Responding to a catastrophic event is the biggest test of effectiveness that any insurer will face, and in New Zealand, both private and government-run insurers have had their claims handling put under the spotlight.
Creating a smooth and easy claims process in the wake of a catastrophe is no easy task. Insurers have the job of quickly assessing damage and scale, prioritising the most urgent clients, and, of course, there are stakeholder expectations to consider. Finding a solution through technology therefore seems like the smartest thing to do – however, one expert says insurers need to be very careful not to hand over tasks which need a human touch to automation and algorithms.
Crawford New Zealand’s head of strategic partnerships Mathew Hessian has been in the claims space for 25 years, and has been involved in catastrophe claims management across Asia, Europe, the UK and the Caribbean. He will be discussing catastrophe claims handling at the Insurance Business TechFest this November.
“The biggest challenge any insurer has on day one is to set the expectations for stakeholders – customers, reinsurers and financiers, regulators, etc., and to tell them what the financial impact is likely to be,” Hessian explained.
“While accepting that technology plays a significant part in the claims industry and indeed we are also well advanced in this space, as compared with many other market players, I do believe the technology drive needs to be tempered a little. The risk of defaulting human expertise to technology is real. There’s a view that technology will be the answer to a whole lot of issues, but it’s the people with claim management experience, using technology that will make catastrophe responses a lot better than what they have been.”
“There are key issues that stakeholders have at different stages of a catastrophe, and technology will undoubtedly help manage those,” he continued.
“But it does still require people to understand what the drivers are, what’s important to insurers, reinsurers, local bodies and most importantly the insured. You need to understand the event before you can work out which technology to deploy and how. My concern is that there’s a lot of action (and at times rhetoric) around technology from those tech people who are developing it, and those are the people leading a lot of the movement, for obvious reasons, they have a vested interest. We understand that, but, it is vital that the people who know the business drivers and have managed events for their businesses over many years and gained a wealth of firsthand knowledge in the process, are as equally engaged. ”
As a simple example, Hessian says that things like drone and satellite footage are invaluable in quickly assessing the scale of an event, and in being able to assess otherwise inaccessible areas – but, ultimately, even that kind of technology is limited to the bigger picture.
“Things like drone and satellite footage does exactly what it needs to do – gives you the overall scale of an event,” he explained. “But I wouldn’t expect that to become the one way we assess the specific damage to a specific building, for example. Insurers need to understand what the complexities of each case are, and then respond based on that.”
“Property-related claims in particular are the kinds of claims that have taken me all over the world,” Hessian concluded. “I’m looking forward to sharing my thoughts and experiences as they relate to the current industry.”
To hear more from Mathew about catastrophe claims handling at the Insurance Business TechFest, click here.
