Remember blockchain? It was the mantra being recited over and over again, by excited insurance devotees only a few short years ago - and it was going to take the industry to a Nirvana of technology-inspired transformation.
Hardly anyone knew what a blockchain was or could do but many of us were devotees until the blockchain craze finally burnt itself out around about 2018.
Maybe blockchain’s time has finally come, however, as insurers begin to realise the future potential benefits of distributed ledger technology, which ranges from streamlining claims to enabling better transparency in contracts.
Full synchronisation of data and contracts among multiple parties is gaining real traction in the insurance community, according to Antonio Di Marzo, head of products at global insurance industry consortium B3i, in a recent insurance finance report published by Raconteur. Indeed, says Di Marzo, there is a huge opportunity to automate all the post-placement processes.
Ultimately, market-wide inefficiencies can be reduced while still maintaining processing standards. The advantage of using blockchain in insurance is that it builds trust between participants and links them in the same ledger.
The pandemic has accelerated some trends – blockchain included. Gen Xers and Baby Boomers currently hold the purse strings when it comes to investing in new forms of London market technology.
They are no Luddites when it comes to making business-based technology transformation decisions, but experience has taught them to be wary of the next big thing in technology. Sometimes it is better to miss a wave, pause, take a deep breath and catch the next, better wave.
Hopes are also mounting that blockchain can finally eliminate friction in the administrative processes needed to execute contracts. Smart contracts are defined by digital parameters and programmed logic, and the contract can self-execute when the agreed conditions are met. This allows the execution to be deterministic and therefore predictable.
Smart contracts look likely to become part of future business transformation but what else is new in the claims technology of the future?
As a new TINtech reportoutlines, most transformation projects involve making a specific claims process or series of processes work better – for example, streamlining first notice of loss, getting the claim settled faster etc - but they don’t involve re-evaluating the process first. The mantra must always be: “Don’t automate bad processes”.
This is where digital intelligence can enable claims teams to create meaning from data, which can then be used to discover patterns and insights that feed into better customer experiences while, at the same time, delivering operational efficiencies.
DOCOsoft has been investing time and resources into delivering such insights and, indeed, we have been offering demos to a number of our clients to showcase our technology in this area.
Another trend in future claims technology is the greater quantity and new types of data available that might enable organisations to create better customer risk profiles and better understand customer behaviours.
Digital advances and new analytics can allow insurers to harness this data and engage with customers in new ways, ultimately opening the potential for insurers to reduce risks, prevent losses and proactively reach out when a loss occurs, rather than waiting for the customer to contact them.
Claims is fundamentally a series of transactions and processes that involve decisions, data, and information - all of which are time sensitive, according to the TINtech report. We would certainly echo the report in saying that simply replacing claim systems is not going to make the difference if the processes that those transactions depend on are broken.
Once effective processes are in place, insurers will be able use digital intelligence to enhance the claims process, make data driven decisions, pursue more proactive communication with their customers. They can then seek to move the focus towards risk mitigation and claim prevention and so will be well positioned to pull ahead of the competition.
The age-old fear of course, is that technology is potentially a threat that could lead to more jobs being taken away, but analysis from significant market players such as Zurich - across its global population of 7500 people working in claims - is that far more knowledge will be augmented by technology than will be replaced by technology.
The company believes in helping its people adapt to digital; they believe in using technology to enable and augment what they do.
The biggest measures of value should be reduction of claims spend and more accurate policy pricing, or a better claims experience.
DOCOsoft is all about giving claims handlers the tools to augment their capabilities and taking them on a journey that helps them to provide added value to their customers.
We are engaged in a number of ClaimsTech initiatives ranging from day-to-day refinement work on Brexit Part VII Transfer, Peer review management and a new update to the expert management module to support GEMINI.
Our automated sanctions checking module has been described as groundbreaking by clients, delivering additional controls and efficiencies.
Looking to the future, DOCOsoft is well aware of the impact of cyber on the insurance sector and the future impact on underwriting. Could capturing additional claims data help to understand these risks? We think so.
There is much to look forward to in the development of future technology for claims.
