Spotlight: Technology: Managing claims surges in the digital age

Storms Ciara and Dennis caused an estimated £363m worth of damage in the UK, with insurance contact centres inundated with a spike in  claims instructions as a result.

As a consequence the insurance industry must be prepared for both feast and famine. However, it is simply uneconomical to employ people for 365 days a year to handle seasonal claims spikes.

Insurers are increasingly looking at how they can make better use of technology to complement their frontline claims staff in time of surge – to make sure that service remains consistent, settlement times do not suffer and legitimate claims are paid as promptly as possible.

Robotic process automation is already present in the tech stack of many insurers but recent events are pushing it and more importantly, intelligent automation, towards the top of the agenda.

Automation can help to control the cost of claims at first notification of loss, and the speed at which claims are handled and settled. The advent of Covid-19 has highlighted the need for immediate resources that can execute variations in workload. An augmented workforce made up of digital and human employees can help to fill the resourcing gap.

“We use various digital technologies to support the claims process, from online video to machine learning, but the idea is always the same: to make it easier for our customers and our employees,” says Waseem Malik, executive managing director for claims at Axa Insurance.

“For instance, when our household clients have – say – an escape of water claim, we can email them a link to their smartphone through which they can show us the damage in real time. Through the live stream, our claims handlers can evaluate the claim, assess cost immediately and offer a cash settlement – they can record the video or take stills to add to the claim file. For customers, it is convenient and quick, as it is for us. We have now also rolled out this digital capability for commercial property claims and are getting great feedback.”

The ability to combine technology efficiencies with human skills and personal interactions, when necessary, will be vital to insurers using these tools to manage claims surges.

Extraordinary times

Jody Baker, commercial director at Charles Taylor Claims Services, says: “In these extraordinary times of the Covid-19 pandemic, remote claims handlers and loss adjusters are also experiencing the challenge of claims surges. Shared technologies are ensuring the continuation of client interaction and servicing of losses.

“These technologies, which allow real-time image capture, real-time validation and multi-party engagement in virtual case discussion include MS Teams, Share Point and drones/satellite imagery. When desk topping a loss that is typically subject to a physical inspection, the adjuster or claims handler needs to be especially innovative in their use of technology.”

Other tools in use to reduce the claims life cycle and improve value to the insured include chatbots, auto-settlement of low-value, low-complexity claims and automated claims triage, assessment and score-carding.

The industry will see technologies such as artificial intelligence and robotic process automation delivered via a digital workforce, become more prevalent.

Sophisticated carriers will use AI and advanced analytics to segment and route each claim quickly to the appropriate claim handler and resolution channel. Routine claims and simple customer interactions with predictable characteristics and patterns may be suited for digital resolution.

Hugh Pelling, senior client manager at Blue Prism Cloud, said: “Within motor claims, there are insurers releasing apps that people can use to notify a claim if they have an accident. The digital workforce can support some of that key first notifcation of loss activity.

“Interpreting crash information in terms of the type of impact, the value of the car, interpreting photographic evidence, and then calling upon legacy data on the vehicle and driver to determine how to process the claim.

“The digital worker may determine, within its pre-programed parameters, that the vehicle should be written off and trigger a process to settle. Or it may pass the information to an adjuster to review. Speeding up this process through automation reduces the overall cost of managing motor accident claims.”

Axa is already using ML for motor claims. When a car accident is notified, the system captures information on the type of damage and accident description. ML techniques are utilised to predict the cost of repair and the cost of total loss and compare the two. Using repair or replace intelligence avoids the situation where a car is sent to a garage to then be written off.

The effective use of data is key to using many of these claims technologies successfully. Insurers are now connecting various sources of data and extracting value from unstructured or semi-structured data to make it useful for analytics.

Claims contact centres and customer-facing claims handlers benefit from support from a digital workforce at peak times as they can be added to cope with increased workload and then removed or reallocated when claims are slow.

Supporting claims handlers

Jeremy Trott, head of claims operations, Allianz Insurance, says: “Automation can provide additional cover during a surge event by gaining basic information but it can also be used by insurers during quieter times to provide simple updates on claims and for efficient notification.

“It should be used to support claims handlers and complement the claims process on an ongoing basis rather than just using one approach or the other for different scenarios.  It is important that we offer choice to our customers in a digital age – whether that is making a claim online or speaking to one of our advisors – and all industries should be adopting this approach.”

Technology doesn’t stand still, there’s been advances in the understanding of the environmental risk and the technologies that are enabling that, such as radar technologies.

Neill Slane, senior vertical market manager, UK and Ireland, Lexis Nexis Risk Solutions, says: “This is something that was previously available at a small level, it is not getting to a level where a lot of insurers are interested in it. They are looking to consume that information and use it across multiple points across their businesses from onboarding customers right through to the clearance stage.

“The big wins come when insurers are able to manage their risk effectively, they’re able to strategise and plan accordingly for these types of events.”

Over the next few years next-generation technologies such as intelligent automation have the potential to completely transform the claims process. Insurers will need to use the introduction of AI and robotics to process the simpler claims while human intervention is invested in the complex claims to improve the customer journey. 

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