Insurance claims teams must adapt if they are to not just survive the inevitable impact of technology but also harness the benefits, according to a new report from PwC.
The report, launched today to coincide with the Lloyd’s Market Association’s (LMA) Future of Claims Forum, focuses on how the pace and adoption of new ways of working will impact the insurance workforce of the future, and the types of skills that will make up the teams dealing with customers making claims.
PwC predicts large swathes of future claims will be settled with little or no human involvement, and will instead be driven by automated intelligent technology. The report calls on insurers to focus on the opportunities this transformational change represents – better claims handling, removal of low value tasks and enhanced analytics to continuously improve products and services.
Success in this transformation will largely be driven by a need to re-train the people whose current roles are most likely to be impacted by technology and sourcing new talent from different areas, the report says
As technology is used to redefine the claims process, PwC expects insurers to increasingly focus on helping their clients prevent losses from happening in the first place. For example, sensors and tracking data will be used on containers and ships to automatically trigger and validate claims payments for lost and/or damaged cargo.
As a result of these developments, PwC expects overall claim numbers to fall, meaning insurers could – and should – focus their energy on improving the experience of the customer and developing new services and products. This means companies will increasingly be looking to employ people with customer centric soft skills, as well as those with expertise in analysing data,who can create tailored, personal offerings for customers.
Jim Bichard, UK insurance leader at PwC, said:
“The insurance industry is alive to the fact that technology will disrupt everything they do and, in some cases, this change is already well underway. The impact will be felt differently by each firm – personal lines will react differently to commercial insurers, reinsurers and brokers – but all sectors need to take action now.
“Individual companies can’t guard against job losses resulting from automation, but this isn’t just about jobs – it’s about people. Insurers can ensure they remain competitive by investing in re-training and supporting their existing employees to ensure they’re fit for the future workplace.
The report goes into detail on what new business models will mean for the people working in each of the non-life insurance sectors, from the administrators and technicians to the executives right at the top. PwC states future claims professionals across all levels of an organisation will have a much broader range of skills, including experience outside the insurance industry – possibly a background in customer relations, or training in data analytics.
Michael Cook, claims advisory leader at PwC, commented:
“It’s inevitable that adoption of technology will have an impact on claims teams – both on their size and their role in the wider insurance business. This does not mean that the days of human involvement in claims are over – there will always be a role for human expertise and judgement.
“The future role of a claims professional will largely be driven by the type of claim – simpler settlements will be dealt with through technology, freeing up time for experts to work on more complex claims. New roles will also be created including a customer concierge, new product development such as parametric driven insurance for climate change, and the provision of loss prevention services. ”
Some of the actions insurers are advised to take include:
Senior leaders need to view the impact of automation on the workforce as a strategic decision – it’s too important to just be left to IT or HR
Start to make ‘no regret’ decisions that work with a number of future scenarios
Address recruitment policies to understand how to attract new people from different talent pools
Nurture training, agility, re-training and adaptability within the workforce
Communicate with the workforce about what automation means for them, what they need to do to progress in future and what support is planned
Lee Elliston, Claims Director, Lloyd’s Market Association, commented:
“Today the LMA Future of Claims Forum was launched to address the changing approach to claims and what that will mean for claims roles. In addition to technology, change is being driven by increased customer service expectations, prompting the need for a more customer-centric approach and the removal of processes that add no or little value.
“The forum kicks off with today’s event, which will assess the potential impact to individual roles and also the skills, approach and requirements of future claims teams. It will focus on the opportunities and challenges arising from automation and digitalisation, as outlined in PwC’s study, to support the market as it adapts and leverages talent from outside the industry, while understanding the development and training needs to reskill the existing workforce.”