Davies Group’s head of claims solutions, UK and Ireland Kath Mainon, discusses end-to-end claims with Insurance Times and the benefits of outsourcing to fewer strategic partners
1. What are the incentives for brokers and insurers outsourcing end-to-end claims to fewer strategic partners?
There are some significant benefits to be had from alignment and investment in strategic partnerships. Alignment means that strategic partners can gain a deep understanding of the insurer or broker approach and ethos. Processes and approaches can be tailored, and combined with dedicated teams, so that the strategic partner is truly delivering the insurer or broker brand.
Strategic partnerships also support investment, for example in technology and innovation, in a way that is hard to sustain when relationships are more transactional. Insurers and brokers need their service providers to maintain heavy investment to stay at the leading edge of service delivery and customer experience. The long term strategic partnership model is one of the best ways for insurers and brokers to outsource and reap the benefits some of the technology investments they need.
2. Are there any risks or challenges involved?
Narrowing the range of partners that you work with brings some risks as well as some benefits. Insurers and brokers who work with this model usually take a lot of care to check on things like financial stability and system robustness as well as investing in ongoing governance.
The other potential downside is that the insurer or broker misses out on a market development or an innovative approach because of being tied to a relatively small supplier panel. One of the benefits of the open market is that it encourages innovation and differentiation. This is what insurers and brokers need to weigh carefully when selecting outsourced partners. The key question is – is my supplier panel committed to continual investment in improvement?
3. Many insurers and brokers are developing ecosystems, to partner with different businesses to on certain services, why is this approach beneficial for insurers, brokers and customers?
The ecosystem approach can be really powerful, especially when combined with seamless integration with suppliers and sometimes even between suppliers. From the insurer or broker point of view, you can select and combine the best of breed across a number of key services.
Linking up systems gets round the problem of adding friction into the customer journey, and enables the insurer/broker to see and interpret data across the whole of their supply chain.
Some insurers in particular do this really well, and regularly bring their key strategic suppliers together in strategy sessions. These encourage collaboration for the ultimate benefit of the end customer, and enable strategies to be developed that cover the whole supply and value chain.
4. What are the key components or deliverables of an effective end-to-end claims process?
A good way to think about this is from the point of view of the customer. If we imagine a person or a business needing to make a claim they probably want a variety of options in terms of how to notify their claims and keep in contact throughout the course of the claim. So the claims process needs to include notifications and updates by telephone, email, web or chat for example.
Validation of the claim needs to be as quick and seamless as possible, which implies digital integration with policy records, and fraud screening and proactive document collection and validation.
Fulfilment – fixing and rebuilding things and delivering replacement things quickly -can be one of the hardest areas to get right from a customer point of view. One reason for this is the wide and complex range of specialist suppliers that insurers need to have available, and the need to ensure every individual supplier lives up to the promise the insurer or broker makes to their customer.
Outsourced fulfilment enables the insurer or broker to agree their service standard and approach with a single supplier, and know those agreed standards will be delivered consistently across a wide range of situations.
All of these things need to be in scope for an insurer or broker who is considering outsourcing. Equally important, of course, is the shared commitment and purpose. The best outsourced partners are those who spend time thinking about and understanding the needs of the broker or insurer as well as their customers, and are committed to continually improving their services to meet those needs.