The Future of Claims Transformation in Insurance

The London market industry bible Insurance Day recently interviewed me to find out how technology is bringing sweeping changes, challenges and opportunities to the insurance industry in general and to claims management, in particular. To find out what I said to the interviewer, go to this blog and the full transcript of the interview.

Insurance Day wanted to know the considerations for London market insurers, or brokers, as to how and when they place people or technology at the centre of their claims management activities. What, they asked, does this mean for their recruitment strategies in terms of the particular skillsets that will characterise the London market claims professionals of the future?

To read the full article in which my replies appeared, click on this link
Insurance Day

Or you can read my answers, which only form a section of the full report, below.

Machines Drive Profits

Since the beginning of the first industrial revolution back in the middle of the 18th Century, businesses looked at how they could make themselves more efficient and more profitable through the use of machines.

The decisions about which jobs are performed by a person or by a machine that are being made today are not different from those made 250 years ago. What has changed, though, is the types of jobs that technology can now replace. With the increased use of machine learning (ML) and Artificial Intelligence (AI), knowledge worker type roles such as those of claims professionals are increasingly in reach of machines.

When making hiring decisions, particularly for roles that either can or will be able to performed by machines in the next few years, firms should hire purple people. These are people who have a combination of business (blue) skills and technical (red) skills. Purple people with their multi-disciplinary skills tend to be more adaptable and will help organisations find their natural human and technology balance.

How do I see the London market claims management sector developing over the next three to five years, was the next question? What will be the key issues for the sector? And what will it all mean in terms of the recruitment and training of claims professionals and in terms of the priority that will be accorded to the claims management function within broking and insurance organizations?

An Increase in Smart Contracts

In my view, there will be many changes in the claims management sector over the coming five years. There is likely, for example, to be an increase in the number of Smart Contracts in the London market. This will in simple cases (initially) mean that claims will be settled without human intervention.

With the looming shortage of insurance and claims expertise, as those with the greatest knowledge retire, the claims management sector is already looking to increase automation and to reduce claims complexity against this future skills shortages. The execution of these strategies is likely to increase over the next five years.

The use of wide and varied data sources will also become more prevalent in the underwriting, and therefore, the claims process. There is an increasing amount of data being collected and processed, and this will accelerate over the coming years with the introduction of more and more IOT (Internet of Things) devices - many of which will collect, process and store information.

Organisations which do not have a 4IR (4th Industrial Revolution) strategy as part of their current plan are likely to be at a significant disadvantage within the next five years and will probably find themselves playing catch-up.

Fifth Step are experts in operational transformation, third-party risk management, IT recruitment, data management and claims technology delivery services in the insurance sector. If you would like to discuss our approach to claims transformation or the risk posed by your third party, why not get in touch by email Darren.wray@fifthstep