The claims department is a key factor in overall customer experience in the insurance sector, and this is where innovation in insurance should start, delegates heard at an insurance sector briefing in Johannesburg this week.
Addressing leading insurance sector stakeholders at a trends briefing hosted by the Irish Embassy, Enterprise Ireland, and insurance software specialists ClaimVantage in Sandton, industry experts noted that digital disruption was changing both the insurance sector and the market it serves.
Global insurance stakeholders faced disruption and innovation from all sides, Sirisha Govender, Senior Manager: Technology at PwC Advisory Services, said. “56% of insurance CEOs see new market entrants as a threat to their growth prospects,” she noted. Govender pointed to a digitally informed market, a growing Millennial consumer base who do not believe life products are relevant to them, and the rise of disruptive innovators in the financial space as key challenges for traditional insurers.
“Insurers today must be agile, innovative and quick to market. They need to embrace digital disruption as a growth opportunity, seek out new sources of data and make the most of client touchpoints,” she said.
A critically important client touchpoint, the speakers said, was the claims department. This make-or-break engagement with customers determines the success or failure of the overall customer experience.
Tiffany van Tonder, Senior Specialist: Insurance Compliance (Conduct of Business Supervision) at the Financial Services Board (FSB), said that poor claims handling can be a key indicator of potential problems in the entire insurance industry value chain. The FSB, in its claims thematic review of several insurers, has found inconsistencies in claims management practices in the local insurance sector, she said. Other concerns that were highlighted during the review included ineffective controls relating to the reporting and tracking of claims, lack of transparency in claims processes and an absence of root cause analysis by insurers on the main reasons for claims repudiations. Following this review, we are looking at making some changes,” van Tonder said. “In future, we will expect insurers to have a very clear and comprehensive claims management framework in place.” This, she said, would align with the future Financial Sector Conduct Authority’s (FSCA) overarching goal of ensuring fair outcomes for customers.
ClaimVantage, a FinTech innovator, emerging from Ireland’s rapidly-growing software sector, says cloud computing and data analytics are proving to be a game-changer for insurers seeking to adapt to a digital economy. Understanding and exploiting customer data is crucial in helping insurers customise their products to meet customer expectations, the company says.
Leo Corcoran, CEO of ClaimVantage, said a challenge in South Africa was that claims departments had traditionally been seen as cost centres, with many of them still using paper-based processes and data locked in silos. “They cannot start innovating and benefiting from disruptive technologies until they have consolidated their data and moved from paper to digital,” he said.
ClaimVantage solutions, built on Salesforce’s Force.com cloud platform, are making inroads in international insurance firms where automation, efficiency in claims processing and digital data management are driving a competitive advantage. In an automated and digitised environment, where data quality is carefully controlled and supports effective analytics, trends in historical and incoming claim data can be detected and risks flagged, ClaimVantage says.
Richard McGuinness, Regional VP Growth Markets EMEA at Salesforce, echoed the view that disruptive new technologies, effective data analysis and cloud underpinned insurance innovation. “Globally, we see companies taking digital disruption and using it to drive new opportunities. This disruption is coming from outside the sector,” he said. “For example, we expect to see auto insurance premiums dropping in future, thanks to the advent of driverless cars. Drone technology is already being harnessed to assess property damage. And big data is being harnessed to improve competitiveness.” Artificial Intelligence (AI), Internet of Things (IOT), mobile and social media are all impacting the insurance sector, he said. “Smart insurers are making changes to become disruptors themselves. In this changing market, consumers expect more, and the more customer effort that goes in to a process, the more disengaged the customer becomes. The customer journey needs to be made as effortless as possible.”
ClaimVantage, with offices in Ireland, the US, South Africa, the UK and the APAC region, provides market leading technology claims management solutions to the long-term insurance industry. For more information, visit www.claimvantage.com.
