Insurance Claims-as-a-Service
It’s almost 3 years since my co-founder and I decided to act on disrupting insurance claims. That’s a lifetime in insurtech. Our vision was to do what no insurer had ever done before and create a customer-centric claim. Let me explain.
For over 300 years the insurance industry has defined itself as a loss re-imbursement business. In the event of a loss, insurers promise to put you into the position you were in before you incurred the loss. Only they don’t, at least not all the time, and (and parametric claims aside) not in real-time. Instead they have perfected an insurer-centric process, one that they control and where inherently they are incentivised to not pay out. The customer experience is whatever the insurer says it is, and knowing that insurers see loss reimbursement as a zero-sum game, what’s good for the customer is bad for the insurer and vice versa. If that claims takes a little longer to settle and 50% of customers give up, the insurer can (and do) still proudly advertise paying out 97% of valid claims. Customers are circumspect providing information, suspecting that insurers may latch onto the smallest of details to deny the claim. Even the most law-abiding and honest customers may find themselves exaggerating the claim in order to ensure that they are indeed put back into the position they were in. Any wonder then there is a lack of trust in the industry when a lack of transparency, honesty and mutual interest aren’t insurer values?
Insurtech’s first unicorn, Lemonade, recognised this inherent conflict of interest and sought to instead charge a flat fee for providing it’s service, allowing policyholders to nominate charities to benefit from surplus funds. Likewise, P2P insurers offer their members a say on what events are covered and then return any surpluses back to the community. At the point of claim however, the claims process hasn’t fundamentally changed.
At that initial founders meeting we looked 5 years into the future and asked, what would it take to turn the claims model upside-down from an insurer-centric model to being customer-centric? The moonshot (something 10x better than the current market) was to understand the technology that would be needed to settle even the most complex claim in real-time at the point of loss and to assume a world in which there was no claims handlers. We challenged the 300 year old definition of insurance as a reactive loss reimbursement business. If an insurer were truly customer centric they would instead re-invent themselves as a proactive loss prevention service, and make insurance an invisible utility whose goal was to protect the customer from any harm to anything they held dear. But if we couldn’t convince insurers to prevent claims altogether, then the next best thing we could do would be to have a vision of real-time claim compensation no matter the level of complexity. Claims-as-a-Service was born.
Time for a roofshot (something 2–3x better than now). Our initial design challenge was how we could automate customer data capture processes. We all know that conversion drops off a cliff the more questions you ask. If insurers were to have a digital product that could convert as successfully as telephony, it would have to be incredibly immersive. We adopted a conversational UI approach before chatbots became mainstream. It was impossible at the time to imagine how chatbots would ever reach a tipping point given that they fell over at the first hurdle, but we believed they would be seen as the new mobile apps. Our relentless focus on design led to a conversational UI that became so immersive we were able to convert an insurer-centric 20 minute plus customer call to a 5 minute self-serve process, including document signing. Zero downloads and zero insurer intervention. Just exquisite data-capture experiences. Since then, AI-driven conversational UI has proliferated with Cognigy and Ushur being insurtech examples. But we didn’t stop where they stopped.
Our vision remember was wider, much wider. Only having a conversational UI/chatbot is like clapping with one hand. With decades of deep insurance domain experience we understood how implementing one-sided solutions would break-down when it came to customers wanting to seamlessly switch from digital to traditional (for the claims handler to take over), or start with a conversation but move seamlessly to digital with no data loss/repetition. Hence why we developed a lightweight claims management system so claims handlers could jump-in at any time or handle exceptions when customers didn’t complete digitally. With Claims-as-a-Service being a Chatbot + Claims Management solution, insurers and third party administrators could optimise their channel mix. Customers that were digital-natives would require zero touch. Customers that were comfortable with digital could do so safely, knowing they could switch into livechat or phone at any time, whilst customers not wanting digital at-all could be served as they always have been. To create the end to end digital claim, you had to think beyond the level of an individual task (e.g Cognigy, Ushur) and instead think in terms of a complex web of long-running claims processes running either in linear or parallel fashion. Insurers have no experience of this design complexity either, nor a reputation for IT change, so we aimed for another roofshot. How could we enable anyone in any business to be able to design and launch their own business process applications without any IT involvement? That led to us creating our “Design” application —a zero-code/low-code application enabling business users everywhere to create customer-centric journeys and the automation around these tasks in hours, leveraging out of the box templates designed to solve real-life complexity.
To extend Claims-as-a-Service beyond the customer and insurer we went for our 3rd roofshot, and developed an open eco-system available to all to turbo-charge the real-time, digital touchless claim. Real time liability decisions, real-time evaluation, real-time fraud detection — all could be plugged into the eco-system enabling anyone to simply turn the integration on. No need to evaluate, no need for months of protracted procurement negotiations, no need to wait for IT to open up a gap in their roadmap, you could just turn it on today, PAYG, and either keep using it if it works or turn it off if it doesn’t. With zero code. Claims-as-a-Service was now chatbot + claim management system and tech eco-system, loved equally by Operations and IT.
At this point, perhaps we start to look to you like an insurtech alternative to Guidewire or Duck Creek, just without the price tag and time lag :-). They however stopped at creating digitization for insurer-centric businesses. Wait, say that again? Sure. Guidewire and Duck Creek were designed for insurer-centric businesses. Whilst they are now adding on additional capability (either building this themselves or opening marketplaces) these only help insurer-centric businesses add a customer friendly feature here and a digital capability there. Make no mistake the end result is still an insurer-centric business with the same values. Without wanting to do anyone a dis-service, isn’t this just the proverbial lipstick on a pig? It helps insurer-centric businesses think and communicate that they are doing digital (digitizing) without actually seriously questioning what digital truly is. To give the appearance of digital is easy. To be truly digital is hard. To do that insurers would need to break-up the neat, compartmentalised set of supply chain contracts they have that dictate allocation and think less in terms of hand-offs between insurer, supplier and sub-supplier and instead about how customers can access these supply chain services as and when they need it.
Time for a 4th roof-shot. By designing Claims-as-a-Service with a micro-services architecture in mind, there’s nothing stopping you (or anyone else) from developing an integration into that supplier and then that service being available to the platform for you to monetize too. (By the way our Integrate API product enables you to sync your cloud platform data with your core system of record should you need it, in case you mistakenly thought you had to rip out Guidewire or Duck Creek. We play nice.)
For us the pursuit of truly digital, customer centric claims isn’t a question, it should be a given. Claims-as-a-Service has a dual meaning — the familiar technology term to denote a managed, always-on, cloud-based service, but more importantly a reference to that founding vision of claims-as-a-service to the customer and a visionary call to re-imagine claims from a customer’s perspective.
If you are talking about the “customer journey” (and I hope you are) can I suggest you stop and instead start talking about the journey you need to go on as an insurer instead (and offer truly customer centric digital solutions).
