The Use of Data in Property Claims
By Ben Arthur, Customer Success @in4mo
Published on March 24, 2022 | 3 mins read
Data, MI, statistics, reports, the list of definitions continues, and so does the demand. Regardless of the industry, production of data, and the appetite for it doesn’t diminish. The Insurance industry is a prime example of appetites never being satisfied, despite the volume of data that is available.
Both Forbes and McKinsey have written articles about the evolution of using data in insurance. Both acknowledge Underwriting being the focus area initially but claims now firmly coming under the spotlight.
We have seen an evolution in the application of data analysis to revolutionize how the line of business operates. Being able to use vast pools of data to identify trends and associated costs has significantly developed Underwriting. Claims has also benefited enormously from the same data analysis approach. Implementing learnings from the data has prompted adoption of a lean model that means processes are compact, costs are controlled, and Insurers can operate with agile resource models that allow more focus on the customer. Property claims could learn a lot from the Motor evolution.
An article from The Insurance Thought Leadership points to a hybrid model of embracing technology and investing heavily in its people to upskill them in data literacy. The conclusion being that significant savings could be achieved from the claims process because of the insights harboured that would fuel innovation in digitalization and automation.
Within Property claims…
Variables within Property claims present challenges and some hesitation for many when approaching this topic. The importance is to focus on the controllable features, and identify what is realistic? From FNOL to closure, data can help identify trends in the same way as they did for Motor. Exploring those trends open endless possibilities for Insurers to update their approach to handling Property claims that aren’t explicitly about cost but can have a sizeable impact on other benefits too.
Embracing trusted partnerships through the supply chain and adopting a collaborative model can create unknown opportunities. In bringing together that expertise there can be the opportunity to create a route away from what would be considered traditional approaches, and instead experiment with emerging technologies.
Starting with the foundations of any claim, Insurers can explore what insights data can offer in how to improve the FNOL experience for customers? How is the process from notification to tangible activity from a customer’s perspective condensed? Are there particular prevalent perils that offer a greater opportunity to pilot process alterations that can be measured by reductions of time in specific processes, and increased customer satisfaction?
Following that thought process through the claim can data help with improving approaches to repairs that align with the increasing demand for greener solutions? Can those reviews identify opportunities where substitute materials could be more sustainable, and cost-effective? Regardless of initial outlay it is imperative any technology investment shows a return through reduced lifecycles, cost, and customer retention.
And what about the customer?
A lot of this work will likely be lost on a large portion of the personal line customers. The transient nature of those transactions mean that cost dominates the selection process at the detriment to all other features. The younger demographic though will appreciate the investment in apps, cash offers and the move away from traditional processes that instigate efficient solutions in todays fast paced world. Being able to use data to facilitate greener solutions, and quicker connection to emerging trends could, in the future pay dividends (?). Having the patience to see through this long-term plan will also be fraught with challenges, but offers the opportunity for the Insurer in question to build a brand for the future.
Commercial customers however provide different dynamics. Those numerous dynamics mean that playing for the majority isn’t straightforward. Core offerings with the opportunity to customize appears to be the most effective route forward. Once in partnership it is the responsibility of the Insurer to understand how they can use the data available to educate the customer on risk management and claims response. Cross selling becomes a more valuable practice to the Insurer in growing the customers footprint with them.
Data, again, can help in demonstrating the importance of effective property maintenance and ability to respond in reducing claims costs, lifecycles, and overall impact to the business or daily life of residents. Using data smartly by investing time in understanding why you want to review it, and what the objective is, combined with keeping it simple are the actions that will help drive innovation, loyalty, and visible improvements in the metrics you choose to change.
Data can always be made more convoluted but used simply and aligned to a vision it has the power to help Property claims evolve.
Forbes: Transforming The Insurance Industry With Big Data, Machine Learning And AI (forbes.com)
McKinsey: Harnessing the potential of data in insurance | McKinsey
Insurance Thought Leadership: Data Modernization Isn’t One-Size-Fits-All | Insurance Thought Leadership