Innovation is running rampant across the insurance industry right now, including in the claims segment of the business. At one global brokerage, the claims team is keeping brokers and insureds top of mind – a focus that is often easier said than done – as the company continues on its digital transformation journey.
“To us as a firm, the voice of the client is the key,” said Neil Harrison, global chief claims officer at Aon. “I do think that as an industry, sometimes we think about innovation as a process issue – we think about what innovation might do for us, we think about how cool innovation might make us feel, and we sometimes forget that connection with the client.”
While most organizations will allude to meeting customer needs as they go through an innovative process, that connection sometimes isn’t as direct or concrete as it could be, even though at the end of the day, every participant in the insurance market only provides value if they serve clients well, noted Harrison.
While evaluating which technologies will actually meet this client-centric goal, insurance companies can be easily distracted by ‘shiny object syndrome,’ where the innovative technology solutions that are coming out on a seemingly daily basis can obscure the importance of picking the right technology that benefits the end customer. To address this challenge, Aon not only considers the target client and how they will benefit from the new solution, but also the business need that it’s trying to fulfil and how the technology supports that need.
“If we look at the industry overall, a lot of the role that technology plays in innovation at the end of the day … is not visible to a client,” explained Harrison. “It’s all about, how do we make the technology and its benefits … resonate for a client? If it’s better quality of outcomes in the claims world or the speed of outcomes, if it’s better access to strategic decision support data, if it’s lower pricing – there needs to be some sort of measurable client benefit from process change.”
Another critical angle to consider when implementing innovative solutions is what Harrison refers to as ‘product side innovation,’ which concerns how Aon uses technology and data to design and implement new solutions, whether the final results are improved policy wordings or entirely new insurance products. That, again, is tangible to a customer, and reveals how the use of technology, rather than the technology itself, is really the engine of the innovation, noted the Aon leader.
Notably, infusing innovation into processes that involve larger complex claims versus personal auto claims, for instance, are two very different asks. Aon has more than 20 lines of coverage that result in claims valued at over a billion dollars to very small claims. As a result, there’s a challenge in making sure that 80% of resources are put towards the 20% of the claims that actually need the help, rather than having 80% of resources dedicated to attritional, lower end claims.
“That’s where technology can play a role,” explained Harrison. “We segment our thinking and our technology approach to say, the complex [claim] needs technology that provides the data that a claim professional needs to intervene to then deliver insights to a client, to work with a carrier, to work with an adjuster, and to bring a solution.”
On the other hand, he continued, “In the attritional layer, we need technology to basically fast track a process, and … we don’t necessarily see ourselves having a great amount of value to bring in that lower value claims arena.”
However, a challenge that appears alongside this thinking is that a low-cost claim that is badly managed can quickly become a high-cost claim, while some relatively high-cost claims can actually be quite simple to resolve.
“The coverage issue is binary – it’s clearly a limits loss – so that should be fast tracked too,” said Harrison, adding that as a result, “The technology process not being driven by the dollar value of loss is something that we keep our eye on.”
