Digital loss adjusting in the new era of claims

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The recent publication ‘Digital reinvention- Trust, transparency and technology in the insurance world of tomorrow‘ is one of a series of papers and articles on the topic of how ‘digitalisation’ will change the insurance industry.

There is an inevitable impact in the claims area. Digitalisation will inevitably affect loss adjusters, claims inspectors and other third party claims managers in both personal lines and commercial claims – and will also affect the service which insurance customers receive..

We already see evidence of change:

• New technologies are beginning to change consumer expectations, modify business models and create new types of competition (and new entrants)
• Current technologies are becoming more impactful as they ‘bed down’
• New technologies are emerging – driving radical change

Already we see evidence of disruptive models emerging. One example is the creation of a new business model for claims inspection which is a combination of live streaming video, crowdsourcing and advanced data analytics. This model in effect uses semi-skilled labour to visit a property damage incident which is the subject of a claim, stream the information to a ‘competence centre’ (real or virtual) and which allows the policyholder to hold ‘real-time’ conversations with the competence centre. The marketing tag line is that insurers can ‘see every claim’ and ‘see every risk’.

Some insurers are already thinking about the use of drones in the claims process, to carry out remote inspections.

Digitalisation in its broadest thinking will affect all parts of the claims process and individuals involved.

In the claims process
• The customer will be more involved in the decisioning process – and claims settlement will be more personal, flexing around the needs of the individual
• Current claims value chains will become replaced by claims ecosystems to meet individual circumstances i.e. family commitments
• New ecosystems will emerge starting around the ‘claims experience’, as opposed to the claims ‘process’

For the loss adjusting and claims management businesses
• Loss adjusting businesses will be challenged by new and future technologies – some of which will be disruptive to the traditional linear model
• Their traditional value drivers will need to be reassessed – and they will need to take a hard look at where they add value
• Companies will need to develop new competences, and undertake investment – albeit that SaaS will ease that pain.

For individual adjusters
• The role of the adjuster will be redefined – in an environment which is interconnected, instrumented and intelligent
• Working practices will change – requiring them to provide service ‘anytime, anyplace, anywhere’ in an omnichannel environment
• New training will be required, professional qualifications may be impacted, and we will create a concept of the ‘digital loss adjuster’
• New analytical techniques will emerge in loss quantification

Perhaps the biggest party affected will be the policyholder – either commercial lines or personal lines – who will ultimately see a transformation of the service received at the point of claim.

The future brings a more customized and personalized service, delivered more quickly, and in a less confrontational way. Given that insurance is all about satisfying the ‘moment of truth’, will digital technology enable us to create a ‘golden age’ of claims management?

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