Reinventing the claims journey in the digital age

Pranama Perera, Chief Technical Officer of Softlogic Life.

By: Pranama Perera, Chief Technical Officer at Softlogic Life PLC.

The insurance industry is at the centre of a fundamental transformation enabled by digital technologies. While customers are continuing to embrace new digital mediums, technologies like AI (artificial intelligence), blockchain and machine learning are ushering in a range of new products which are based on analytics and data. Insurers worldwide are using these digital elements to convert either policy-buying or claim settlement (or both) into a simple, satisfying and fast process.

With severe competition to attract potential customers, insurance companies must act quickly to embed digital technologies into their processes. For life insurance companies, digitising the claims process holds great value. To seize the true value of digital, the claims process of life insurance must get on board the proverbial transformation train to develop a digitally enabled, customer-centric business that shines in three areas of claims – customer experience, efficiency, and effectiveness.

The moment of truth

From deterrence to loss notification, valuation to handling, and finally, settlement, the claims journey of a life insurance policy has always confused customers.  Policyholders have to pay in advance for an intangible product that covers the policyholder and their loved ones in a risky situation. When they want to claim what they were promised, which is called the ‘moment of truth’, they have to go through a rigorous and time-consuming process.

With customer expectations changing significantly in a digitally-infused backdrop, most life insurance companies are well aware that they need to transform their claims process. Customers want a simple yet real-time (and transparent) process that allows them to collect their claim with ease. They will decide when to talk to an insurance agent and when to interact virtually, and most importantly, they want the insurance company to serve them 24/7. To gain and retain more customers, life insurers understand that they need to provide a more customer-centric service.

In a recent study done by global management consultants Oliver Wyman, customers who pay a very high premium as said to expect exceptional service at the moment of truth. However, with digitisation, insurers can reduce loss-adjustment expenses by more than 20 per cent and improve customer satisfaction by up to 30 per cent and thereby extend exceptional service to all customers, the study further highlights.

Where to start?

The million-dollar question is, where to start? A true digital redesign of claims fits in a persistent focus on the customer with a value-driven approach. Insurers should adopt a customer-centric mind-set and undertake an end-to-end reassessment of their customer interactions – starting with the most relevant customer journeys. It is not about just throwing technology at the problem in a haphazard manner. Companies need to take a step back and reimagine the customer journey – from assessing customers’ expectations to embedding those expectations, along with the value proposition of the insurer, into the claim process.

In this digital age, the claims value proposition has to supersede the fundamentals of traditional claims management. It sets a goal of providing an outstanding omnichannel customer experience supported by intuitive digital methods. Life insurance companies should aim to implement a faster, analytics-driven approach when it comes to claims handling and fully automate the claims handling processes for clear and simple cases.

At Softlogic Life, we believe that one of the key success factors towards customers is speedy claim settlement and paying fairly while eliminating bogus claims through our digitally-enabled, robust claim process. Even before the pandemic, we had deployed a dedicated claim submission digital platform called ‘Claim it’. It automatically reads an invoice to understand which part of the policy covers the illnesses and what limits are applicable to each area and thereby allowing our customers to complete their claims on time in full.

‘Claim it’ can also approve payments which are then interfaced to the CEFT banking payment mechanism so that the customer gets paid – all in one easy application. The majority of our claims propositions are now handled via the digital platform, and the decision to digitise our claims process played a critical role in creating this competitive edge in claims processing, which is considered a revolutionary improvement in the life insurance market in Sri Lanka. Furthermore, Softlogic Life strengthened its cashless claim settlement process by increasing the number of partner hospitals. Digital payments methods were used to settle the hospital payments with zero physical touchpoints. This helped to continue payments to the hospitals during the lockdown period without any interruption.

Reinventing the claims journey

A successful digital transformation profoundly reinvents the claims customer journey with the help of digital technologies. To support these efforts, the claims department needs to form deep, cross-functional collaborations teams such as customer care I and marketing functions. Bringing the transformation to life requires new roles, including data scientists, customer journey ‘owners,’ and user experience designers, and a digital way of working, which must be instilled in the organisation.

As the world moves fast and customers look for digital solutions, it has become imperative for insurance companies to redesign their claims process radically. Those insurers that move quickly and firmly to innovate the claims function can equip themselves to deliver against the new, higher customer expectations – while increasing efficiency and improving claims handling accuracy in the process.