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Is technology and change removing humanity from insurance?

I started my career with one of the first direct insurance providers in the UK.  Policies were sold over the phone, direct to customers.  Claims were phoned in by the insured and answered by a claims handler who was empowered and trained to manage and resolve them.  The systems were centralised and fully supported the claims process.  They were the first to include service elements like preferred repairer networks, automatic letter production and we even removed the need for claim forms. That was 36 years ago. 

Since then, I have seen many in the industry breaking down the claims process into its component parts.  First Notice of Loss would be managed by a dedicated team, repairs managed by another, third party claims by another and complex/injury by yet another.  There were also coverage and fraud specialists to pick up those exceptions.  New staff would inevitably start their career in the First Notice team and then would be a clear careers progression model to move through the other departments or specialise in one.

After that, the industry mapped processes and developed workflow between parties and functions.  We created work baskets and digitised folders.  Each team member could pick up their work items each day, based on the age and priority of the task outstanding.  Then we added robotics to do some of those repetitive tasks, created web forms and chatbots to be our first line of service, with the clever ability to switch over to a human when required.  Today, we are now desperately getting to grips with AI to see what business cases we can create and add it in to our claims world before the competition beats us to it.  We are having to consider ‘rules of engagement’ and ‘guidelines’ for this new artificial world because we do not fully understand it and cannot really control it.

However, with all of this technology, change management, project management, investment and specialisation, do I honestly think that the claims service for the customer is better now than it was 36 years ago? Frankly, no! 36 years ago we were a team of people taught to care and trained to get to grips with, and close out each claim as quickly and cost effectively as possibly.  This was good for the customer and good for business.  We were encouraged to use the phone rather than letters or memos (remember them?) to keep the personal touch both for customers and third parties.  We saw innocent third parties as potential customers.  The customers loved it, and the third parties appreciated it. 

Over the years, I have witnessed customers having to speak with several different team members to get a complete picture of their single claim.  I have witnessed frustration with getting caught in technology ‘loops’ without anyone to speak to.  I have seen customers suffer from inadequate responses from chat bots, struggling to get to a human and even when they do, they get people with limited training who cannot resolve their issue. And this is supposed to be progress? 

Am I saying that all technology and change is bad? Absolutely not. But I do often ask what is really driving the change and whether it is done for the right reasons.  Are we focused on the right outcomes when looking at complex, expensive and time-consuming solutions to problems that could be solved by much quicker, simpler means?  An example I heard recently from a friend was during an IT ‘pitch’ to a client.  The client expressed an issue that generated a number of questions through their website in relation to a particular business unit.  The client asked the IT consultant how they would deal with this challenge.  The IT consultant described that they would create a structured question form, which would create workflow and allow analysis of the questions raised, which would then enable bespoke responses to customers – boom, sorted!.  The client then told the consultant that he had already addressed the problem by simply changing what was said on that part of the website – no more questions. Done.  Double Boom!

I was always told to consider People, Process, Technology – in that order.  This is for good reason.  Until we understand what we want and need to do for people (customers, staff, etc.) we do not know what the real problem is.  Once we understand the problem, we need to critique the process around that function and streamline it.  There may be many quick fixes that we can apply without spending much time, energy or money and these should be fully explored first.  If technology is required, then it needs to be measured and proportionate.  Technology, robotics, AI, Machine Learning can all do amazing things.  We just need to focus them on the right areas and not fall into the trap of “this is an exciting piece of kit, what can I use it for?”.  Many will tell you that their technology is the answer, but what is the real question?  And does it need a big, expensive, shiny solution?  Does it need Artificial Intelligence or just a little good old-fashioned Intelligence?

When I look back over the 36 years, it feels we got it right when we started.  The person with the problem, contacted the person who can fix it.  Since that time, we have put so many obstacles, fractured processes, disparate functions and “clever” technology in the way.  In doing this, we may have removed much of the humanity from our proposition.  It may be seen as more efficient (but is it really?), it may be very clever and shiny, but it still represents obstacles for our customers.  And I am sure that if I asked most customers today what they really wanted, it would be what they always wanted.  “I have a problem and I need someone to fix it, now.  I don’t care how clever your solution is and I don’t care how much it saves you.  I just want to know it will fix my problem, quickly”.

At Ecliptic Technology, we therefore strive to focus on what the stakeholders need first.  Then we assess what improvements are required to the processes around those tasks.  Only after that, do we apply technology to refine or replace the new processes and deliver better outcomes for all users.  We may not always get it 100% right but the approach reduces the risk of creating obstacles for our customers.



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