Insurance Business America Executive Insights Series: Claims Innovation 2021

EXECUTIVE INSIGHTS SERIES

CLAIMS INNOVATION As the claims space enters a new tech-enabled era, IBA takes a closer look at the latest developments on the horizon

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CLAIMS INNOVATION INSIGHTS 2021 Insurance Business America takes a closer look at the latest tech developments in the claims space, with expert insight from Gallagher Bassett, Sompo International and Baker Tilly US

CLAIMS CAN make or break an insurer’s reputation. If claim management, service or outcomes consistently fall short of customer expectations, insurers will face an uphill battle in client retention and acquisition. The challenge is that customer expectations are always changing, which means that a strong claims service today could be deemed inadequate tomorrow.

That’s why claims innovation is a top strategic priority for insurance organizations around the world.

There are opportunities for insurers to transform processes throughout the entire life cycle of an insurance claim. Customers expect to be able to report a claim 24 hours a day, seven days a week, and they want some sort of immediate response from their insurer, even if it’s just an automated message acknowledging receipt of the claim to confirm that the process is underway. They also want multiple channels to report their claim: over the phone, online, via a mobile app or (in nonpandemic times) in person to their agent or broker. Throughout the life cycle of a claim, they’re looking for constant communication, convenience, speed and, perhaps most importantly, peace of mind that they are being taken care of.

Insurers have access to digital tools that can help them to meet these expectations.

Beyond using technology to enhance client communication, many insurers have made

significant progress in their use of artificial intelligence and machine learning to triage claims and route them through the appropriate channel, whether that’s a complex claims team or a high-volume, low-severity team. That’s helping insurers expedite the claims adjudication process and meet policyholders’ stringent demands around response times.

Artificial intelligence, machine learning and data analytics also play vital support roles in decision-making in the claim adjudication process, informing everything from the selection of third-party providers to intervention and settlement strategies.

Insurers can also use the data collected to enhance their risk management and loss control offerings – two broader elements of claim service that simply can’t be ignored.

The use of such technology is now table stakes for most insurers. Those who do not adopt these innovative strategies will quickly fall behind.

Claims innovation has arguably never been more important than in the context of COVID-19. Since the onset of the pandemic, insurance carriers around the world have adjusted to a remote work environment.

They’ve had to adapt their core IT functionality and business operations so their teams can continue to provide high levels of service to policyholders and business partners. In the claims space, the big question revolved around whether a remote

workforce could handle the entire process of claim adjudication, management and payment at the level of service expected by policyholders today. The answer to that question has been a resounding yes – with the help of some facilitating tools and an innovative mindset.

Insurers have invested in virtual loss adjusting technology, enabling claimants to submit photos and videos of damages directly via their smartphones. More and more insurers are engaging with drone technology to facilitate site inspections and deal with acute loss accumulation after catastrophic weather events. And in the healthcare space, there’s been a huge uptick in the use of telemedicine and video consultations to help injured workers.

While insurers worldwide are doing some amazing things in claims innovation, it’s important to remember the client at the center of the claim. Technology can only go so far in terms of enhancing the customer experience; when it comes to claims, the personal touch is key. At a time when policyholders’ lives or businesses are turned upside down, insurers must strike the right balance between innovation and the human touch to achieve the best results.

Bethan Moorcraft Senior editor Insurance Business America

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MEET THE EXPERTS Mike Hessling CEO, North America Gallagher Bassett Since 2012, Mike Hessling has been a key member of the global leadership team at Gallagher Bassett (GB). Upon joining GB as its first chief client officer, Hessling quickly established innovative practices around client service management, built industry-leading analytic capabilities and enhanced the organization’s business development approach. Under his leadership, GB’s North America business has enjoyed extraordinary client satisfaction, retention and growth. In 2020, Hessling was promoted to CEO for North America, and he now leads more than 4,000 team members in GB’s North America claims operation.

What are the benefits of automation in the claims management process?

Lynn Neville: Our goal is to be responsive to our clients in a fast and efficient manner.

Technology helps us achieve that from both an internal and an external perspective; better communication lowers the claim cycle time and helps us to manage the claims process more effectively.

Automation has also changed the game for legal proceedings, enabling us to conduct virtual mediations and alternative dispute resolutions remotely. Managing the claims process this way has obvious advantages – not only are attorney fees lower due to the reduced time and travel expenses, but proceedings also go a lot

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Simon Oddy Partner Baker Tilly US

Lynn S. Neville EVP, global head of insurance claims Sompo International

With more than 20 years of forensic accounting experience, Simon Oddy has quantified both large, complex losses and smaller claims in insurance, fraud, liability, business interruption and cyber claims cases across six continents for consequential losses throughout his career. In addition to working within the insurance industry, Oddy has handled government work on behalf of the US Department of Justice, performing transaction analysis in cases of fraud. His areas of expertise include cybersecurity, insurance qualification, food and beverage, and litigation services.

Lynn Neville has been EVP and global head of insurance claims for Sompo International since 2017, having previously served as head of the specialty claims group. Prior to joining Sompo International in 2016, Neville held senior claims leadership and board-level positions with various other leading insurance carriers.

With a JD from Widener University’s Delaware Law School, Neville is a member of the District of Columbia, Pennsylvania and New Jersey bars.

She also serves on the board of directors for FCG and was part of the advisory board for Pitney Bowes’ insurance division from 2009 to 2012.

faster virtually. We end up bringing legal costs down and speeding up the resolution process, which is clearly a win-win.

This all has a spillover effect from a claims management perspective, because it enables us to provide a faster, less expensive process for our customers. Automation can also help our clients manage their claims more effectively, from a more immediate setup time to the ability to identify their claims specialist with the touch of a button.

As automation technology has improved, so has the quality of the data it provides, and that data has the power to inform the claims process. We’re able to take the data we gather through automation and use it to create new opportunities for predictive analytics, creating more

efficiencies and delivering better service to brokers and insureds.

Mike Hessling: There is a tremendous amount of energy and investment related to automation in the claim industry; however, it is important to first ask: Which claims are we talking about?

Many tend to think of automation in relation to high-frequency, low-severity claims. Here, the benefits of automation tend to be improved efficiency and speed, which primarily accrue to the claim provider. However, in the commercial P&C market, these claims represent a lesser percentage of loss dollars than longer-tail claims, so the benefit to clients’ total cost of risk is moderate.

Where we see significant benefit to clients is in automation related to low-

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“We’re able to take the data we gather through automation and use it to create new opportunities for predictive analytics, creating more efficiencies and delivering better service to brokers and insureds” Lynn Neville, Sompo International to moderate-frequency, higher-severity claims. This is where the majority of loss dollars are concentrated, and even modest improvements can drive material outcomes for our clients.

For example, by automating more routine or administrative aspects of the claim process, our claim professionals

have more time to focus on what ultimately brings claims to resolution – building trust with claimants, facilitation of resolution/return-to-work with clients and engagement with providers such as physicians and defense counsel.

Automation is also essential to harness the collective expertise of our organi-

zation through decision support tools.

Whether evaluating reserves, selecting medical providers or defense counsel, or considering intervention and settlement strategies, our claim professionals are able to draw on the insights and experience of Gallagher Bassett (GB) across millions of claims to make the best possible decision on each and every claim.

Finally, automation supports data integrity and quality, which is critical in our industry, where analytics are increasingly important to managing risk. By providing the highest-quality information, we help support targeted loss control efforts and more effective underwriting of risk and claim portfolio management for our clients.

Simon Oddy: Expediting the claims management process through automation and digital transformation can

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“Policyholders expect fast transactions and on-demand, real-time updates in all aspects of their lives, including insurance claim filing and processing”

benefit both insurers and policyholders immensely. First and foremost, automation may increase the speed to closure of many claims, which is a known pain point for insurers and policyholders alike. Those making the claim want to see it resolved quickly and fairly, and those handling a claim want to see it handled smoothly, diligently and efficiently so their company’s operations run effectively.

To meet this need for speed and efficient due diligence, Baker Tilly’s new Quantum, a business interruption claims processing platform, leverages data and human insight to deliver loss calculations in as little as one day. Platforms like Quantum also offer customer-facing, on-demand portals to automate the intake, evaluation and client reporting associated with damage analysis. Policyholders can upload documents and check their claim status 24/7, while claims professionals are able to easily manage multiple claims to decrease bottlenecks and boost productivity.

Many of the latest claims management technologies also include built-in proac-

tive communication features. For example, a case alert system with automated email communications provides policyholders with instant updates to keep cases moving and assist claims professionals with timely follow-up. At the end of the day, this all equates to more fair settlements and a smooth, transparent experience for both insurers and policyholders.

How has the COVID-19 pandemic accelerated innovation in the claims space?

Simon Oddy: Before the pandemic, the traditional business interruption claims process had been slow to change. It followed a similar tried-and-tested pattern for many years. We eventually started to see increasing levels of dissatisfaction in the process, as well as policyholder frustration due to lack of transparency and speed to closure. This was especially evident for small to medium-sized commercial claims, where policyholders were relying on insurance to help them through the financial

Simon Oddy, Baker Tilly US

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challenges created by a loss event.

What we now call ‘the Amazon effect’ – where on-demand services are commonplace and policyholders expect fast transactions and on-demand, real-time updates in all aspects of their lives – has extended to financial transactions, including insurance claim filing and processing.

High claim submissions due to the pandemic and an unprecedented year of natural catastrophes mean that insurers must prioritize transformation to improve the efficiency with which claims

“We’ve built real muscle that will allow us to accelerate the pace of change, benefiting clients and claimants well beyond the immediate needs of the pandemic” Mike Hessling, Gallagher Bassett THE FOUR CORE ELEMENTS OF A SUCCESSFUL ARTIFICIAL INTELLIGENCE STRATEGY

Data capabilities

Models and tools

Organization and talent

Change management

Source: “Insurance 2030 – The Impact of AI on the Future of Insurance,” McKinsey & Co.

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are managed. As a result, we’ve seen an increased interest in the adoption of new technologies, including customerfacing portals and data-driven AI calculations that can help reduce bottlenecks, improve overall experience and offer a competitive advantage.

While these calls for transformation are clear, it’s important to remember that every organization is different and may not have the same appetite for modernization. The level of innovation and adoption depends on a variety of factors, such as organizational culture, customer portfolio and policyholder expectations.

Lynn Neville: The pandemic created a unique environment for accelerated accessibility and innovation in the claims space, particularly when it comes to communications. The use of technology was the solution to addressing our most pressing lockdown questions: How do we stay in touch?

How do we manage connection to the entire value chain, including underwriters, brokers and clients?

Our claims team at Sompo International recognized three key needs: to be transparent, to deliver on effective and efficient claim processes, and to partner with customers to help them manage and lower their losses. These remained our priorities during the pandemic, and in many cases, innovation was key to our continued success in meeting these goals.

We had to get really smart with our strategies, and that meant considering everything from texting and Webex to virtual mediations and dispute resolution.

While some of these tools were in use prior to COVID-19, the pandemic elevated their importance and accelerated the need to fully integrate them into daily operations.

Through this transition, we identified digital tools that are advantageous and added value, both to us and to our external audiences, and now that we’ve seen how effective this kind of innovative communication can be, many of these tools and

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processes will continue to be part of our best practices moving forward.

Mike Hessling: The pandemic has acted as a catalyst for innovation in the claims space in several ways. First is the adoption of technology-driven approaches.

Bringing a claim to resolution often relies on timely access to medical care and, for more complex or contentious claims, the court system. With the pandemic, our industry has accelerated the adoption of solutions like telemedicine and virtual dispute resolution.

As an industry, we’ve also learned to more effectively engage one another in a virtual environment. For example, our growing collective comfort with videoconferencing has enabled more frequent and personal touchpoints relative to our pre-pandemic environment, where travel consumed a significant amount of time for many of our clients, carriers and broker partners.

In addition, we are constantly challenging ourselves to identify new and innovative ways to more rapidly drive claims to resolution. With underlying changes to the medical and court systems, the introduction of COVID-related claims, and rapid changes in client exposures, the claim industry needed to more effectively anticipate fluctuations in claim volumes and opportunities or obstacles for closure.

Within GB, we have built extensive capabilities to help manage this changing environment, which will serve us well beyond the pandemic.

Finally, though we tend to think of innovation as technology-related, the pandemic also drove process innovation in response to a rapidly changing regulatory environment. For example, presumption laws and increases in business interruption claims have required claim providers to be nimble in defining, staffing and operationalizing new processes on a frequent basis to respond to the needs of clients and claimants.

Beyond these specific innovations, perhaps most exciting is the improved capability to innovate both as an organization and an industry. We’ve built real muscle that will allow us to accelerate the pace of change, benefiting clients and claimants well beyond the immediate needs of the pandemic.

How are virtual adjusting solutions improving the customer experience?

Mike Hessling: Virtual solutions are critical to improving the experience for both clients and claimants. For clients, we have found tremendous interest and adoption of our industry-leading risk management information system, LUMINOS. Through this solution, clients can easily review claim-specific information and also review program performance through robust dashboards and reporting capabilities. We have also created many exciting and interactive analytic tools, such as our Claim Strategy Dashboard, which helps clients more effectively focus their time and attention on select claims within their portfolio.

I’m proud that this solution continues to earn the industry’s highest Net Promoter Score based on client satisfaction.

The claimant experience is also important, and for many, the claim process can be intimidating or confusing.

An example of where we’ve dramatically improved that experience is through GBGO, our mobile application for workers’ compensation claimants. This awardwinning solution allows claimants to understand the status of their claim and related payments, ask questions of their GB resolution manager, and locate highperforming doctors in their area. We’ve seen tremendous adoption of this solution and have received positive feedback from claimants who have utilized it.

Simon Oddy: There’s a wide variety of virtual adjusting solutions in use in the

“[The pandemic] highlighted the stress of the claim process to our clients in a very tangible new way – and we’ve used that understanding to make the claim process better for clients” Lynn Neville, Sompo International

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“It’s not possible to deliver exceptional outcomes unless you understand the intricacies of the claims being managed and the nuances of a client’s business and industry” Mike Hessling, Gallagher Bassett

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market today, from basic photo uploads to drone use to more advanced claims management technologies. These virtual adjusting solutions can enhance the customer experience by providing varying levels of flexibility and an additional level of transparency to improve speed to closure and get businesses back to business.

Although insurers and forensic accountants have long had the experience of being ‘boots on the ground’ following a catastrophe or major loss incident, newer technology is allowing evidence-gathering without physically being on-site at every loss. Smartphones allow policyholders to quickly take photos and upload their own evidence for the claim, while drones can provide aerial footage of damage, keeping adjusters safely on the ground.

More advanced solutions also allow for more efficient data collection, which is needed for the loss adjusting process, so enhancing this collection process will enhance claims adjustment. While there are certainly situations that still require in-person review, these tools and technologies have their place.

Lynn Neville: In many ways, the pandemic created a new culture of empathy. We were all thrown into an incredibly difficult situation and were grappling with understanding and navigating this new business environment at the same time. This experience highlighted the stress of the claim process to our clients in a very tangible new way – and we’ve used that understanding to make the claim process better for clients.

Virtual adjusting solutions and the use of virtual meetings are great examples of how we’ve been able to put that empathy into action to enhance the customer service experience.

A significant value-add of virtual adjusting solutions is that they create transparency, speed and creativity around the claims resolution process. Tools like drones can be used to facilitate outside site inspections. Internal inspection

capabilities can be linked to clients’ smartphones, and virtual videos can be uploaded to insurers for ease of creating inspection reports and analytical tools, thus reducing costs with creative solutions and also providing increased transparency into the claim process.

All of this simultaneously brings more control and transparency for clients. They are part of the process with a level of insight that wasn’t necessarily there before, ensuring that they are easily integrated into the process. It also makes it easier for brokers to maintain connection and provide support to their insureds throughout the claims management process.

What are brokers looking for in a best-in-class claims service?

Lynn Neville: Above all, brokers want to see unbroken promises. They want to see that we are delivering claims service in a way that clients want to consume it and that their expectations are in line with the solutions we create, with transparency, speed and client involvement integral to the process.

If done the right way, technology can help. Automated tools make it easier to involve brokers throughout the claims process and to ensure that everyone is on the same page.

Ultimately, we all want customers to be happy, to ensure that they get what they believed they purchased and to have it delivered in a timely and consumable manner. Analytics and communication tools help us to deliver the level of service, speed and involvement necessary in an ever-changing environment.

Mike Hessling: We view brokers as essential partners and as an extension of our clients. They are integral to delivering superior outcomes for our clients and, as sophisticated insurance professionals, have high expectations of claim service providers.

First, they expect depth and exper-

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tise within respective lines of coverage and industries. It’s not possible to deliver exceptional outcomes unless you understand the intricacies of the claims being managed and the nuances of a client’s business and industry.

Second, they expect consistently high levels of quality. Claims fulfill the promise of insurance, and brokers rightfully expect that promise to be fulfilled faithfully on each and every claim.

Brokers also expect great communication and collaboration. When we work as a team – client, broker, carrier and claim provider – we get the best thinking and results for the programs we serve.

Finally, brokers expect insights and innovation. We are mutually tasked with improving the cost of risk for our clients, so it’s critical that we constantly challenge ourselves to identify opportunities, create better solutions and improve the customer experience.

What about insurers – what do they expect from a bestin-class claims service?

Simon Oddy: Every party involved in the claims process – from the policyholder to the adjuster, the broker to the expert consultant – is looking for best-in-class claims service. This past year has taught us that there is room for change, innovation and modernization in how we handle claims and that technology can play a vital role in increasing efficiency for insurers.

There is no shortage of claims management systems on the market today. So when developing Quantum, we spoke to many customers and noted that level of experience, personal service and flexibility were key areas of insurer interest. That said, we recommend keeping a few things in mind when evaluating the right system for your needs.

The first is depth of forensic accounting experience. Even more important than

the technology are the professionals who develop and service it. How much experience does the provider you are about to enter a relationship with have? Look for professionals with deep, vast business interruption claims experience, ideally across multiple sectors and countries. This experience will have been deployed in the technology solution.

Second, look for professional customer service. If the technology doesn’t work or you have a complex claim, can you quickly get in touch with a human being?

It’s important to understand the level of human interaction so insurers and policyholders are supported. The best systems offer hands-on guidance when needed so no user is left spinning in circles.

Finally, consider flexibility. How many claims will you be uploading? And with what rate and frequency – large, steady or periodic surges in claims volume? If you will be handling a high volume of claims, look for a system with unlimited scalability to help effectively handle large intakes without sacrificing customer service. And make sure to seek out a provider who can offer customized service levels so you only pay for the features you need.

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SEGMENTING CLAIMS BY COMPLEXITY AND SERVICE Deloitte’s recent report on the future of insurance claims highlighted how insurers can segment claims by both complexity and service level to deliver “the right service to the right customer at the right cost and time.”

COMPLEXITY SEGMENTATION

Specialist/ complex Handled by expert resources

SERVICE SEGMENTATION

Express Automated or low-touch

Standard

Bespoke

Core Handled by an experienced team

Perception of bespoke

Source: The Future of Claims, Deloitte

How much of a role does data play in driving innovative claims solutions?

Mike Hessling: Data is essential to driving impactful claim solutions because it helps to identify opportunities, design solutions, execute and integrate those solutions at the highest levels, and confirm the impact on claim outcomes.

A good example is our Clinical Guidance solution, which helps identify opportunities for clinical intervention on workers’ compensation claims. We identified through in-depth analysis that early clinical intervention on claims resulted in superior outcomes – lower duration and cost. Through extensive analytics, we built predictive tools that identify claims with risk indicators, including treatment quality deviations, which indicate the need

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for clinical intervention.

Once live, we then used data to understand where model recommendations weren’t consistently accepted and why.

We held discussions with our claim professionals and performed root cause analysis to improve both the model and training of team members, making this solution an integral part of our claim process. Importantly, this is often an area in solution development that is under­ appreciated or overlooked.

Finally, we used data to confirm outcomes of the solution by comparing results on like-for-like claims – severity mix adjusted – which confirmed the impact anticipated early in solution development.

Lynn Neville: Data allows us to identify the real issues. It plays a material role in resolving claims by making it easier to

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get information about details like venue, counsel or case law on an individual claim level – details that can be used to effectively manage a claim to resolution. Data analytics also help us to take an innovative approach to understanding and addressing the root causes of issues within our portfolio. We can see trends and use that data to identify and hopefully address the root causes. When you can figure out the ‘why’ behind claims issues, you can start to create solutions, thereby reducing client costs.

Additionally, data analytics help us to understand and direct claims into the right hands. If data tells us a claim is likely to be severe, it can go to the claim specialists that have the skill sets to manage a higher level of complexity to resolution.

Comparatively, low-touch situations can go to a fast-track model, reducing costs and facilitating a more effective claims handling process.

Our ultimate priority is to help our clients manage their risks, sometimes even before they happen. Claims data can be used by our risk management team to deliver solutions that mitigate future losses. At Sompo International, we have a truly integrated, collaborative approach that uses data to inform our clients to help create a safer environment, reduce loss costs and mitigate their risks.

Simon Oddy: Data is central to driving nearly all claims innovation. It’s important that any automation associated with the claims processing platform be data-driven and accurate. Data-driven AI calculations can provide adjusters with a benchmark loss to build from in order to expedite the claims process. A platform that utilizes a data-driven algorithm based on historical data can result in an expedited, unbiased and accurate calculation.

In the case of Quantum, Baker Tilly harnessed the power of more than 40 years of historical loss data and experience from across industries and around the world. As

“We can see trends and use data to identify and hopefully address the root causes.

When you can figure out the ‘why’ behind claims issues, you can start to create solutions” Lynn Neville, Sompo International we move forward, this data pool will only grow. It’s important that the platform can harness the past and future data available to improve the process.

As technology and innovation take center stage, how important is it for claims service providers to maintain the personal touch?

Simon Oddy: While digital transformation can certainly ease the burden by making claims faster through data-driven analysis, we need to keep personal connection at the forefront. Machines can only

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get you so far, and human connection is just as critical to the policyholder’s experience. Filing a business interruption claim can be a stressful and draining process, and having an expert and adjuster there to guide the policyholder through the process when needed can make all the difference.

Here are a few best practices to keep in mind. First, most situations are bigger than any fact, figure or piece of litigation – it’s about people first and foremost.

Each person shows up with a unique set of circumstances and will react in their own way. Regardless of their reaction, claims professionals and expert consultants need to maintain a calm, understanding and professional demeanor to be a voice of reason. Finally, don’t forget to put yourself in their shoes to understand how this situation is impacting them both personally and professionally.

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During situations with complex calculations of multi-loss locations or a suspicion of claimant error or fraud, hands-on guidance is essential to arrive at a fair settlement. In these scenarios, we recommend calling on the outside guidance of financial professionals like forensic accountants.

Forensic accountants are skilled in quickly understanding the financial situation and will provide an independent view and measurement of the insured’s loss.

Mike Hessling: At our core, we believe claims are a deeply personal experience that requires sincere, caring and professional interactions. We aren’t ‘administering claims’; we are restoring lives, protecting brands and resolving disputes on behalf of our clients. Having this as part of our DNA informs everything we do, from who we hire to how we train to the investments we make in technology and innovation.

Accordingly, we view technology and innovation as ways to enhance the claim experience and personal touch, not to disintermediate it. If we remove an administrative task from a claim professional, that’s more time for them to speak with an injured worker. If an injured worker can check on the status of their indemnity payment through a mobile app, that’s more time for our claim professional to engage with the employer about the worker’s return to work. If we can provide analytic tools to help clients identify opportunities in their portfolio, we have more time for robust claim strategy discussions that benefit claimants and the client’s total cost of risk.

Lynn Neville: Striking the right balance between maximizing innovation and maintaining a personal touch starts with knowing your client and the markets in which you transact business. First and foremost, you must understand what your clients need and how they want it delivered. For example, when it comes to low-cost claims like replacing auto glass, the client may just want fast resolution,

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so texting can be the best way to provide a personal touch. On the other hand, when a client is facing a devastating catastrophic injury or a plant shutdown, they may need someone on-site talking through complex issues. What the ideal personal touch may entail can change from client to client and from one type of claim to another, so the balance lies first in knowing your client.

The more complex a claim, the more touchpoints the claims team must deliver.

Involving brokers in the process provides another touchpoint for the client when appropriate. Any time we can include the broker to ensure an understanding

we might never have recognized without the use of AI to analyze huge amounts of claims data.

Technology also helps to make the relationship between data points more meaningful, and the solutions that we put in place based on the information we derive reduces cost both for the client and for the industry as a whole, essentially benefiting all parties. The more effectively and efficiently we can identify fraud cases, the more we can avoid making unnecessary claims payments. In return, the customer’s loss costs are lowered, premiums will be more in line with legitimate loss expe-

“Machines can only get you so far, and human connection is just as critical to the policyholder’s experience” Simon Oddy, Baker Tilly US of what the client needs, it creates a level of transparency and a communication bridge that helps us to facilitate the claims process, while also assisting the broker in maintaining that all-important client relationship.

How is technology helping to reduce insurance fraud, and how does this help insurance organizations overall?

Lynn Neville: Automation of reporting can speed the identification of red flags to significantly reduce insurance fraud. There are technology solutions that can come into a claims platform and pull out data points to identify issues faster, and these programs can also identify relationships that a human might never think to relate.

For example, predictive analytics show a connection between proximity of a doctor’s location and fraud in workers’ compensation claims. This relationship is something

KEY TECHNOLOGY IMPERATIVES DRIVEN

BY THE PANDEMIC Customer service chatbots Augmented reality remote adjusting Technology-enabled estimation/ appraisal Legal cost optimization Proactive CAT management Risk and outbreak science modeling Digital payments Source: The Future of Claims, Deloitte

rience, and hopefully we will create a deterrent for future fraud.

Simon Oddy: Technology can help insurers reduce insurance fraud through predictive analytics and data-driven calculations. For example, Baker Tilly’s Quantum utilizes an algorithm that is based on 40 years of historical loss data and experience from across industries and around the world. Algorithms like this have the capability to flag a claim that may seem out of the ordinary based on factors such as geographic location and value amount. Once flagged, an adjuster can analyze the claim and determine if it is suspicious or fraudulent.

Additionally, one of the best ways to reduce insurance fraud is through the analysis of policyholder documents such as revenue, sales materials or tax records.

While a claims platform may request the entry of data upon which calculations are performed, those data points should be backed up by source documents uploaded through the platform or system.

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Insurers can bring in a forensic accountant as a third-party expert to discover trends and calculate a fair, impartial loss.

During their analysis, forensic accountants may also use technology to detect possible embezzlement or fraudulent transactions.

Mike Hessling: Technology provides tremendous help in the potential identification and investigation of fraud across claims. Beyond traditional approaches, such as identifying claims that may be related to previous injuries, the power of analytics allows us to knit together thousands of variables to identify patterns that indicate heightened risk of fraud.

Likewise, there are opportunities to identify potential abuses by medical providers, such as overcharging or miscoding for medical procedures, both of which drive up the cost of care. We also measure treatment against evidence-based medicine guidelines, as deviations can indicate risk of poor medical care or, in extreme circumstances, collusion between

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medical providers and their patients.

Technology also assists in the investigation of potential fraud, such as video capture via closed-circuit TV or drivecams and the use of social media investigations for fraudulent injury claims.

Collectively, these enhancements allow us to deter, identify, investigate and pursue fraud, ensuring those entitled to coverage and compensation have a vibrant insurance industry to count on.

In today’s tech-driven world, what key trends have been emerging in the claims space?

Lynn Neville: One of our priorities is to use technology solutions to enhance connectivity between Sompo International and its clients. The use of AI and machine learning to facilitate this connection is an important trend in the claims space. It helps to quickly and effectively connect our clients to our claim specialists with an ease and transparency not known before to the industry. In addition, the use of AI can help to streamline processes, increase timeliness and quality, and reduce costs.

Portal integration is also a trend that has a direct impact on how we transact business – and how we enable customers to transact business – through self-service tools. Claims portals give all involved parties, from claims specialists to brokers to insureds, access to valuable real-time data about their claims and where we stand in the process. This type of technology enables more interfacing between the customer and the insurance company, helping to facilitate everything from communication to analytics to the claims adjustment process.

The use of claims data and predictive analytics is also a trend. Effective use of analytics can help identify valuable just-in-time client solutions that are equally important when it comes to risk management capabilities – think supply

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chain management. The data we collect and analyze can help us create safer and healthier environments for our clients’ employees and their customers. As an example, weather data analytics can be used to develop early warning systems that help clients in CAT-prone areas to manage their business contingency plans in the event that a severe weather event is coming their way.

As we continue to more widely use technology, more and more effective solutions will develop that will help us partner with our internal and external clients to manage the claim process, reduce costs and mitigate risk going forward.

Mike Hessling: While there is significant innovation within the claims space, I think the most important trends are transparency, insight generation and deployment of expertise.

Regarding transparency, technology enables us to start from a common place of understanding. Historically, this has meant information like claim financials, claim notes and key information like liability assessment or diagnosis on workers’ compensation claims. But today, transparency means so much more. As an example, our quality platform, ROSCO (Real-time Opportunities for Superior Claim Outcomes), gives our claim professionals, client service managers and clients visibility into the underlying quality of claim handling across their program. By providing this level of transparency, our clients have confidence that the basics are being done exceedingly well, thus allowing us to focus time and energy on claim strategy.

Insight generation is critical for both claim handlers and clients. As mentioned earlier, we continue to invest heavily in decision support tools to help our claim professionals make the right call on those key decisions that most impact the trajectory of a claim outcome. Similarly, we have developed advanced benchmarking capabilities such as our Severity Mix

Adjusted Rating Technique (SMART), which helps clients evaluate changing risk and exposure across their claims portfolios. Demand for insight generation is accelerating, and I’m excited about our leadership position in this space.

Finally, insights are only valuable if you take action, particularly by deploying the right expertise at the right time. A great example of this is the deployment of our Major Case Unit (MCU) within our transportation practice, where we have seasoned claim experts managing the most complex risks within this portfolio. While claims within this unit are about 5% of total auto bodily injury cases, they represent over 50% of costs – thus, our ability to compress duration, reduce

“The power of analytics allows us to knit together thousands of variables to identify patterns that indicate heightened risk of fraud” Mike Hessling, Gallagher Bassett expense and reach resolution by deploying the right experts at the right time is having a material impact on our clients’ cost of risk in this high-exposure line of coverage.

Together, these changes reflect a broader macro trend across the industry: a focus on outcomes. Discerning clients, brokers and carriers recognize that claim service providers are key partners in reducing their total cost of risk. I’m excited that when these stakeholders engage with Gallagher Bassett, they experience the innovation, expertise, quality and service of our team and know that, together, our futures are very bright.

Simon Oddy: Key trends in the insurance space are centering around technology implementation, transparency – as we’ve discussed – and parametric triggers. Technology is a key driver in para-

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metric triggers for insurance, whereby key variables are quickly measured using technology to confirm the severity of a loss event and, in turn, enable an accelerated claims process and settlement. For example, a series of measured variables at or near an insured location could lead to an automated, index-based calculation triggered by reported flood water depth or the scale of an earthquake. Systems which rely on strict temperature controls can be fitted with technology to report deviations from the appropriate temperatures. This data can be quickly reviewed to confirm a loss event and lead to an automated

“The use of AI and machine learning helps to connect our clients to our claim specialists with an ease and transparency not known before to the industry” Lynn Neville, Sompo International

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insurance payment.

Additionally, customer experience as a competitive differentiation is a driver for digital innovation that can directly impact policyholder retention. After all, policyholders expect every aspect of their lives, whether it be grocery pickup or insurance claims, to be quick and easy interactions.

That said, if technology can help increase retention, insurers should consider deploying new claims technology, recognizing that every organization is different in terms of readiness for change.

On one end of the spectrum are simple upgrades such as on-demand vendors available to answer claimant questions.

More significant transformation may lead to digital automation to handle elements of the insurance process, like using AI to onboard claimants’ documents and perform calculations or deploying virtual assistants to respond to frequently asked questions. Technology use in the modernization of the claims process will only continue to change and evolve.

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PROMISE TRUST PROTECT AT THE CENTER OF EVERYTHING WE DO.

WHAT VALUES DRIVE YOUR SUCCESS? We believe that core values drive success – that when ethics and integrity are the foundation, we can weather any storm.

At Sompo International, our people are your people. We promise to deliver on high standards and to be transparent every step of the way. You can trust that when you approach Sompo International that your world becomes our world. We will face challenges alongside you and promise to protect what you stand for. The Sompo International ring is more than a logo – it’s a symbol of our promise. That is why promise, trust and protect are at the center of everything we do.

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