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Aidan O’Neill advises on orchestrating a customisable claims ecosystem platform in the new future at Lloyd’s

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In today’s fast-evolving Future at Lloyd’s environment there is a major opportunity for claims departments to add value by creating new sources of revenue, re-imagining their traditional roles and adopting an ecosystem mindset.

The London market’s reliance on digital technologies not only reshapes customers’ claims expectations, it also redefines boundaries within (re)insurers’ internal silos and departments. The market’s underwriters, heads of claims, audit, compliance and modelling teams and actuaries cannot avoid this phenomenon.

As the traditional industry way of doing things falls away, the future of insurance will be significantly influenced by platforms and ecosystems. A claims platform today can already allow multiple participants to connect to it, interact with one another and create and exchange value.

Successful digital behemoths such as Alibaba, Amazon and Facebook were all created on platform business models. According to management consulting firm McKinsey, ecosystems will account for 30 percent of global revenues by 2025.

Customisable claims experience

An ecosystem is an interconnected set of services that allows users to fulfil a variety of needs in one integrated experience.

This offers a potential insight into a future for the subscription-led market model that operates today and the visions presented by Lloyd’s Blueprint One document, which calls for a new claims orchestration, messaging and workflow platform to support streamlined processes.

The thing is, such a system is not some kind of new-fangled technology that will be developed two or three years down the line – it already exists as one of the market’s best-kept secrets.

My colleagues Graham Sheppard and Anthony Freeman recently gave a presentation to International

Underwriting Association (IUA) members where they showed that a customisable electronic claim files (ECF) platform – which can plug multiple application programming interfaces (APIs) into carriers’ claims systems – is already in operation today through DOCOsoft’s Claims Management System, processing millions of rich claims messages.

The presentation was partially inspired by the Future at Lloyd’s report’s exhortation to the market to embrace new opportunities by delivering a next-generation claims solution.

The aim is to embrace InsurTech that is powered by data and advanced analytics. We can transform the current claims service, allowing the market to differentiate itself from competitors and attract business as a result.

AI-powered triaging

Specifically, the report calls for a claims solution to deliver an interface for policyholders and all other market participants to improve communication and transparency.

It also promotes a new requirement for artificial intelligence (AI)-powered triaging and segmentation, routing claims to the right place throughout the claim lifecycle with full straight through processing for certain noncomplex claims.

The vision is of a “one-stop shop” claims service that handles noncomplex claims on behalf of the market, using leading technology, analytics and centrally procured services.

So the attendees on the day of our IUA presentation – many of whom have yet to work with DOCOsoft – were likely surprised to learn that the Future at Lloyd’s vision to build a new customisable claims system version of ECF has, in fact, already been built.

As Graham Sheppard outlined, more flexible graphic systems like Write Back – which ought really to be renamed “customisable ECF claims” – should be playing a part in an integrated digital claims strategy today.

Sixteen of DOCOsoft’s clients (and counting) already have such a system, enabling them to steal a significant march on their market peers and aligning them with the claims vision outlined in the Future at Lloyd’s.

The London market needs modern claims technology to introduce data insights, while better management oversight can be achieved with a new analytics capability. The market has certainly moved on from the days of ECF.

Outdated systems

However, outdated market-wide systems continue to hold back those London carriers that have not embraced the high-tech, smart colour approach offered by InsurTech innovators such as DOCOsoft.

Market pressures dictate we need more. Many claims teams are therefore turning to technology solutions that can plug in multiple external APIs, exchange rich claims messages, gain insights, remove duplication, automate processes and enhance performance.

A modern claims management system can help with cradle-to-grave claims – all in one place, providing customer satisfaction and a competitive edge of bureau, non-bureau and email notifications.

In addition to non-complex claims handling, the Lloyd’s blueprint says that the Market Claims Service will partner with data and technology experts to form an innovation hub for data science and AI. It will provide improved claims insights derived from multiple data and analysis sources. And it will benefit from a larger, aggregated pool of data available at Lloyd’s.

The claims solution will use external data from a range of sources, which could include Internet of Things-enabled devices and satellite imagery.

These will provide early warnings of loss events, thereby increasing opportunities to mitigate the risks. The event observer will lead to automatic generation of event-driven claims, based on triggers written into the contract (particularly for parametric policies).

In addition, it will provide cost effective and trusted information sources that can be used to remotely investigate and assess existing claims.

Driving efficiencies

New technology can integrate with underwriting systems, document management services, sanctions and third-party systems – a complete, customisable, lifecycle claims solution, driving efficiencies and speed of claims.

It can plug in natural catastrophe models, aviation flight data, shipping fleet movements, war and terror heat maps, claims reserving analysis, cyber risk perils and a whole host of other external APIs with cross-functional utility that can help to integrate an insurer’s internal and external data. Why not include an API plug-in to an Insurance Insider news feed? All this is possible to achieve today.

Claims are the largest spend of insurance companies, with around 20 percent of claims driving 80 percent of losses.

A 1 percent reduction, which can be achieved by leveraging advanced analytics, will achieve substantial savings. Machine learning can also bring unrelated claims and policies together to bring fresh insights.

Utilising robotic process automation where possible will speed up processing, reduce cost and enable a better customer experience.

Claims predictive analysis, using advanced algorithms, can determine the length of the claim lifecycle, loss development, ultimate value and fraud.

Claims triage and proactive settle models are able to predict which claims should be quickly settled and which should be handled by senior claims professionals. Meanwhile, claims leakage analysis could highlight inefficient claims processing practices, which lead to unproductive costs.

Insurance claims teams can leverage modern claims systems to improve their customer satisfaction, reduce costs and create a more efficient claims process while having more information at their fingertips.

Customisable claims technology is already waiting for you. It’s in your hands. Stay ahead of the game.

Aidan O’Neill is CEO of DOCOsoft

This article was first published in the Spring 2020 issue of Insider Quarterly