In series - Property claims: Wait less programme

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Technology has the ability to deliver improvements and increase efficiency in property claims handling. Sam Barrett reports on some of the advances being made and the benefits they can bring.

Increasing efficiency in property claims handling can reduce costs and improve customer satisfaction. And, for many, technology is seen as holding the key to changing the claims landscape and delivering these improvements.

"Over the past 10 years, technology has been improving every six months or so," says Lee Sadowski, customer director at Rok. "This has been to the advantage of the insurance industry and its customers."

Insurers appear to agree. "Anything that can take the wait time out of a claim is a good thing," says Martin Milliner, director of claims and technical services at LV. "This saves time and money but, most importantly, it's great for customers. Being made to wait is a killer when it comes to customer service."

Technology has created benefits throughout the claims process, starting from first notification of loss. Being able to validate — or repudiate — a claim quickly and efficiently reduces the claims life cycle, which saves money and improves customer satisfaction.

System connectivity
Several advances have enabled this. For starters, with FNOL often outsourced by insurers, there has been a real push to get greater connectivity with the insurers' own data. Having policyholder details to hand can enable the claims handler to instantly see whether a claim is covered, which speeds up the process but also ensures policyholder expectation is not raised when a loss fails to be covered.

Although this is clearly a major benefit, Steve Whetter, service centre director at Cunningham Lindsey, says this isn't always possible. "Some insurers are much better at this than others," he explains. "Some have to validate their system before this information can be made available, while others are much slicker."

By way of an example, he says that one of the insurers he works with has full connectivity between its system and Cunningham Lindsey's. This means that when a claim notification is received, all the relevant forms can be populated from information already held on its database. This helps to speed up the process but also reduces the likelihood of keying errors, which can cause frustration for all parties and, in some situations, slow the claim down.

Technology can also be used to check the validity of a claim. "It's a matter of fast tracking the genuine ones and screening out fraud," says Phil Price, UK strategy and innovation manager for general insurance at Crawford & Company. For example, Cunningham Lindsey uses information from its subsidiary Weather Net to help verify claims for storm, freeze and flood. With this, weather information is broken down by postcode so it is immediately apparent whether a claim is genuinely a result of the weather.

The widespread take-up of smart phones has also enabled insurers to fast track some of their smaller claims, with many developing Iphone apps to make this process even slicker.

LV's customers can, for example, use a smart phone to take photographs of damage with the aim that a claim can then be settled more quickly by claims handlers. "When you have a ground floor, one room situation for escape of water it doesn't really make any sense to send someone out to see it," says Mr Milliner. "This way the claim can be settled by desktop validation. Loss adjusters are expensive and, when they might only be able to do three or four appointments a day, this can save considerable time and money."

Technology can also make a significant difference when it comes to managing more complex claims where several suppliers may be involved. Mr Price explains: "Instead of having lots of hand-offs between suppliers it's much more efficient to be able to manage the process from one database. We've built a system that enables all parties to go in and see what's happening, and one of the large composites is already using this. The customer only needs to make one call and all the information they need is available, without the claims handler having to check with other parties."

Reducing errors
Giving every party access to one central database can also reduce the likelihood of errors occurring. If events are diarised, with each party required to confirm they have actioned what is required, it is much less likely that the claims handler will receive a call from a policyholder, disgruntled that they have taken the day off work to wait for someone that didn't turn up.

As well as having a co-ordinated response by working through one database, mobile technology has massively improved the way claims are managed. Smart phones and tablet PCs are becoming the norm among loss adjusters and contractors, with many saying they like this form of technology — not just because of their power but because they are almost invisible when it comes to using them with customers.

Kevin Wood, chief technical officer at Merlin Professional Claims Services, is a big fan. "It's all about remote working. If you have access to files and data wherever you are, it's so much easier. This way you can go to a customer's home and you've got everything you need to settle the claim," he explains.

As an example, Crawford's adjusters are armed with Delta, a tablet PC described as 'the office in the palm of your hand'. This includes estimating tools, a camera, integrated policy wordings and internet capabilities. It enables adjusters to refer to the policy wordings where a dispute arises over a claim; take photographs, annotate them and send them to an underwriter where a decision is required; and scope the work needed. "Completing these actions could have taken days," says Mr Price. "It can now all be sorted within the policyholder's home. Further, with BACS, we can also make a payment there and then."

Agreeing work is another area where technology has helped. For example, Mr Wood says that his technicians use a web-based tool to scope out the work, creating a schedule that details everything that will be done. "We then print this out for the contractors, the insurance company and the customer so everyone has a copy. This removes the potential for misunderstandings," he says.

Keeping up with all of these technological advances does present challenges though. Jonathan Davison, strategic development director at the British Damage Management Association, says that many of his members have responded well by investing but there are concerns regarding the costs. "Insurers want their suppliers to be dynamic and use technology to reduce costs but, when faced with ever decreasing rates, investing in new technology can be a challenge. On top of this, technology moves so fast a lot could be redundant within a few years."

Enhancing the customer experience
Technological developments have also created the opportunity to enhance the customer experience. As well as the behind-the-scenes improvements, the way an insurer interfaces with policyholders can influence service satisfaction.

For example, at Questgates a claims web portal is available that customers can log onto and access details of their claim. "We've found that being able to access this information, in this way, can really help the insured," says Alistair Steward, its director of business development. "For instance, if someone has made a claim for storm damage, they'd be able to see photographs of the damage that has been done to their roof. They also know exactly what's happening with their claim without having to call the insurer."

Other common technological advances for customers include online claims reporting, with Iphone apps popping up to enable this information to be received almost instantly, and text and e-mail updates to keep customers informed throughout their claim. "Customers get this when they bank or shop online so they expect it when they deal with their insurer," says Mr Price. But while delivering all this technology to the customer may appear to lead to significant improvements, expectations need to be more measured. "You can't have a situation where technology is driving the customer's claims experience," says Mr Whetter. "Not all customers want to use technology; you have to give them choice and let them pick how they'll interact with you."

Complex data demands
A further benefit of canny use of technology is the management information that can be generated. Insurers and adjusters can see a range of claims data instantly, including cost trends and claims-handling performance, enabling them to sort out any potential problems before they arise. Mr Whetter believes that having this data to hand is becoming increasingly important, especially as demands for data are becoming more complex. "Data is key. Insurers want management information deeper and more frequently. They also want more ad-hoc reports, perhaps to follow up a trend they may have noted," he explains.

The industry is undoubtedly moving towards delivering more and more of this real-time but Mr Whetter argues this isn't always necessary. "I'm not sure how much extra value you get from real-time management information — especially compared to yesterday's data," he says.

Although there are clearly benefits to be had from harnessing technology, Mr Whetter says take-up varies greatly between insurers. "We've developed innovations to help the customer but not every insurer wants to use them. It does vary greatly across the market."

Crawford's Mr Price reports a similar story. He says that although the industry is embracing technology, it is taking time to get everyone up to speed. "At the moment different parts of the industry are at different places, travelling at different speeds. If the whole industry was at the same level it would be a really sweet spot," he adds.

Over and above the investment required to upgrade technology, another possible barrier is data protection. Inviting customers and other claims partners to go into your database to access personal details throws up a number of security and data issues. Mr Price says these shouldn't really halt progress — adding that many of the issues existed before technology.

Reassuringly, rather than stick their heads in the sand, some insurers readily admit their current systems are not perfect, with most of them adding that they have new developments in the pipeline. Andy Harris, property practice leader at XL Insurance, is among these. He says: "We are always looking at ways to increase efficiency and next year we'll be introducing a new IT system that is being used by our US parent. This will be modified for the UK market but it is more internet-based so will deliver greater connectivity."

A similar story is evident at LV, with a new system going live next September. Mr Milliner adds: "Our current system isn't fantastic but our new one will bring some huge improvements, which will make a lot of difference to our claims handling service." Among the new features will be interfacing with loss adjuster partners and improved scheduling. "The only thing it doesn't do is guarantee a contractor will turn up but we might even see changes in behaviour surrounding this as poor performance will be much more visible," Mr Milliner adds.

Skills still paramount
While the advances being announced by insurers are welcomed, some are warning that technology should not be the only part of the claims equation. People remain an invaluable part of the process. "Technology is nothing without a skilled handler," says Mr Whetter. "We find that while technology can increase efficiency in property claims handling, the personal touch is important too." This view is echoed by Mr Price. He says there have been many technological advances which have improved property claims handling but ultimately the efficiency of the process is down to the skills of people. "Technology is only an enabler," he says. "What really controls claims spend is the people."

And while some are still catching up with the latest technology, there is more to come. Future developments are set to increase efficiency across the claims process. Offering an example, Mr Milliner says mobile camera technology will soon be the norm — and not just for small claims. "We could have guys whizzing around in affected areas, for instance where there's been a lot of storm damage, beaming photos to us of damage to our policyholders' roofs. This way we'd be able to begin processing the claim even before the customer knows it's happened," he explains.

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