Skip to Main Content

Love Thy Frenemies: 3 Reasons an Interconnected Claims Network Benefits the Industry

This article was originally published by Carrier Management on July 20, 2023.

Coming off the worst underwriting performance in over a decade, the U.S. P/C insurance industry continues to face significant headwinds that threaten profitability and efficiency. Massive underwriting losses (nearly $27 billion in 2022) are exacerbated by rising claim severity, persistent economic and social inflation, strained supply chains, and rapid technological advancements.

How do we as an industry move forward and overcome these challenges?

Taking a step back to think about our industry’s fundamental mission may provide a path to a solution. Why does the world pay the insurance industry nearly $5 trillion in annual premiums? Because we show up on someone’s worst day to help individuals, businesses and communities recover and rebuild after losing a loved one, property or assets. Not one single entity can accomplish this noble goal and lofty objective alone. We need to collaborate to deliver on the industry’s most fundamental promise.


If insurers, technology partners and solution providers become more open to working together to create an interconnected ecosystem, this can result in seamless collaboration, enhanced functionality, and improved user experiences with greater efficiencies for the industry and the customers we serve.

There isn’t a more critical touch point in the insurance policy life cycle where this collaboration is more needed and can deliver the most positive impact to society than in claims, at the ultimate moment of truth.

As the saying goes, a rising tide lifts all ships. Likewise, leveraging the network effect can help everyone connected to the ecosystem. Let’s explore precisely how an integrated claims network can benefit the industry.

  1. Simplifies Process Complexity

Claims executives are generally responsible for ensuring efficient and accurate claims processes to deliver a fair, fast and easy customer experience. They often spend considerable time, money and effort innovating and improving claims processes. A recent Gartner survey found that more than half of insurance CIOs are increasing tech investments in 2023. With all these technology investments, the real challenge is seamlessly integrating existing point solutions to help solve the industry’s process problem.

The current ecosystem of claims solutions is disparate and minimally connected. Most solutions were developed to solve a specific problem in the claims process, not to optimize the claims process itself. The industry does not have a solutions problem; it has a collaboration and connectivity problem that only an open ecosystem can help solve.

  1. Facilitates Innovation and Collaboration

Open ecosystems have a pivotal role in fostering innovation within the insurance industry. By open, I mean it enables easy integrations from various parties, even among competitors.

Here’s a simple ecosystem example from the consumer tech world. Apple includes apps from direct competitors such as Microsoft and Google in its App Store despite initially not doing so. Why? These companies realized that by creating a zero-sum choice for customers, they lost revenue and hindered customer satisfaction.

Another example is the Zelle partner ecosystem that enables various banking institutions, payment processors and technology integrators to connect with its platform for the seamless exchange of finances.

Embracing openness creates a market-driven environment where a solution’s value is determined by market forces rather than dictated by a limited set of providers. An open ecosystem motivates solution providers to continuously enhance their products and services to meet the evolving needs of the industry.

In addition, open ecosystems enable collaboration and knowledge sharing among stakeholders. Solution providers can leverage the collective expertise and insights of the ecosystem to improve their offerings and address complex industry challenges. Insurers can benefit from accessing a diverse pool of innovative solutions and ideas, driving greater operational efficiencies, and enhancing the overall customer experience.

Innovation also acts as a natural selection process by allowing the market to determine the success of solutions. Solutions that prove effective, meet insurers’ needs and provide tangible value will thrive, while those that fail to deliver value will gradually fade away.

  1. Enables Straight-Through Processing and Enhances the Customer Experience

While the straight-through processing journey has gained momentum in underwriting, particularly in personal and small commercial lines, claims organizations have generally lagged. Fewer than 10 percent of claims are processed straight through.

Seamless exchange of data and orchestration across platforms within the claims ecosystem can facilitate automated resolution for less complex claims, which ultimately improves the customer experience. And a better customer experience is more critical than ever in light of rising premiums and longer cycle times, which have led to an increase in customers shopping for new policies.

It truly takes a village to resolve a claim—from first notice of loss (FNOL) to estimation, investigation, compliance, repair and resolution. And insurers often use disparate systems, solutions, data sources and professionals throughout the claims process. The more connected those systems are, the more efficient—and less expensive—the claims process can be. For example, integrations that bring critical data and insights forward at FNOL, combined with machine learning, can help detect potentially fraudulent claims early and route meritorious claims to a straight-through process.

Straight-through processing adds efficiencies that can help keep premiums low, which is a critical factor in customer retention and satisfaction.

Critical Components of an Effective Claims Ecosystem

The benefits of an integrated claims ecosystem are clear, but realizing those benefits requires these three crucial components:

  • Open Mindset. The more connected resources the ecosystem has, the better it is for all parties involved, including carriers, brokers, technology partners, vendors and third-party service providers. No single carrier or solutions provider can manage every aspect of the policy life cycle alone. However, by embracing a shift in mindset and collectively leveraging their different capabilities, they can enhance the insurance process. Successful ecosystems embrace openness—even to competitors.
  • Modern Data Connections. The value of a platform lies in its seamless integration with various systems and data sources through APIs and microservices. The seamless flow of internal and external data into existing platforms by leveraging service-oriented architecture eliminates the need to constantly switch between various solutions, thus resulting, as one customer put it, in “less clicks and less screens.”
  • Configurability and Customization. One-size-fits-all approaches do not work in the claims function. Each claims department has unique requirements for its process design. A successful ecosystem platform should be agile and offer a set of modular, pre-integrated solutions that can be easily added or removed from the process without IT involvement. Furthermore, it should allow insurers to customize the claims process through user-friendly, low/no-code workflow orchestration tools.

Claims servicing and payment are the ultimate product the insurance industry offers while fulfilling its most fundamental mission to put people, communities and businesses back on their feet after a loss. The best way we can effectively and efficiently fulfill this mission, particularly in this challenging environment, is through better ecosystem connectivity. Competition will always be part of, and beneficial to, the industry. But if we find common ground for connecting the ecosystem players to protect what matters most, all parties can benefit.

Maroun S. Mourad

Maroun S. Mourad is President, Claims Solutions. You can contact him at

You might also like

Visualize Subscribe

Get the best of Visualize!

Get the latest news and insights straight to your inbox.

Subscribe now

You will soon be redirected to the 3E website. If the page has not redirected, please visit the 3E site here. Please visit our newsroom to learn more about this agreement: Verisk Announces Sale of 3E Business to New Mountain Capital.