3 Tips for Insurers to Stay Competitive with a Digital Claims Experience

Alaine Dole, Insurance Industry Marketing Manager
February 15, 2022

Every step of an organization’s customer journey plays a role in overall customer satisfaction. But for insurers facing increased competition from emerging insurtechs, the digital claims experience is perhaps the most crucial to get right. According to EY Global’s Consumer Insurance Survey, 87% of policyholders say the claims experience directly impacts their decision to remain with their insurance provider. 

Digital Claims for Insurance

To up the ante even further, insurtech funding has been increasing exponentially. In just the first three quarters of 2021, funding hit $15 billion—more than double the funding for all of 2020. 

Confronted with these waves of change, insurers need to prioritize optimizing the digital claims experience for policyholders. Filing a claim is a policyholder’s greatest moment of vulnerability, and their satisfaction throughout the claims process is a key indicator of whether they stay or go come renewal time. 

Here are three tips for insurers looking to differentiate their claims experience to increase customer satisfaction from first notice of loss (FNOL) to close. 

Tip #1: Get customer data in order.

Data is omnipresent—there is a lot of it, and when it’s in order, it’s a critical resource for claims handling. But when it’s not in order, the customer experience suffers. It’s not uncommon for insurers to house data in upwards of 30 enterprise systems, and chances are those systems aren’t integrated seamlessly for optimal data management. 

These disparate systems leave insurers with siloed data, which can stall the claims process and cause even more inefficiencies in the background. IT departments devote the bulk of their time and resources to “keeping the lights on” and maintaining costly legacy and core systems. Forrester Research estimates that maintaining older applications and systems typically costs 70% or more of an organization’s technology budget. Over time, this approach incurs high maintenance costs and technical debt.

Rather than develop homegrown manual processes to organize this data or sunset and replace all 30 solutions, insurers should aim to automatically bring their existing technology together into a single, 360-degree view. 

Low-code platforms that are built with open APIs can integrate seamlessly with existing technologies and bring data into a single source of truth without data migration, creating a single engagement layer across the entire claims process. This helps insurers stay agile with a tech stack that integrates with the industry’s ever-expanding digital ecosystem of IoT networks, telematics devices, and insurtechs. It also empowers staff to concentrate on more high-impact work and improve customer satisfaction.

Tip #2: Optimize FNOL intake operations.

An FNOL submission is the first step policyholders take to kick off the claims process, so it’s an opportunity for insurers to make a good first impression by responding quickly and showing they’re ready to serve their customers. FNOL triage should be a smooth process for internal claims teams, with all pertinent data readily available. 

Although most insurers now have online submission capabilities for FNOL in addition to call centers, FNOL processes are still often slow and siloed. The ease of capturing quality data can be restricted by legacy systems’ pre-defined data models, which are difficult to adapt as business needs evolve. 

FNOL processes typically require manual intervention at multiple points over the lifetime of a claim, resulting in cycle time delays, particularly during high-intake periods, like following storms and other natural disasters. Using low-code platforms for FNOL automation can help digitize paper-heavy or phone-centric intake processes. By leveraging technology like intelligent document processing (IDP) and artificial intelligence (AI), insurers can automatically extract claims information, empowering staff to focus on more value-driven work. 

Tip #3: Improve claims settlement operations. 

Optimizing FNOL intake and triage isn’t enough on its own—insurers must also meet customer demands for a touchless claims experience from end to end. Here are just a few ways to increase straight-through processing:

  • Fine-tune the claims process with workflow, business rules, and data to better segment claims processing.
  • Integrate with advanced data sources like IoT, telematics, and insurtechs to accelerate claims processing while maintaining the highest level of accuracy. 
  • Increase efficiency by creating custom workflows for different user personas. 
  • Leverage AI and IDP to ensure complex claims are routed to more experienced claims handlers and vice versa, enabling a touchless claims process for less complex claims.

These connected claims processes play a crucial role in providing an overall connected insurance experience for customers. Streamlined claims settlement operations will make it easier for claims staff to manage their workloads and boost customer satisfaction. 

A modern claims experience for the modern policyholder. 

The emergence of insurtechs and new insurance providers is just the start of increasing competition in the market for insurance companies. The tips discussed here are just some of the ways insurers can improve their claims experience to stay competitive. We’ve compiled a more in-depth list in our eBook, 7 Ways to Modernize the Claims Experience—Using What You Already Have, which covers the importance of mobile apps, mitigating fraud, promoting continuous improvement in your organization, and more.