Is it finally time to invest in claim technology?
Updated: Jul 16, 2020
Don't get me wrong. I really like the art and science of underwriting: selecting and pricing risks, digging into data, interacting with brokers and agents, and delivering great solutions to customers. It's fast-paced and rewarding work. I did it for many years at the beginning of my career - it's where I cut my teeth in the business and I wouldn't trade the experience for anything. Since then, I've been lucky enough to be part of the technological transformation of this end of the business - faster, leaner, better - all to make the insurance buying experience more accessible and enjoyable (or at least less painful) for today's consumers.
But, there's an even more important process going on at the back end - the point where all the promises made, and money and time spent by customers, salespeople, underwriters, actuaries, and customer service representatives come to a critical conclusion. THE CLAIM. This is when it really matters....this is what it's all about. Right? It may not be as jazzy as the front end, but this is where you want serious people doing serious analysis to make the right decision....every....single.... time. The fact is, though, too little has been done to support and enhance the work of claim analysts through technology. It's still an incredibly labor-intensive, expensive process with people under intense time pressure to make good decisions. They must do this while lacking timely access to consistent and credible data and technology to make the work more efficient.
Only 8% of InsurTech companies are claim-focused
Image from: Quarterly InsurTech Briefing Q4 2019, WillisRe, January 2020
Claim managers we've spoken with over the past few months have said things like "it's about time someone brought a claim technology solution, not another underwriting solution trying to fit into claims". It's challenging running the single most important organization in any insurance company, an organization that sometimes feels it can't please anyone and doing the work day in and day out without the same investment that goes into other parts of the insurance lifecycle.
The good news is, some companies are starting to pay attention, realizing that an efficient and consistent claim process benefits both the company and the claimant - and a happy claimant is the best advertising a company can have. Which brings us back to the front end where we started. The best thing to help grow the industry isn't technology, or lower prices, or an easy buying experience. It's having happy claimants who are likely to recommend your company again and again and again.
Tim Seavey is Head of Market Development & Operations for DigitalOwl, an insurtech focused on helping insurance companies and others save time and improve accuracy when reviewing medical records. He has spent the majority of his career finding ways to help insurance companies improve risk management and efficiency for the benefit of the company and policyholders.