Consumer behavior has changed dramatically since the 2008 financial crisis. Insurance customers in particular have become more demanding, more critical of carriers' attempts to differentiate themselves, less trusting and loyal, and more candid about their efforts to find products and services that match their needs. Accenture research indicates, for example, that 67 percent of consumers would be likely to switch to an insurance provider that makes information and advice available whenever they need it, and that 59 percent would switch to an insurer that made all services available via all access points. These "new" customers are also willing to pay an average of 11 percent more for the right products and services.
While insurers strive to meet different (and higher) consumer expectations, they also must deal with much higher volumes of data generated by a wide range of new sources, including social media. There is plenty of insight available through social media to insurers — if they can make sense of the 25 billion pieces of information shared every month. Other information sources include commercial databases, usage data collected through telemetry and global positioning systems, and asset damage records collected by the millions of radio frequency identity (RFID) devices that are now commonplace in the supply chain.
Developing a new claims playbook — one based on consumer needs and expectations — starts with four key elements:
1. Technology. We continue to see the "consumerization" of technology, which, along with rapid technological evolution, makes insurers uncomfortable. Carriers should work to become more open and flexible, regardless of the platform through which the technology is accessed. This will require architectures that are agile enough to respond to new developments and to integrate with other systems.
2. Data. While data is part and parcel of technology, insurers should insist upon high standards for data management. Technology must capture data — including both structured data and unstructured data from a wide variety of sources, including social media — at a minute level of detail, interrogate that data in real time, use it to provide customer and outcome analytics, and then respond with new business processes based on the customer and the circumstances of the claim.
3. People. Accenture research indicates that claims professionals spend nearly half their day on activities that do not affect the outcome of the claim. This means that the industry is operating with the pedal only halfway to the floor. Insurers need motivated claims professionals with access to the most effective set of tools and support from strong back-office capabilities.
4. Metrics. Carriers need a new set of metrics to ensure that performance objectives are aligned. Today's metrics, commonly focused on "inventory" such as file counts, closure rates and average pendings, should give way to a balanced scorecard of measures that reflect each individual's impact on the claims outcome. Properly designed, such metrics will encourage collaboration and innovation.
These broadly defined elements of a consumer-focused claims operation should, ideally, be linked through a comprehensive view of the claims model, including personnel, processes and technologies, and how that model supports the company's mission and objectives. Too many insurers pursue quick-hit tactical system and process improvements at the periphery of their claims operations. Given changing consumer expectations, however, the best approach is one that rethinks the claims organization. Building on the right operating model with a high-performing workforce — supported by the right technology — is the straightest path to better service and improved outcomes.
Michael Costonis is managing director of Accenture's global claims practice.
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