Tag Archives: digitization

What Digital Can Do for Disability Claims

Healthcare is being transformed by advances in artificial intelligence, virtual reality, machine learning, sensors and other innovative technologies. Practically everybody has a smartphone, making it easier than ever to gather data and consent to third-party access. Unique data insights mean providers can offer people products and services tailored to them individually.

For insurers, digital technology offers new ways to manage risk that relies less on face-to-face and traditional clinical assessment; this is why there is so much interest in understanding how innovation might work. Selected comments from four key players in the digital health ecosystem make clear the appeal of putting two and two together.

Thomas Lethenborg at Monsenso, a mobile platform for mental health, said, “Digital technology helps an individual move from reactive behavior to being more proactive – and this changes the paradigm in particular with engagement.”

It’s a view shared by David Forster of Thrive, a digital interventions app for mental health: “Data drives our understanding of what works best for the individual.” According to Forster, the success of digital technology in clinical settings points to real opportunities in insurance: “It makes it possible to provide policyholders help with illness prevention, early detection and assistance on a personal level.”

Ian Prangley, of exercise rehabilitation service TrackActive, continued the theme when he said, “For insurers, digital solutions can drive connectedness, engagement and customer satisfaction while enabling people to self-manage their health. Harnessing data insights and implementing artificial intelligence (AI) is key to achieving this.”

See also: Why to Digitize Disability Claims  

A comment by Danny Dressler of AIMO, an ecosystem integrating intelligent motion analysis into musculoskeletal care, added further confirmation: “As more and better data is gathered and processed safely, AI offers the most promise to take care of people’s health, and fix issues in both healthcare and the life and health insurance sectors.”

By using digital means, insurers can create scalable, automated, speedy ways of supporting people when they need help the most. Proponents argue it offers better health outcomes for policyholders that will reduce the costs associated with long disability claims – a win-win for both insurers and consumers.

Dressler also said that “technology like ours lets insurers offer customers new solutions such as dynamic pricing and automated claims and even help to prevent claims from happening.” Lethenborg says it represents “an opportunity to ensure the data collected gives holistic insights and analytics that we can use to intervene more rapidly, when help is needed.”

But it’s crucial the highest levels of privacy and data protection are guaranteed and operators are in full compliance with regulations. An imperfect balance of privacy with innovation is a deal-breaker for consumers.

Forster is clear how delicate this balance is: “We recognize our responsibility to safeguard users’ data, but at the same time information technology empowers people to make choices and participate actively in managing their own health – it puts them in the driving seat for the first time.”

For digital solutions to be convincing, research and scientific evidence are needed, but with newly made services, long-term experience is scarce, and a leap of faith is required.

Dressler spoke for all in saying, “We maintain strong links to scientific institutions because the general technologies underpinning our solutions emerges from scientific thesis…[This means] we only implement new features or functions after a rigorous validation process, especially because we are asking people to trust us with their health and well-being.”

Dealing with high volumes of data is not without risk, particularly when it’s shared with third parties.

See also: Digital Innovation in Life Insurance  

Prangley has pointed to recent concerns over how sensitive data is being used to highlight the challenges faced, “The key is to anonymize and protect data, and have customers consent to sharing it on the understanding it will be used solely to improve their health.” This insight is driven home by Lethenborg, who said, “Transparency about how the data will be used is essential to building trust.”

Digitization has already brought new products and services that have had positive medical and scientific impact. As Prangley said, “Technology has connected people and changed how we relate to each other. There [are] arguments for and against this of course, but in the context of health and wellbeing we believe it’s a great thing.”

With mental health and musculoskeletal problems as the leading causes of disability claims in every market, these companies can bring digital solutions and opportunities – and health insurers can also feel great about them.

Small Insurers and Digital Priorities

From what I’ve seen in recent insurance technology news updates, it appears that the insurance industry is finally ripe for change, ready to make the leap to digital technologies that will lead us into tomorrow. Or is it?

Consider these core drivers of change: digital innovations such as cloud, telematics, IoT, analytics and AI, mobile, real-time 24/7 access to data, the growing need for on-demand products and, in general, using these transformative technologies to create operational efficiencies, adopt new business models and anticipate and exceed customer expectations.

Even though we know these technologies are enabling new insurance products, methods, processes, services and business models, there is still an omnipresent culture that hangs on to the troubling “it’s the way we’ve always done it” battle cry. This is often voiced by insurers that share their frustrations with being challenged to change existing culture from inside out to address these digital drivers.

My view is that, while many of the larger insurers are making the hard move to adopt digital technologies, it’s still not a priority for many small- to medium-sized insurance companies. And now, more than ever, there is a certain urgency to having that discussion. Tanguy Catlin, senior partner with McKinsey & Co., when addressing the issue, referred to it as the “tipping point” that is “where those that have not adapted their [digital] strategies fade away.”

See also: Darwinian Shift to Digital Insurance 2.0  

In research results published by MIT Sloan Management Review (SMR) and Deloitte’s Digital practice, 87% of executives queried believe that digital technologies will disrupt their industries, yet only 44% felt they were adequately preparing for it. Gerald Kane, professor of information systems at the Carroll School of Management at Boston College and MIT Sloan Management Review guest editor for the Digital Business Initiative, compares insurers’ thinking about digital disruption to homeowners in disaster-prone areas who often seem caught off guard when an actual hurricane or cyclone strikes.

Source: MIT Sloan Management Review

So, why isn’t adoption of digital technologies a priority for more small- to medium-sized insurers? While many see the opportunities presented by digital technologies, perhaps they don’t believe the likelihood is high that digital will actually disrupt their own organization. But the authors of the research note that, if digital technologies represent an opportunity for your organization, they also represent a threat for your competitors — and vice versa.

I get it, change is hard… but, the argument, “we are not in a financial position to prioritize” is irrelevant to the discussion of digital technology investments. Competitors aren’t waiting for your company to be in a better “financial position” before they act. Moreover, because at some point in the coming years insurers will need to replace their growing faction of retirement-age employees with a younger, more tech-savvy labor force. And in a war for the best talent, the A and B players have absolutely no desire to work on outdated systems. So, what does that mean for the future of your company?

See also: Digital Insurance, Anyone?  

Just remember, technology is an accelerator for your company and your staff. In other words, the more digital technologies that are put into play, the greater and faster the return. Those insurers that ignore its call will fall further and further behind until they reach the tipping point and slowly fade away. Remember what happened to Blockbuster Video when it failed to adapt in a time of digital change. Don’t be a Blockbuster in a Netflix world.

Digital Innovation in Life Insurance

There is a view that the life insurance business needs to change or to innovate to remain relevant and reach new customers; if incumbent players don’t make an environment that appeals to new customers, someone else will step in and do it in their place.

It’s possible that big data warehouses – or mobile and digital operators – will mass market life and health insurance protection to their customers, based on the data they have about them. While we can’t rule it out, this outcome is unlikely for multiple reasons.

For a start, life insurance is not a simple transaction, and access to it is selected. It requires capital, distribution channels, underwriting and claims expertise, product knowledge and actuarial know-how. While these challenges may deter new entrants, they are not insurmountable obstacles.

See also: Selling Life Insurance to Digital Consumers  

Life and health insurance are closely linked to healthcare provisions; our products align with fundamental biometric events – including ill health, disability, disease and death. It’s no surprise we manitain a mainly medical approach to risk selection.

Technology offers new ways to manage risk that rely less on face-to-face disclosure and traditional clinical assessments. This is why we see so much interest in understanding how innovation might work.

Healthcare is adopting artificial intelligence, virtual reality, machine learning, sensors and other innovative technologies – including genomics – to deliver a more patient-centric approach. Insurance can similarly transform by adopting more customer-centric solutions.

In healthcare, digital channels and mobile health solutions are welcomed when they blend with traditional methods and work simply. For insurers, this could mean placing innovation into spaces where it helps customers and where it makes sense to augment existing ways.

See also: 2 Paths to a New Take on Digital  

This means the focus is on how we engage with people and offer them services linked to ensuring their health. The focus can move from life protection to life enablement, support that helps people lead a long and healthy life.

The industry needs the energy, innovative vision and technical skills of entrepreneurs. In turn, entrepreneurs need the network, customer base and data – as well as the insurance expertise – brought by insurers and reinsurers. Working together, we can create an environment where people will share their personal data, knowing we can be trusted to use it appropriately, to keep it safe and to have it be a force for good. To do this means examining the emerging digital options and working out how to optimize the benefits to our customers.

Common Error on Going Digital

If you’re an insurance professional who follows industry trends, you’ve probably heard the phrase “digital transformation” many times from consultants and industry analysts. And if you’ve been in the business for more than a few years, you’ve likely seen a huge uptick in the use of digital tools. But many insurers mistake digitization, such as collecting forms on a tablet instead of paper, for digital transformation. The truly exciting business developments in digital transformation are found in automation.

Digital transformation isn’t about going paperless, though that’s a nice side benefit. It’s not about using apps to support the same old processes. Instead, it’s about rethinking traditional ways of doing business and replacing old processes with intelligent tools that eliminate or reduce the friction in transactions between carriers and customers. It’s about creating processes that address persistent pain points for insurers and policyholders alike.

Traditional Processes Don’t Work in the Modern World

For property insurers, underwriting without adequate data is a huge pain point. Many carriers either use area averages that may or may not reflect actual property value to assess risk, or they send out an inspector to conduct an assessment and create a report. Neither option is optimal in a world where customers expect personalization, transparency and speed.

Assessing risk on averages can result in cancellations that disappoint customers and harm the brand. In-person inspections yield important data, but scheduling a time for the inspector to evaluate the customer’s property and home or business contents can be a time-consuming hassle on both the carrier and customer side. Carriers often wait for weeks or months to receive a report from an inspector. It’s not uncommon for up to 60 days to elapse between the coverage request and receipt of the report, which is frustrating for carriers and customers alike.

See also: Digital Playbooks for Insurers (Part 4)  

Why Digitization Isn’t Enough

The process many insurers currently use to capture underwriting data illustrates why digitization alone isn’t enough. Sending an inspector out with an iPad to file an electronic report might shave a couple of days off the underwriting cycle, but it’s using digital tools to support a process that is fundamentally broken. It’s a solution that doesn’t address the root cause of customer and carrier pain points.

Instead of putting digital band-aids on broken procedures, it’s time to rethink processes and change workflows. It’s time to evaluate solutions that go beyond digitization and look for truly transformative technologies that harness data, automation and machine learning to create more efficient, effective processes. And it’s time to apply insurance-centric computer vision to new applications rather than adapting products that weren’t designed to address the unique issues that insurers face.

Automated Processes Deliver a Better Experience for Everyone

So, how can automation and machine learning improve the customer experience and streamline carrier operations? Recall the underwriting process that is currently painful on both sides of the transaction: Rather than improving it on the margins with digitization, what if insurers reinvented the underwriting process entirely using technology that allows them to remove the friction from key processes and made the experience more personalized for customers while improving pricing transparency?

Thanks to automation and machine learning that improve key underwriting processes, this is a reality today: Carriers can provide a link to a customer or third party to conduct an inspection through a smartphone camera lens. A friendly, artificial intelligence (AI)-powered assistant walks users through the inspection, automatically categorizing and inventorying items to create a baseline — a rich media record of the customer’s property and contents in near real-time. Built-in, insurance-specific computer vision ensures that the AI inspector notices things a good human inspector would, such as the presence (or absence) of a fire extinguisher near an oven.

For insurers, this type of breakthrough automation eliminates the problem of delayed quotes and mispriced policies. It also opens new opportunities for the agent and the customer to work together to mitigate risk, which protects customer property and the insurer’s bottom line at the same time. It makes a formerly opaque process clear so that coverage is priced correctly, and, if there is a claim, there are no unpleasant surprises because customers know what they’re buying up-front.

From Customer Churn to Customer Delight

For customers, an underwriting solution that automates key processes makes getting quotes fast and easy, and it ensures that pricing is completely transparent, so they understand what they’re paying for prior to filing a claim. Using automation in this underwriting process makes it simple to document customer possessions, which provides peace of mind. Using this automated underwriting process, customers can follow step-by-step instructions from a conversational AI assistant, using a program that is intuitive and requires no training.

See also: How Underwriting Is Being Transformed  

Underwriting that leverages automation makes it easy for customers to work with carriers to price their premiums correctly, identifying items under warranty and making suggestions to improve safety. In the event of a claim, having full documentation of all customer possessions streamlines the claims process. Perhaps most importantly, an underwriting solution that automates key processes allows the agent to focus on customer relationships — enabling agents to be more “heads up” rather than “heads down” over reports and paperwork.

The underwriting technology described here isn’t a vision of the future; it exists now, and carriers who are looking for a competitive edge are evaluating AI-powered technologies like this today, so they can not only improve processes but transform them. Sometimes, an opportunity comes along to skip interim steps and embrace a better future. Insurers today have such an opportunity; they can skip digitization and move toward digital transformation by adopting automated, AI-driven processes, and the choice couldn’t be more clear.

Key to Digitizing Customer Experience

Every aspect of the way we interact with goods and service providers is becoming digitized, but it doesn’t work to go partway. As insurers, we have to ask ourselves, “What does a complete digital experience for our customers and policyholders look like?”

In my travels over the last year, I have run into experiences with very large companies and enterprises that have excelled in customer service in the past, but today are falling short in the new digital experience realm. I’ll share some examples, and, insurers, lend an ear. There are valuable lessons to be learned here!

Earlier this year, I took my family to Disneyland. Disney, of course, is a leader in customer experience as well as digital transformation. Disney has gone out of its way to improve a customer’s access to park information. The company has digitized the ride process with fast pass and even offer a suite of apps to improve the customer experience. What I experienced though, in my view, was a fundamental failure to plan a digitally transformed end-to-end experience.

See also: Today’s Digital Customer: It’s Me  

Most people buy their Disney passes on-line. That’s great! That’s fast and easy. But the park entry process is still highly manual. Season pass holders are mixed in with day pass holders; check-in agents manually process the passes, check IDs and passports and take photos for multi-day pass holders. Meanwhile, day pass holders wait in a line of thousands of people all corralled into 20 lines, 100 people deep. This results in confusion, frustration and many children having meltdowns in the hot California sun. It took our family 45 minutes just to walk into the park.

The point is, digitization is great, but you have to think of the holistic experience – everything from buying a pass to getting customers into the park with an easy check in to getting them out again, and everything in between. Disney is one of the best, but even Disney can fall short. The reason is because digitization changes not only the front-end buying experience but the back-end processes, as well. Disney has access to immense amounts of data, including online ticket sales, and has the power to predict wait times and improve service at check in. The lesson here? When creating a digital experience, use all the tools available to you and don’t forget about the nuances of the experience. #disneyland

Of course, I have had some great and pleasantly surprising digital experiences over the last year, too. I took a ski trip and got to experience the Vail Resorts Epic Day Pass. Ski lift tickets have been replaced with RFID-enabled cards that are read without having to wait in line to be scanned. These Epic Day passes also synch to the Epic Mix app, which tracks your runs and your day on the mountain from a number of scanners placed on the lifts and throughout the mountain. The Epic Day pass also can load your credit card for use all over the mountain, so no need to carry a wallet. This is a great example of innovation and digitization with pure customer experience in mind from start to finish.

Just as surprising is what my daughter recently told me about the new online application to sign up my grandkids for swim lessons in her tiny New Hampshire town. Gone are the days of phone calls and paper applications. She says that, because of the online application, registrations are the highest ever!

Now, back to insurance. Did I mention that we recently renewed our professional liability policy? Every year, we are required to make a formal submission. Our agent was on top of it this year, we renewed early, and we actually received our quote and policy – all electronically! And then this happened: I just received a paper letter informing me that the expiring policy is not being renewed! Old, irrelevant and confusing. This automated paper form letter is disconnected with the renewal process and status. Unfortunately, there are still many cases like this happening in insurance.

See also: Customers’ Digital Expectations

These are just some thoughts from my travels about getting digitization right or missing the mark when it comes to the end-to-end customer experience. But insurers, take note: It is important to look at what outside companies are doing to see how they are digitizing their customer experience. If a tiny New Hampshire town can do it for preschool swim lessons, there is no reason insurers can’t make some significant steps to go digital.