Claims transformation – E&Y report
Article Synopsis :
For years claims organizations have been cutting costs, tasked with doing more with less. Most legacy claims operating models and systems have not been sufficient to keep pace with dramatically increasing consumer expectations.
In the report “Claims transformation – Riding the wave to sustainable results”, E&Y highlights global industry trends and posits the case for transformation of the claims function across the insurance industry. The report identifies five factors driving the need for broad-based change, discussing the trends and implications within each:
- Cost and pricing pressures
- Technology and data excellence
- Customer centricity
- Regulatory scrutiny
- Talent management
Per the report, insurers seeking fundamental improvements in their claims operation need to answer these critical questions:
- How do we take advantage of the wealth of claims data and technology?
- How does our claims function contribute to the overall data and analytics capabilities of the organization to improve overall company performance?
- How do we enhance the customer experience, making the customer a more integral part of the claims process?
Nine specific activities insurers ought to be thinking about include:
- The claims target operating model and organizational design
- Claims transformation business case development
- Claims capability and maturity assessment
- Claims analytics and predictive modelling
- Claims fraud detection, investigation, and controls
- Claims customer experience
- Claims technology assessment and enablement
- Claims change management
- Claims quality and leakage assessment
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Digital Insurer's CommentsThe claims function is a critical moment of truth in the insurance value chain.
Considering that, on average, 75 cents of every dollar collected in premium runs through claims it’s easy to understand why the historic focus has been on minimizing claim processing costs and payouts, as every dollar saved is a dollar to the bottom line.
But emerging technologies such as social media and analytics, delivered via the seemingly infinite scalability of the cloud, are game changers. Insurers are enticed by juicy new capabilities for more efficient and accurate processing of claims, as well as challenged by higher customer expectations around what the claims experience should ‘feel’ like.
Large-scale investments in processes, technology and talent in claims offers a huge opportunity for insurers to get ahead – or get left behind – in the digital world.
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