.
The coronavirus pandemic has accelerated the use of digital technology in every aspect of our lives – from the wide implementation of remote working to large-scale virtual events. In fact, Microsoft recently declared the impact of Covid-19 has led to two years’ worth of digital transformation in two months.
Consumers are more discerning than ever when it comes to transactions, driven by seamless experiences such as Amazon orders – and insurance policyholders are no exception. Expectations have become even higher since lockdown – customers want claims settled quickly and at their convenience. This represents a great opportunity for innovative insurers. Digital technology has become critical to provide core claims services during lockdown. For example, live video enables fast, fully remote assessments – ideal for a lockdown scenario when sending assessors to visit properties and vehicles is not possible. Verisk is at the forefront in this field.
Adapting to the ‘New Normal’
The willingness to exploit next-generation technology has increased for insurers and policyholders alike during the lockdown. Necessity is the mother of invention and this is a golden opportunity for insurers to re-invent the customer journey and adapt to the ‘new normal’.
Lockdown is driving forward-thinking organisations and new market entrants to accelerate digital transformation strategies sooner than planned. It is however vital that insurers push ahead with digital transformation, whether completely overhauling legacy systems to improve efficiency or simply rethinking the automation of their customer journeys.
Organisations that are not yet ready to completely overhaul their systems may choose to adopt a more gradual transformation by injecting a raft of faster available data and intelligence into their onboarding and claims processes to speed up and enhance the customer experience.
Customer-centric technology will come to the fore
The speed and urgency for insurers to do things differently, triggered by the lockdown, has been an eye-opener for the industry. Recent months have proved many companies can achieve significant change and the lockdown period has allowed them to reflect on the processes that slow them down.
For service delivery, for example, the use of image recognition, remote video and drone technology has accelerated. While these tools aid decision-making for insurers, they also offer genuine benefits for policyholders providing convenience and not least the health and safety risk factors they eliminate – invaluable during this pandemic.
Insurers that have recently experimented with leading edge technology are already seeing working practices from a fresh perspective. This could lead many insurers to change and implement a different type of operating model – perhaps a blend of home and remote working – and lockdown has reinforced the notion that these innovations are here not to replace employees, but to add another layer of expertise to enhance claims settlement and customer experiences.
Progress will continue to be made to improve insurance processes – the digitisation of operations and use of data and analytics being critical to this – but customer-centric organisations, with bolt-on services that ensure improved interactive experiences for their policyholders, will be the real market leaders in the future.
Technology breakthroughs mainly point to the mobile device in the hands of the policyholder
This pandemic is forcing all customer-facing businesses to revaluate their modus operandi and will come out of the lockdown with some exciting, disruptive ideas – failure to do so will open the door to a raft of new industry players already emerging. Whether to settle claims or buy insurance, for years, insurers have paid lip service to the use of mobile devices becoming a key factor across the insurance lifecycle. The pandemic has made this a reality.
We can envisage the acceleration of self-service automated intelligent claims as the ‘new normal’ – enabling policyholders to report claims, receive automated outcomes and learn about replacement or repair options all from one device.
New tech means new challenges – combatting anti-fraud in real-time is key
But of course, as technology advances to meet the demands of policyholders who want every stage of the claims process to be a fast, seamless experience, this presents opportunities for fraudsters who are as quick to adapt as anyone. Insurers must stay alert to this and should integrate next-generation counter fraud technology into their systems to protect themselves.
Traditionally a CUE check (the Claims and Underwriting Exchange) is carried out as part of the claims process to clarify whether there has been any previous claims history elsewhere. But this can take up to 72 hours to update, so complementary real-time solutions are needed to quickly identify fraudulent claims which can then instantly be fed back. Completing the quickest possible check and obtaining evidence of incidents across different fields is essential to provide the earliest possible warning of potential fraud before a claim is paid.
At Verisk, we're linking injury claims from one area of our business to subrogation bent metal-related claims across another. Directly linking these two areas means insurers gain the earliest possible intel relating to motor incidents elsewhere, without having to rely and wait on a CUE check. This allows for the fast-tracking of genuine claims. This ultimately can lead to faster settlement of meritorious claims, helping insurers provide the best possible level of service.
Fortune favours the brave
Driven by necessity, lockdown has undoubtably accelerated insurers’ digital transformation strategies, and those that were already further down the road of device-led onboarding and claims services stand to benefit the most as we enter the period of the ‘new normal’.
One of the greatest challenges during this unprecedented period of change will be to remain vigilant against fraud. Faster decisions require access to even faster real-time counter-fraud intelligence and supporting systems of the kind pioneered at Verisk.
Insurance fraud is evolving faster than ever before as fraudsters adapt to the ’new normal’ at speed. The evolutionary battle with the fraudster continues and in these unprecedented times, the race is truly on.