This post is the fifth in a five-part series about Accenture’s most recent European and Latin America Claims Survey. Read the previous post.
My earlier posts sketched the challenges that P&C insurers face in their claims functions as well as some of the opportunities to improve business performance. But the most important takeaway from our 2013 survey, I would argue, is that the claims functions offers insurers a massive opportunity to drive radical improvements in profitability and customer satisfaction.
To grab this opportunity, insurers must embrace technology that allows changes in systems and behavior and enables them to address rising consumer expectations, manage new forms of risk, and improve claims outcomes.
Inevitably, some carriers will adopt a tactical, or incremental, approach to enhancing the claims function. This has the benefit of being quicker and least costly in the short-term—but insurers remain at risk of not being able to adapt to a fast-changing market, especially with increasingly digital-savvy customers. On the other hand, carriers that embrace transformation will gain the agility that gives them an enduring competitive advantage.
To achieve successful transformation, carriers must be willing to rethink the claims function and underpin it with core systems that allow for transformation. In addition, they should evaluate the benefits of enhanced data collection and management as the foundation for advanced analytics.
They also need to ensure that their claims organization is optimally structured with a proper framework to unleash the full benefit of their technology enhancements. Insurers don’t have just to meet the demands that currently confront them—they must gain the flexibility to respond to future demands as well.
My advice to insurers is thus to be guided now by your future needs. Whether you choose to upgrade your core systems by enhancing old systems or implementing new modern platforms, take a long hard look at your claims operating model—including technologies, processes and people. Your aim should be to bring to life a claims capability that drives profitability and customer satisfaction now, but that is also flexible enough to accommodate what is lies ahead in the future.
I will be away on vacation for a few weeks. When I return toward the end of August, more insights into the state of innovation in the insurance industry.