Claims systems need to be ready for the future as well as the present, says Tim Crossley
Footballer Roy Keane once famously said: "Fail to prepare or prepare to fail," which all managers know means act now unless you want to suffer the consequences.
To everyone providing an essential service it's a statement - explicit or otherwise - that you make to your existing and potential clients everyday.
Some customers react by begrudgingly making that stress purchase, while others feel security and buyer satisfaction once the cover's in the bag.
Many ignore it altogether and take the 'it'll never happen to me' attitude.
But think about how you react when your suppliers give you the same message about your industry and the claims process environment. Too busy to sort it? Denial?
It is an unavoidable fact that many claims systems are coming to the end of their shelf lives. With every quick fix, insurers are postponing and making it harder to justify that critical platform change.
Add to that the ever-increasing regulatory burden and the product development team's constant hunger for something new, and you're juggling a few crucial balls.
But if you take the do nothing option, you'll be watching your competitors clean up.
Elsewhere it's different.
Forrester Research recently reported that as many as one in five US insurers are installing a new claims system.
The main reasons for this are: a lack of flexibility in their existing systems (40%); the high costs of integrating their existing systems with other applications (38%); and the high cost of maintaining existing systems (32%).
Industry challenge
The problems and challenges in insurance claims are not going to go away - they are going to get worse.
Those in charge of claims systems need to wake up to the fundamental industry challenge: if you don't look far enough ahead and plan for new claims scenarios, your current claims processes will prevent you from achieving your future business objectives.
Maybe insurance isn't the most visionary or innovative of industries, but it deals very well with the here and now, and it's competing for customers like it has never done before.
It's time to focus on the other end of the business and sharpen up the claims process.
The insurers who take the plunge will ensure that they and their customers will enjoy a fully integrated, end-to-end claims platform that keeps costs low and adds huge gains to their brand through improved customer satisfaction.
With forward planning as a theme, Guidewire has made some predictions for 2010 that will have a major impact on the back office (see column on left).
Some might consider these to be far-fetched, but this list is not exhaustive. Fraud has to be one of the threats and opportunities for insurers now and in the future.
By revolutionising the claims process, insurers are well placed to save money, give customers a fair, trouble-free experience and prevent fraud.
And no article about the future would be complete without mention of globalisation, technology and future uncertainty.
So, the message is: act now and make sure that it is the competition that suffers the consequences of your actions. IT
' Tim Crossley is vice president and general manager of Guidewire UK.
10 things which could affect your claims environment by 2010
1 Personal claims history on national ID cards to combat fraud, corroborated by police at scene of accident or claim
2 A major drop in motor insurance claims, but a huge increase in building claims
3 More smaller specialist service providers, making it harder to manage claims costs and experience, but easier to cope with spikes in demand
4 'Called in' claims easily dominate 'typed in' claims, with claims tracking available as it is today via the internet
5Proactive customer services. Best practice will be proactive notification via digitised voice messages of the status of a claim or messages to mobiles
6Whole customer segments, such as 17-year-old male drivers, buildings on flood plains and obstetricians, being uninsurable
7 Fewer, but higher value claims becoming the norm, many of which result in litigation
8 Profitability determined by claims, not underwriting. The opportunity to invest premiums declines as monthly premiums reduce. Could this be the end of the annual premium and the start of five to 10-year cover premiums?
9Skills shortages in service provider manual workforces will exacerbate the claims inflationary pressure. Insurers set up 'trades' academies outside the UK to educate and control its service providers
10 Google is an insurance provider. Who has better data to make pricing decisions? Who has more capital to invest?
