Claims has been an area of intense focus when it comes to digitization and new predictive tools. Nowhere has this been more pronounced than in auto physical damage (APD), and especially personal auto. 

Casualty claims, however, lack the finite universe of possible outcomes that APD enjoys, making it hard to deploy some of the advanced technology that’s benefitted the physical claim world. While the number and variety of cars and how they can be damaged is huge, it is still finite. With casualty, every human body is different, how injuries manifest and develop is different and so is the impact of those injuries on the people involved.

Casualty claim leaders have relied on expert judgment to wade through the large caseloads they face to focus on the matters with the highest risk of materially affecting the book to focus their expertise and skill effectively. 

Kevin Moynihan, VP of product management at CCC Intelligent Solutions (CCC), shared some of the historic and current best practices insurers have put in place to strive for accurate casualty outcomes. “Certainly, a focus on evaluation accuracy is a must, and a sophisticated medical bill review capability is a powerful ally for adjusters on most claims,” he said.

Bill review takes the previously manual and laborious process of combing through all medical bills on a claim to review accuracy and appropriateness of both charges and treatment and automates it to execute a carrier’s rules. The tool then flags inconsistencies and bubbles them to the surface for an adjuster’s review, for example, highlighting billing that the carrier deems unreasonable or unrelated.  

“These evaluation reviews are critical to achieving loss accuracy for any claims organization, but increasingly carriers need additional tools in their toolbox,” Moynihan said. “Evaluation occurs well into a claim’s life cycle, often many months after the date of loss. Rather than waiting, if carriers could tap into up front FNOL [first notice of loss] and APD data, they have a greater potential to set themselves up for claim handling success.”

Social inflation, which is driving settlement values up dramatically from their already high levels just a few short years ago, is another concern, and not the exclusive domain of severe claims and large losses. Several factors are driving this, including the increase in claims that have early attorney representation, up 26% over the five years ending in 2021, according to Sedgwick. And because the average cost of a claim with representation is 15.3 times higher than those without, according to Milliman, this shifting mix does not bode well for casualty loss ratios.

See also: How to Cut P&C Claims Leakage

Meg Sutton, SVP of casualty claims at Liberty Mutual, shares several factors fueling nuclear verdicts. “The business of litigation," she said, "has evolved to where there are nine-figure advertising budgets for some firms, increasing by almost two-thirds in a single year; the funding of litigation by third parties given the scale of potential settlements; and the increased use of high-tech presentation methods and highly specialized expert witnesses. Couple that with the change in perceptions of large corporations from trusted pillars of the community to organizations that are doing wrong and need to be punished, it’s not surprising that things have escalated to where they are now.”

Medical inflation is also extremely relevant here because most casualty claims have a bodily injury trigger at their heart. And the correlation between file age with indemnity and adjusting cost is well-established. Time delays also raise further opportunity for extra contractual risk.

The net impact is that casualty losses have been increasing dramatically, and we seem to be running out of tools to address this. In commercial auto liability, for example, all of these factors have led incurred losses to grow at an 11% compound annual growth rate throughout the 2010s, ending the period 2.5 times higher than at the beginning.

This issue is nothing new. What is different today is how we engage with it. While many APD tools aren’t directly relevant in the context of casualty claims, recent changes in those tools and the analytics tied to them are different now.

CCC has been using its Delta-V analysis, or the understanding of the change in velocity of the involved vehicles, and the resultant impact to both physical damage to the cars and bodily injury to passengers. For example, when a car decelerates from 20 miles per hour to zero in a fraction of a second, you will see great damage to the car and higher likelihood of severe injury to passengers than you would when the car decelerates from five miles per hour to zero over the course of a full second.

While that knowledge is helpful for predicting the likelihood of frame damage, for example, it can also be extremely valuable in assessing the validity of claimed bodily injury. This information can naturally signal potential fraud or a need for more involved adjusting, but it can also signal that a claim with little or no reported bodily injury may soon jump in severity as the injuries eventually get reported.

Sutton shares that Liberty Mutual is seeing tools like telematics and predictive modeling help in casualty matters already. Carriers can immediately recreate an accident and understand the forces at play to determine the best intervention and engagement with a claimant. Sutton says, “Because we have new tools and insights thanks to telematics, prediction, accident recreation, the physics with which an accident occurred, etc., – all things we never had before – it makes it easier to resolve matters faster. The more quickly you can reach out, price the claim and make a reasonable offer, the more likely the matter is to resolve before an attorney is involved, which would raise the risk of a nuclear verdict.”

CCC’s Moynihan provides additional context on Delta-V’s ability to affect casualty outcomes. “CCC has invested heavily to develop AI that can determine the change in velocity and principal director of force but will soon also do this from photos of the damaged vehicle. This new, meaningful capability will unlock additional use cases for carriers. Because those photos often become available on day one of the claim, they provide invaluable information to inform segmentation, liability and injury causality decisions earlier than ever before. This also represents true network effects. Carriers who have adopted smart estimate photo capture technology on the APD side, where parties are enabled and guided to take photos of their damage to submit to the carrier, will also be capturing the photos needed for calculating Delta-V. CCC has relationships with 18 of the top 20 carrier APD teams, representing over 90% of auto policies, so odds are most casualty organizations can turn to their APD peers to leverage these photos.”

Tools like Delta-V can be helpful for smaller casualty claims, as well. Many of these matters are adjudicated fairly quickly on the time scale of casualty claims, and that may feel good enough. But that handling speed happens with human intervention, and it may still be happening on much longer timescales than that same claimant experiences on APD. 

What if casualty adjusters knew about the details and physics of the APD claim? With Delta-V data, they can see whether the scale of injuries was appropriate and reasonable, as well as the cost of treatment. 

This has a flywheel effect, where closing out these matters quickly and efficiently frees expert adjusters to work on the matters that need more attention. You end up saving money on the entire system by offloading these simpler, clearer cases sooner thanks to insights brought over the wall from the APD tools being deployed.

And that’s exactly what can be done today that was not possible before. Using data from the APD experience, like Delta-V, carriers can have meaningful insights brought into their decision making on casualty claims, affecting segmentation, assignment and settlement decisions. 

Sutton talks about it as finding a way to allay people’s fears that carriers are trying to take advantage of them, as popular plaintiff’s bar ads suggest. She says, “When you can reassure people through data, a video, the facts on how fast the car was going or other behaviors, you can show claimants that they're being treated fairly. That goes a long way to resolving cases reasonably.”

But none of this should exist in a vacuum. This data and these tools aren’t meant to replace the expertise required by casualty claims. Instead, they are about enhancing it so better decisions can be made faster. 

Remember, good claims handling is about paying the right amount as quickly as possible. Tools like Delta-V can help casualty adjusters make the right decisions to do that.

Technavio expects the insurance technology market will grow 45% annually. Let’s consider technology trends that will determine the growth and development of the insurance industry.

AI for predictive analytics in insurance

The profitability of an insurer largely depends on how the company works with information, analyzing it and making forecasts. Therefore, firms are trying to implement data analytics on a large scale. Artificial intelligence is one of the technologies that help to do this efficiently.

McKinsey estimated that in 2030-2040, 10% to 55% of insurance processes will be automated (underwriting, claims processing, record keeping, invoicing). The introduction of AI will make it possible.

By analyzing a large amount of data, AI in insurance can help you take preventive actions: to set better prices for services; identify insurance policy candidates with high risk; detect fraudulent activities; anticipate trends in the insurance business; and process claims faster.

Some digital banking research companies show that firms using predictive analytics reduce their loss ratio by 3% to 9%.

In addition, AI allows insurance companies to achieve a decent level of personalization, which is something that 80% of customers want so much. A smart algorithm evaluates the behavior of an insurance company's client on social networks and websites to offer more favorable and convenient policy conditions.

AI enables faster underwriting and claims processing, which is a big step forward in improving customer experience (CX). For example, insurance companies reduce premiums for careful drivers who have not been in an accident for three to five years. They also offer discounts to drivers who drive less than 7,000 miles a year. Such personalization increases customer loyalty and commitment to a brand.

The Internet of things for loss prevention

The IoT connects smart homes, smartphones, smart watches, speakers, self-driving cars and a range of other devices and generates valuable data for the insurance industry.

Long before the advent of IoT devices, insurance companies gave discounts to homeowners who had security systems installed. Now. insurers can offer profitable policies with IoT equipment. When a policyholder installs such a device at home, an organization can track any anomalies on the premises.

A connected device will notify agents if an incident occurs. Thus, an insurance company can prevent damage -- for example, from a faulty boiler in a commercial building. The insurer warns the client to take action before the appliance breaks down or explodes. The insurer protects the client and prevents large losses.

Insurers are interested in connected devices, and Allied Market Research predicts that the global insurance IoT market will grow from $8.63 billion in 2019 to more than $300 billion in 2027. Clients will be able to directly influence the cost of policies, and insurers will influence costs and profitability.

Chatbots for 24/7 communication with customers

Although chatbot technology is based on AI and machine learning, we have decided to put this trend in a separate category. A virtual assistant communicates with a client and accompanies them in case an insurance agent is unavailable. Servion predicts that, by 2025, 95% of all consumer interactions will be carried out through virtual assistants (by phone or chat).

A chatbot advises policyholders in a chat, and customers do not need to wait until an agent is free. The virtual assistant answers questions at any time of the day or night, on weekdays, weekends and holidays. 64% of users appreciate the round-the-clock availability of bots and are ready to communicate with them instead of a person. Operators freed from heavy workloads can deal with more complex issues or create more interesting proposals.

Chatbots can accompany clients at all stages of applying for a policy or claim. Thanks to virtual assistants, policyholders report incidents from anywhere and at any time. Applicants do not have to hold the line waiting for an agent. Instead, they turn to personal assistants that put customers in touch with the right person to process applications further.

The information about an insured event collected by a chatbot is recorded in documents. Therefore, an applicant needs to fill out fewer paper documents to file a claim. At the same time, a smart algorithm evaluates validity and legitimacy to avoid fraudulent false claims.

For example, an insurance company in Zurich implemented Zuri, a virtual assistant. As a result, the firm was able to automate 84% of customer interactions, provide instant solutions to 70% of problems and increase website visitor engagement by 10%. The use of chatbots in insurance plays a decisive role. According to NMSC, the global chatbot market in BFSI will increase from $586 million in 2019 to nearly $7 billion in 2030.

See also: Insurance Technology Trends for 2022

Drones for risk and loss assessment

Unmanned aerial vehicles are gradually being adopted not only in rescue operations and cargo delivery. They are successfully used in research operations in the insurance business. Insurance organizations are learning to use drones to assess risk before issuing a policy, calculate the number of losses after incidents and suggest preventive maintenance of insured objects.

Insurance companies already use 17% of all commercial drones, and they will deploy more aerial assistants in the coming years. UAVs are needed in insurance when adjusters cannot get to the scene of an incident due to dangerous conditions. Drones are sent there to ensure the validity of a claim and avoid delays in processing.

They enter dangerous areas, such as destroyed houses after natural disasters, to confirm the credibility of claims and assess the damage. According to Intellias, a drone can process three houses in an hour. An adjuster needs a whole day to carry out this task.

Drones assess the condition of roofs, plumbing or heating systems and send data to the cloud so that agents can use it. Experts analyze the information and assess the risks of breakdowns or damage.

In some cases, drones help conduct an entire investigation. For example, an insurance company used Dronotec devices to determine the cause of a fire on the French coastline. The fire destroyed more than 80 homes, and a client of the insurance firm was blamed for the loss. Insurance agents used drones to create a 2D map of the area. Based on meteorological data, experts determined the direction of the wind and identified the hotbed of fire. It turned out that the client was innocent. Thus, the company saved itself from paying compensation of 100 million euros. In such cases, drones are “insurance” for insurers.

Conclusion

Technology trends are transforming the insurance industry into insurtech. They enrich the digital experience of customers, reduce operating costs, improve service and take capacities to a new level. Given the competition in the insurance market, companies following these trends can become leaders.

Information technology is bringing insurance firms into untapped markets, helping to improve business models. Innovation builds the next generation's entrepreneurial culture.

Employee benefits consultants (EBCs) and employers too often overlook the growing discontent employees feel with skyrocketing out-of-pocket (OOP) costs compounded by overly complicated healthcare billing systems. Employees are at their wits' end dealing with endless medical bills and notices that rarely add up. What is and is not covered by their plan isn’t clear. Then they are inundated with endless medical bills and notices, but they can’t discern what they owe and to whom. 

This stress and confusion can have a multiplier effect across the workforce, exacerbating employee satisfaction and retention problems. 

But innovations in healthcare billing and payment platforms offer EBCs new ways to not only simplify the employee-patient experience when dealing with healthcare bills but make it easier and more affordable for them to access the care they need. Making healthcare billing less confusing and more cost-effective can benefit all:

• Employees become better-informed consumers who are more in control of their medical expenses and, more importantly, more engaged in their care.
• Employers lower their plan design costs while improving the well-being of their employees and their families. 
• Providers spend less money and use fewer resources chasing patient payments and more time on patient care.  

The systemic causes

The U.S. healthcare insurance industry has seen a significant shift in recent years as employers shift the financial burden of medical costs on to employees. This shift is due largely to employers moving more staff into high-deductible health plan (HDHP) options. Faced with skyrocketing healthcare costs, employers need to share more of the payments with employees to bring down costs and cover all. But it has resulted in growing out-of-pocket (OOP) contributions from the employees. 

Nearly one-third of American workers were enrolled in high-deductible plans last year, according to the Kaiser Family Foundation. And that trend is expected to grow. 

EBCs are helping employers temper the financial pain of high-deductible plans by designing plans with supplemental benefits and concierge services. But while welcomed by employees, these extra services can add complexity to the billing/payment experience. Employees now find themselves buried in a blizzard of Explanation of Benefits (EOBs) and "what you owe" statements. They have to wade through multiple invoices for deductibles and other payments, in addition to invoices from their health plan. 

Worse yet, higher OOP cost pressures combined with increased billing confusion are causing many employees to postpone or forgo the care they need. A recent survey from Discover Personal Loans found that more than half (52%) of Americans experiencing medical financial pressure are putting off seeing a specialist, or being seen for a sickness (41%), or undergoing treatment plans recommended by their doctor (31%). At the same time, 56% of Americans said they felt “completely lost” when it came to understanding how their health insurance worked, with nearly half (47%) confused about which services were covered or considered out-of-network, according to a Bend Financial study. Employers recognize that this is an unsustainable position – employees delaying getting needed care due to cost and confusion will ultimately lead to more expensive, emergent needs for care.  

See also: 4 Steps to Support Patient Financial Health

The fix

Despite their drawbacks, HDHPs are not going away any time soon. In fact, they can benefit employers and employees in a number of ways. For instance, they can help employees who need lower monthly premiums. HDHPs can also be combined with health savings accounts, allowing employees to make tax-free contributions to pay for their deductibles, co-pays and other medical expenses. And some experts contend that HDHPs encourage employees to become smarter, more discerning price/quality shoppers when seeking care. 

Employers, of course, benefit from lower premiums and an improved bottom line. 

The key for EBCs is to demonstrate the value of the HDHP plans by building in financial resiliency, transparency and simplicity for employees and their families. New payment platforms are creating a more patient-centric experience across the entire billing lifecycle. These platforms work by guaranteeing prompt full payments to healthcare providers in exchange for giving employees more affordable repayment plans for their OOP costs. They shift the financial relationship away from providers to specialized service providers that take the inefficiencies out of the system and streamline the payment process for all. This dynamic means that employees with HDHPs will no longer be chased by collections or face demands for pre-payment for care when finances are tight. As soon as a claim is adjudicated, providers get 100% of the in-network allowed amount. 

To simplify employee engagement, EBCs can automatically enroll all employees – even those with less-favorable credit histories – and issue credit for all allowed charges up to their OOP max, regardless of their credit standing. Or they can receive credit for OOP costs at low to no interest, while constructing a payment schedule that fits the employee’s need. 

These platforms also help eliminate the confusion surrounding billing. Instead of experiencing a blizzard of statements and notices, employees get a single, simple consolidated statement summarizing the totality of their care, regardless of where they received the care. 

Final thoughts

Today’s archaic billing processes cause enormous stress, confusion and dissatisfaction among employees, employers and providers alike. New healthcare payment financing platforms give EBCs the opportunity to optimize the value of an employer’s healthcare plan by reducing complexities and providing an affordable payment path for employees who might otherwise struggle to pay high deductibles. The result is that employees are better-informed, more in control of their medical expenses and, most importantly, more engaged to seek the care they need.

The goal of the insurance industry has always been simple: to be there for people when they need it most. With our world today facing debilitating events like weather catastrophes, war and global financial woes, our role has never been more important.

Hurricane Ian exposed the unfortunate reality that not enough people have flood insurance. According to FEMA, floods are the most common natural disaster in the U.S. and have affected 99% of counties between 1996 and 2019, yet home insurance policies alone do not cover flood-related damages.

As risks emerge, or intensify, seemingly daily, there remains a gap between these risks and the coverage in place to mitigate them — this is the protection gap.

As an extension of our mission to help people when they need us, it’s our duty as an industry to close the protection gap and empower more people with financial stability. We may not be able to close it completely, but we can help shrink it through innovative, strategic and creative thinking. Here’s how:

Let’s get digital 

Today’s consumers are hungry for digital experiences and solutions. We order our coffee through an app that lets us skip the line. We fill our online shopping carts with holiday gifts instead of braving the crowds at our local malls. We can now even see a doctor without ever leaving the house (or changing out of our pajamas!). As we do more business and live more of our lives online, insurance providers need to get with the (digital) picture. 

62% of Millennial and Gen Z insurance buyers said they’d be willing to pay more for a policy from a company that offers a user-friendly digital experience. By pivoting to or layering in digital sales and distribution  strategies, providers can reach a broader audience of potential buyers. Accessibility is key to closing the protection gap. 

Let’s get personal 

Personalized coverage makes insurance more relevant to any given customer, and if a potential buyer feels you’re speaking directly to their specific needs, they’ll be more likely to purchase. The best way to guarantee personalized coverage is through the effective use of data. 

A recent survey from Capco Intelligence revealed that 72% of consumers would willingly share personal data to get lower insurance premiums. Providers should use this to their advantage. With the consent of customers, providers can use consumer information to design coverage that’s right for them, instead of foisting broad-range packages on them that they feel may not fit their needs or that they are overpaying for. 

See also: Closing the Protection Gap

Let’s get creative 

As issues like climate change, inflation and the pandemic persist, providing comprehensive coverage can seem impossible. However, through new product development and a little out-of-the-box thinking, insurers can solve for emergent needs. 

This is where “inclusive insurance” comes into play: Coverage in this bucket is aimed at capturing untapped or underinsured markets to bring affordable products to those who need it most. Maybe you’ll come up with a microinsurance product that covers your customers’ daily commutes, or an app that guides people through designing their own protection plans. Regardless of your approach, reaching those underserved markets can be a huge boon to your business - and your customers’ lives. 

Let’s get together

Closing the protection gap will never be the result of efforts by one entity alone. Partnering with brands in adjacent industries, from financial services to consumer products, will enable insurance providers to identify and reach new customers at a greater scale and lower costs. Leveraging partnerships with brands that already have well-established and loyal customer bases also gives insurers the ability to piggyback on existing brand equity and expand their market share.

Embedding insurance offers within relevant purchasing paths also offers a lucrative opportunity for everyone within the insurance value chain. Embedded insurance makes customer and partnership acquisition efforts (and therefore costs) organically low. Insurers get their product lines in front of the right customer, at the right time; partners get the opportunity to leverage the data they already own to generate new lines of revenue; the end consumer seamlessly gets a highly relevant offer that they may have not otherwise pursued. With embedded insurance, nobody needs much additional incentive because everyone already benefits. 

Mind the gap 

Closing the protection gap should be a priority for providers across the globe. Whether you’re shifting your distribution tactics, focusing on more personalized coverage, designing new products or partnering across industry lines, there’s certainly no shortage of methods to help contribute to closing the gap. Any and all efforts will help the insurance industry grow and innovate as a whole while enabling consumers to find proper coverage — especially in the midst of emerging risks — and for insurers to meet them wherever and whenever they need us most. 

For more tips on how you can work towards closing the protection gap, check out our recently released research report, Insurance at a Crossroads - The path toward closing the global protection gap.

How much has the world been turned upside-down in the past year?

Well, a year ago, the major annual survey of insurance executives by the International Insurance Society found that a third were focused on dealing with problems caused by low interest rates. This year? A third say they're focused on dealing with problems created by high interest rates.

Concern about the pandemic receded in the past year -- but plenty of other worries replaced it. In particular, the IIS's 2022 Global Priorities Survey found that the percentage of executives saying that addressing geopolitical conflicts was a top political and legal priority soared from 5% in 2021 to 42% in 2022.

"With war raging in Ukraine and tensions rising on both sides of the Pacific," the IIS reports, "one executive described the situation as a 'breakdown of the post-WW2 global political order' while another worried that 'the world is becoming increasingly volatile and thus risky.'”

Ominously, of those who listed geopolitical uncertainty as a top-three priority, 48% said they weren't prepared to deal with the problem. Among all respondents, only about 8% said they were very prepared to do so.

Similarly, a quarter of respondents said they were unprepared to deal with social/political instability -- which also appears to be increasing and could flare up following the mid-term elections in the United States in less than a month.

Not surprisingly, long-term inflation ticked way up as a concern. It was already a major worry a year ago, with 49% listing it as a top-three economic priority, but that figure soared to 72% this year. Likewise, concern about long-term growth shot up -- a bit more than a quarter listed it as a top-three issue last year, while some 45% did so this year.

Amid the worries about inflation and growth:

• 52% listed expense management as a top-three business and financial priority, nearly double the 27% who did so in 2021;
• 54% said competition for talent was a top priority, up from 46% a year ago;
• And 28% said a hybrid workforce was a top concern, up from 21% last year. 

The good news is that a third said they were very prepared to handle the issue of long-term growth, and almost half said they were somewhat prepared. But a fifth said they were unprepared for the competition for talent, and only about half that many said they were very prepared. (The worry about talent certainly rings true for me: Easily the most read piece I've written in recent months was on "The Staffing Crisis in Insurance.")

Cybersecurity remains the top political and legal concern, with some 70% putting it in their top three, but there are signs that executives feel more like they have their arms around the issue. Half of respondents listed security of data as a top-three priority, but that was down from 62% in 2021. Only a quarter of executives in 2021 felt prepared to address data security, but that figure rose to 35% this year, and the rate of executives who felt unprepared fell from 14% in 2021 to 5% in 2022.

Climate climate change remained the biggest social and environmental priority -- and only about 15% said they were very prepared, while a quarter said they were unprepared. The IIS report said, "Most climate-focused responses pointed to the high cost of natural disasters and the urgent need for the industry to respond. As one executive wrote: 'It is time to take ownership and responsibility to adapt and mitigate climate change. The insurance industry… has to be an advocate for a sensible and effective reaction to the threats… created/increased by climate change.'”

Healthcare moved way up, from seventh place to second, among social and environmental concerns. 31% of respondents listed it as a top-three priority, nearly double the 16% in 2021. The shift reflects lingering concerns about the deficiencies in our healthcare systems that the pandemic exposed, as well as the growing impact of an aging population. 

I was happy to see that a third of executives said that the shift to a consumer-driven customer experience is a top-three priority in innovation and technology for 36% of executives in 2022, up from 20% in 2021 -- though I'll always be baffled that the figure isn't 100%.

There's a lot more, too, so I encourage you to go to the International Insurance Society site and learn more. (The report is being formally released today, and I don't have a direct link to it yet.)

While I'm at it, I also strongly recommend checking out the IIS's Global Insurance Forum, a free, three-day, virtual event that begins this morning. The theme is the Great Reset, and the conference has an impressive set of speakers covering a broad range of issues that relate to how the industry can best position itself as we come out of the pandemic -- and confront all the other geopolitical, economic and social issues that the world keeps throwing at us. 

You can check out the full agenda here and register here. Did I mention that the conference is free?

One last teaser: Stay tuned for a series of interviews that I'm recording with many of the biggest names from the forum. I've already started -- and we're all in for a treat if the rest are anything like the first ones we've done. I'll provide details when we're ready to release them. 

Cheers,

Paul

Stable, predictable…. These keywords were used to describe insurance organizations until a few years ago. But customer profiles started changing, and digitization enveloped the industry landscape slowly, until the pandemic hastened the pace at full throttle. The industry is now at a crossover point: Innovate and digitize, or perish.

Insurance carriers must improve customer engagement and experience, as it quantitatively affects top-line revenue. Brokers need to cater to a new customer profile that includes digital natives who have product information at their fingertips already. In addition, they demand their time to be valued and want personal interactions blended with self-service models. Millennials and Gen Z customers are looking for easier processes, swift turnarounds and a blend of digitized self-service models and value-added conversations. 

How can carriers innovate to deliver to this New Age customer? And how can brokers become truly customer-centric?

What Carriers Need to Do

A customer-relationship management (CRM) system is the foundation to deliver an optimized seller and buyer experience. But most insurance companies are struggling with deriving value out of their CRMs. Typically, CRMs fall short while:

• Creating a single view of customer data and information. According to Forrester’s Global State of CRM Survey 2020, the largest pain point for 68% of organizations come in trying to create a single-pane-of-glass view for customer data and information. 
• Optimizing customer impact leading to decision-making. 48% felt they weren’t able to do this.
• Managing data quality. Is the right kind of information reaching the seller at the right time to help buyers? 39% didn’t think so.

Customer engagement begins with seller engagement. Sellers now live in the mobile app ecosystem -- from ordering a new laptop, to dinner takeaways or groceries -- and are accustomed to smooth journeys. So why should it be any different at work? A Forrester report finds that sellers are increasingly disconnected from their sales technology. Carriers must address this and create a technology environment that can provide sellers with:

1. An easy-to-use, mobile-first, single-window interface
2. Automated functions to swiftly assist with repeatable mundane tasks such as note taking and summarizing 
3. Standardized processes and building playbooks based on actions of best sellers
4. Nudges that guide them toward the right course of actions and behaviors
5. Contextual customer information that allows them to sell
6. Recommended next best steps, products or actions

See also: 6 Keys to Successful CRM Implementation

What Brokers Need to Do

Personalize. It is key. Although 39% of buyers used digital channels for complex purchases in 2022, 58% still made their initial purchase with a seller. Especially with insurance, customers seek expert advice, guidance and insights into what may be the right product fit at a particular phase in their lives. To build this kind of expertise, brokers must have in-depth information on products as well as the customer persona to build a bespoke personalized insurance plan. 

And this must be done in a timely manner. Studies show conversion rates of qualified opportunities were eight times higher when buyers are contacted within the first five minutes vs. six-plus minutes.

If the broker is interacting with one customer or maybe five, it is likely fine. But what if the numbers are much higher? Brokers need intelligent systems that help them deliver solutions at scale while helping them evolve into an advisory role. They need systems of insight that provide contextual information on a customer in real time, as well as suggest the right products and possible add-on options that address a customer’s need to the T. 

They also need tools that keep them agile and reduce their time spent inputting data into clunky CRMs, searching customer information, customizing content and doing tasks that are not revenue-generating. 

The New CRM Stack 

The CRM alone is not the right technology to help carriers and brokers meet customers' expectations of engagement, as they do not make it easy to capture interactions, automate repeatable work, get insights out of data and allow operations to evolve. 

Complementing a CRM with AI/ML-based solutions can help harness the power of data within an organization. Tools such as sales engagement platforms can extend the power of sales technologies and enable sellers to understand preferred engagement channels, identify missing contacts and surface important account, contact and opportunity insights so that they can focus on customers and work that moves the needle.

No one wants a musculoskeletal-related workplace injury to occur. Despite this, injuries do happen, and they happen often. And when an employee does get injured, there is an obligation to do right by that person and provide quality care. Unfortunately, this isn’t always the reality. Often, the employee enters a system that delivers a one-size-fits-all care approach that doesn’t benefit the individual. 

Employers’ top medical expense is often MSK-related. With the high cost and high prevalence, one would assume that employers are dialed into the best end-to-end care solutions for their workers. However, this isn’t often the case. 

Employers who want to invest in better MSK care must look at the bigger picture. An individual’s care plan needs to consider all the factors that are proven to improve their recovery time. Simply put, a workers’ compensation injury requires more than a predetermined number of physical therapy (PT) sessions. It requires a “physical therapy first” solution that steers patients to the right providers who can deliver high-value care, ensuring proper diagnosis and optimal treatment. 

However, to supplement that care, employers must look for partners that take a holistic and integrated approach to MSK care delivery for their employees. Better yet—to look for solutions that offer individualized, hybrid healthcare—care that is omnichannel and addresses the episodic and longitudinal employee needs.

Injured workers deserve a frictionless experience that keeps them engaged throughout recovery. They should be cared for in a way that ensures they’re ready to return to full duty without the fear of reinjury. They need to be treated by therapy providers who know what optimal care and recovery look like for them. Unfortunately, this approach to injury management is often missing or inaccessible for the everyday worker.

Here’s what an ideal MSK care delivery system should look like: 

• An omnichannel mix of in-person PT and digital tools that fully support the injured worker from home. 
• The ability to leverage whole-person recovery data and compliance tracking to optimize individual treatment throughout the case.
• Clinical oversight based on known workers’ compensation rehabilitation best practices. 
• Dashboard information that is shared with all stakeholders so quality care is tracked, measured, monitored and achieved. 

The critical link to recovery: holistic physical therapy

The right PT network is one of the most important decisions an employer can make to affect their workers’ outcomes. Working with a PT network that understands the importance of whole-person, hybrid care is key to offering the recovery workers deserve.

Physical therapy is a hands-on form of healthcare. Still, thanks to technological advances, we can now take a hybrid approach where the injured worker gets in-person care but also does supplementary exercises and other recovery activities at home.

Holistic PT leverages technology and other tools to track treatment progress. This empowers injury management that can be individualized and optimized based on each injured worker’s comorbidities, overall health and job demands. This approach keeps injured workers engaged throughout treatment and adapts to their specific needs and recovery pace. 

See also: Workers' Comp: Back to the Future

What’s at stake?

In an ideal world, employers would see their worker through the lens of that individual and their family. Their health and well-being are vital. We must offer them the most tailored, customer-centric care—like we’d want our loved ones to have. 

When employers fail to see the injured worker as an individual, they fail that person’s recovery and hinder their organization's goals. Choosing the right high-value PT network with the right knowledge and tools to navigate MSK injuries in the workplace makes all the difference. After all, managing a workers’ comp case is more complex than traditional commercial health PT. There are more stakeholders and more regulations. These differences are rarely taught in school, so it is up to the therapy provider to educate themselves or join a network that guides and educates them through the workers’ comp process. 

When we align all stakeholders involved in an injured worker’s recovery with greater collaboration, there is less friction. Less friction brings better outcomes. 

As information is transparently and seamlessly shared throughout a case, workers’ comp stakeholders become empowered to make the best decisions throughout the treatment process instead of waiting until the end of the claim. 

This is our vision for the future of MSK.

Until Hurricanes Fiona and Ian, the 2022 hurricane season had seen the lowest activity in the Atlantic in 25 years.  There was a complete absence of named storms in August, in contrast to the 10 that occurred that month in 2021. September saw Hurricane Danielle on Sept. 2 and Hurricane Earl on Sept. 6, ending one of the longest streaks without a hurricane in the North Atlantic in recent history. The deadly destruction caused by Hurricane Fiona in Puerto Rico and the Dominican Republic, and the devastation to Southwest Florida by Hurricane Ian in late September quickly changed an otherwise quiet season. Initial estimates indicate that Hurricane Ian may be the costliest Florida storm since 1992’s Hurricane Andrew and could cost insurers up to $47 billion.

Earlier forecasts had called for an above-average hurricane season in the Atlantic. The drivers for the high-activity forecasts were the three-year La Niña weather pattern, which minimizes wind shear, as well as above-average sea surface temperatures (SSTs). Wind shear actually decreases hurricane activity. These forecasts were correct, but more nuanced and volatile (and therefore more difficult to predict) factors have dominated activity in the North Atlantic so far. High SSTs usually lead to evaporation, and the resulting moisture fuels tropical cyclone development. However, with hot and dry Sahara dust billowing into the main development region (MDR) over much of the summer; the air has simply been too dry.

The North Atlantic has also seen a high level of wind shear, especially over the Caribbean, which is unusual for a La Niña year. Despite SSTs in the MDR and Caribbean currently being above average, SSTs across the North Atlantic are showing some complex patterns. In particular, extremely warm waters along the coastline from New York to Newfoundland have affected the jet stream, indirectly sustaining the flow of dry air into the MDR.

We should not be surprised that activity is finally picking up. Historically, there have been more major hurricanes in September than any other month. We have seen examples in the past of intense hurricanes occurring after sluggish starts to the season, as well as some particularly intense hurricanes striking after the official peak of Sept. 10. Superstorm Sandy hit the Northeast at the end of October 2012. and Hurricane Michael made landfall in the Florida Panhandle in mid-October 2018 as a category 5 major hurricane.

See also: Is Hurricane Ian a Turning Point?

Although Superstorm Sandy in 2012 was downgraded to a post-tropical storm just before landfall in New Jersey, its record size contributed to the considerable damage it caused. Sandy managed to sustain its size and strength due to the high SSTs along the U.S. East Coast at the time, not unlike the current situation. More recently, in 2020, major hurricanes Eta and Iota made landfall in Central America during November, not long before the official end of the season (Nov. 30).

As the North Atlantic hurricane season typically experiences a secondary peak around mid-October, businesses need to remain vigilant about protecting their premises and people, even in a relatively mild hurricane season.

A single storm can cause catastrophic damage locally, and the National Hurricane Center in the U.S. advises that emergency preparedness plans should not be based on seasonal forecasts. When a hurricane watch is issued for your area, you need to "Know Your Zone" (vulnerable areas will be given an evacuation warning or order) and be aware that authority-ordered evacuation is based on the possibility of storm surge and flooding, rather than pending landfall of a storm.

To minimize losses in the event of an extreme weather event, businesses should implement a written emergency plan, including actions to take before, during and after a storm. The plan should cover areas such as training, emergency supplies, business continuity, building inspections, anchoring or relocating equipment and stock, protecting windows, flood protection, salvage and recovery and damage assessment.

Allianz has created specific checklists to assist businesses before, during and after extreme weather events that can be found here: Allianz Windstorm Checklist and Allianz Flood Checklist.

According to Forrester, “Data-driven companies are 58% more likely to beat revenue goals than those who are not focused on data.” One would assume insurance companies would fit naturally into this data-driven category due to the troves of customer data and information made accessible to them over the years. But herein lies the rub – many are still unsure of which data is most relevant and how best to leverage it.  

If insurance organizations did take advantage of decades of customer data, it could equip the entire insurance marketing life cycle with insightful management routes, connecting customer acquisition costs to expected yield from the same customer. The solution, therefore, lies in finding out how to best store, share and use that data throughout the organization.

The Source of Silos 

The confusion surrounding data is born out of and reinforced by the fact that insurance organizations were not originally structured with data-sharing in mind. In fact, departments typically compartmentalize their datasets to measure their own success; e.g., marketing and claims departments use different sets of key performance indicators (KPIs). Indeed, 40% of all executives cite the lack of alignment within their organizations as a barrier to using big data – and insurance is no exception. 

Because organizations lack efficient and centralized data management, it’s often unclear where data gets stored and what unique insight it holds. Even if separate departments are using the same data, they may be contextualizing it differently, yielding differing analyses of the same data points. 

Let My Information Flow

Many companies need to understand that data is not flowing through their organization in an efficient manner. 

The goal should be creating a collective awareness of the discrepancies that exist within communication channels so all departments can integrate their future-facing data strategies.

That said, having one unified measure for an entire organization also requires standardizing the data in question – meaning all departments must have a similar context for the data they generate. For instance, if the product team and the marketing team each receive the same KPI, but only the product team views it as a positive indicator while the marketing team sees it negatively, there is a wider organizational issue of how data points are perceived and defined.

By applying standardized datasets and KPIs across departments, insurers can have their cake and eat it, too, as they can more accurately measure performance and avoid any inconsistencies, while significantly growing the data pool from which the organization can fish valuable insights into customer behavior and preferences and much, much more. 

See also: Data-Driven Transformation

Data-Based Decision Making 

Previously departments may have been working in different directions, but, by removing data silos and creating a unified, contextual understanding of insurance data, each will gain a more complete picture of how best to improve their overall performance while achieving compatible goals.

This fuller picture also means that marketing and claims departments could work together more closely, sharing more customer information to obtain the right customer at the right cost and, of course, ensure profitability. All the first-party data that marketing has been collecting could now inform policy and claims decision-making, increasing product accuracy – in other words, the data sum will be much greater than its parts.

One Clear Direction

We at Kissterra believe that insurers that begin to share data throughout their departments can potentially achieve better economics and higher profitability results even within a year’s time.  

It will take a huge cultural shift, not just a technical one, for organizations to improve their data operations. Getting all parties on the same page about which data to use and how to use it will afford insurers the ability to set more aligned goals company-wide, moving the organization in a far clearer direction.

When the pandemic began, insurance providers were caught by surprise, like many of us. Operationalizing digital transformation efforts within contact centers was necessary to support remote staff as well as to respond to a rise in digital-first customer behavior.

Across each iteration of the contact center, customer service agents have worked diligently to provide stakeholders with efficient and accurate information, depending on legacy systems in support of their efforts. While many have begun or are well on their way to enhanced service capabilities, an elevated level of activity has forced customer service departments to make a series of critical decisions.

Moreover, in times of financial uncertainty, departments must prioritize technologies and the challenges they resolve in order of urgency. Sourcing solutions that are not only immediately beneficial but also support the long-term growth of an organization is key. A service approach that prioritizes leveraging technology, and placing conversational artificial intelligence as a first line in customer interaction, saves time, frees human agents to focus on more involved tasks and creates a path for scalable growth.

The Methodology

Many insurance institutions may be skeptical of the capabilities of a virtual agent. Insurance is a naturally complex space to operate in, with not only high amounts of regulation but also customer needs varying on an individual level. Yet some of the leading insurers offer the most customization, and, with advancements in natural language understanding and AI, today’s virtual agents are much more capable than their predecessors.

A virtual agent serving as the first line is able to supplement, not take over, the efforts of human employees. If a query needs to be handled by a human, virtual agents are able to route customers to the appropriate place, maintaining the continuity of the initial chat to bring contact center staff up to speed quickly. Striking this balance between virtual and human agents allows conversational AI (CAI) to handle more frequent queries. In the insurance contact center, as responsibilities are offloaded onto the virtual agent, employees are free to address other aspects of their roles and can play a valuable part in expansion of a VA’s capabilities. Built-in intents enable a chatbot to get up to speed when implemented in insurance use cases, and AI trainers can ensure virtual agents are delivering consistent, high-quality experiences that maintain the personal touch for each customer.

See also: How to Simplify Customer Experience

Accelerating Claims Cycles

Claims are the backbone of any insurance agency. Accelerating claims cycles through conversational AI simplifies the process, improving resolution speed by allowing enhanced self-service. Modern virtual agents can be integrated into existing systems to aid customers in updating their account information, purchasing new plans and even filing a claim. While these may seem like mundane tasks for a technologically  advanced system powered by AI to be handling, they can often be some of the most administratively heavy for a live service rep to handle. With less of a burden from repetitive processes, live agents can dedicate their time to improving resolution speed of the claims that have already been processed as well as other top issues in terms of complexity.

This powerful integration with existing legacy platforms ensures that all customer information is accurately maintained across the organization, addressing data silos that add unnecessary complexity to the claims process. Equally important, 24/7 virtual agent availability makes it possible for firms to be available in a time of need and extend critical service capabilities to meet the needs of  the round-the-clock customer.

The Automation Opportunity

The benefits of automation go beyond enabling efficiency, accuracy and reducing workloads within customer service centers. Conversational AI opens the doors for nurturing employee skills and expands the opportunities for training. Virtual agents require a level of oversight, with AI trainers optimizing conversation flows, and leveraging the data compiled by CAI to improve internal processes. Adopting virtual agents can create new paths for call center staff.

Insurance customer service centers have also been able to implement internal virtual agents with resolution rates as high as 97%, as seen in boost.ai’s engagement with leading Nordic insurance provider Tryg. An internal virtual agent serves as a live resource for call-center employees to quickly glean accurate organizational information without disrupting customer calls. Conversational AI platforms provide some of the most scalable functionality of any solution, incorporating paths for expansion for service, support and sales at any size. 

Incorporating conversational AI as a frontline response to customer service extends the service capabilities of an institution and lays the groundwork for continued expansion. Typically, the assumption is that virtual agents are in some way reducing the need for human employees, but the most effective use of conversational AI is one that strikes a balance between the two. Accelerating claims cycles presents yet another opportunity to improve operations.

Today’s virtual agents are capable of being trained in many verticals, with some solutions coming with out-of-the-box intents and libraries focused on insurance. Ultimately the path ahead for insurance customer service is one that expands on the investments in technology already made. Working in disparate systems, or addressing one problem at a time is not an approach that will establish sustainable growth.