In an increasingly competitive environment, the ongoing challenge for insurance claims functions is to find ways to continually improve and differentiate their service delivery. The specific needs of each client are shaped by many factors, including:
- industry sector
- geographical footprint
- supply chain challenges
- their approach to risk and insurance solutions
As change is happening more rapidly than ever there is a clear need for insurers and clients to work together or risk being disconnected at the time of greatest need – when the claim occurs. There is no simple answer to this challenge. Aside from investing in technology and other infrastructure improvements (which many have done), claims functions must get the underlying service delivery right. What constitutes “service delivery” in claims is evolving, though, as companies seek to differentiate themselves. There is much more emphasis now on understanding the specific needs of the client and having the right level of expertise on hand to prepare for, and respond to, incidents when they occur.
One area of differentiation is likely to be how insurers can leverage their expertise and knowledge, and make this available to clients. This can be in specific and obvious areas (helping the client learn from their own data), or in more innovative ways – perhaps by seeking opportunities to look at processes and, say, machinery exposures that may reside in different industry sectors but are similar in nature. Those who are best placed to help clients and risk managers be more informed and apply this knowledge into the risk framework will undoubtedly be more highly valued.
Another area of differentiation will be in the area of risk/loss prevention, planning and mitigation – using actual scenarios and stress testing to work through how the respective parties will work and solve the many issues that will arise. This is something that we have been doing for some time, and the demand for it is increasing. Often, the client perception and experience will be determined by just getting the basics right, something that sounds easy. In practice, this can be difficult to achieve, particularly where a client’s exposure sits across multiple products and geographies. Being seen as easily accessible, responsive, knowledgeable (about the client, the sector, the law, the geography and so on) and being seen as someone that clients can turn to even outside the context of a claim is increasingly the norm.
Success will ultimately come down to how well the claims organization is designed to support clients (including how well it is joined up, top to bottom) and the skills, expertise, and proactivity of the front-line claims teams and whether this at the client’s disposal or is primarily looking after the insurer’s interests. Our focus at AIG has been to work out how we design and build this, and it has led us to focus on several core design principles:
- Segmentation of expertise and creating true product specialism
- Actively segmented claims by severity/complexity, recognizing that the critical success criteria are quite different for small, straightforward claims as opposed to large and complex ones
- Proactivity is critical; experience tells us that the early stages of every claim are absolutely critical to getting the best outcome.