At the 2017 America’s Claims Event a panel of senior claims executives talked about their insights on where claims are now and how they will evolve in the future. The panel was:
- Eric Brandt – Managing Director and Chief Claims Officer, Esurance (Moderator)
- Paul Strohfus – Vice President Claims Legal Services, WR Berkley Corporation
- John Shaw, Senior Vice President Claims Management, Marsh Risk & Insurance Services
- Mary Nasenbenny – Senior Vice President Claims, The Hartford
Question: What is your view on technology and the impact it will have on claims handling?
When we talked claims technology in the past the focus was on claims handling systems. These are evolving and many carriers are updating their systems. However, we are now also talking about things such as using drones to assist in completing property claim evaluations. The technology is rapidly evolving and will impact us more in the immediate future than it did over the past years.
Converting old data sets into new platforms can be a challenge. This tends to be the largest impediment to updating a claims or risk management system.
It usually takes years for a carrier to make decisions to upgrade systems but with pace of change increasing rapidly we all need to adjust to making quick and nimble decisions. It is expected that systems will become obsolete quicker due to the evolution of technology and data.
One element of systems and data often overlooked is the tremendous storage capacity required for today’s claims environment. Uploading videos and information from so many different sources takes up a lot of storage space which can be costly.
It is impossible to predict where our data needs will be in ten years compared to now as there seems to be a constant stream of new data sources. It is important that we find ways to harness all that data using analytics to turn all that information into something useful and actionable.
Question: What are your thoughts around autonomous vehicles and the impact they will have in the future?
The reality is that this is not something that will happen quickly. Once fully autonomous cars become commercially available to consumers, it will take many years for existing cars to be phased out.
Think of a world with fully autonomous vehicles. That would basically eliminate car insurance as we know it.
Question: What do you see for the future with the sharing economy from an insurance perspective?
The challenge here becomes determining at what point a person driving their personal vehicle shifts into and out of the role of being an “employee” for a company subject to workers’ compensation and liability coverage.
Question: How do you see the agency distribution model changing for personal lines as more people get their coverage online?
We have already seen this shift as a significant portion of the personal lines marketplace buys coverage online instead of working through a dedicated agent. There is still an opportunity for the agency model as some consumers still prefer to actually talk to someone on a phone or meet with them in person.
We cannot just think of this in terms of personal lines. We are also starting to see this in the commercial lines area. We can envision a time when the standardized commercial lines policies are placed direct to the consumers instead of utilizing agents or brokers.
The brokers/agents role needs to evolve into more of a consulting operation rather than just placement.
Question: How can we train the next generation of workers in the insurance industry?
People expect and demand to be trained and as an industry we do not do the best job we could with this. We feel that we know what the training program should include from a technical standpoint, but with changing technology this will evolve. We need to quit worrying about people leaving after we incur the expense of training them and focus on training as an essential element of the company.
Many organizations are relying on the college/university system to do their training with degrees in risk management and concentrations in insurance. People are obtaining professional designations in college to facilitate their transition into the industry.
Could we work with colleges to develop two year programs around insurance instead of a four year program? Is there still an opportunity for us to use on the job training?
Question: How do we recruit new workers into the insurance industry?
Stress the good things we do in the the insurance industry. We help people. We restore their lives, fix their homes and vehicles, and get them back to work. We need to do a better job promoting the good things we do.
Stressing how long your company has been in business is not the right approach. College students do not care that your company has been around for 200 years.
We need to adapt to the fact that the adjuster today will be different than in the future. More adjusters will likely be home-based. Many different industries allow work from home so the insurance industry needs to do this to keep up and attract workers. I will be not be surprised if the majority of adjusters are home based in 10 years.
Question: How do traditional insurance companies compete with upstart disruptors?
If consumers only care about price how does that change the approach to the service element? You devalue service if price is all that matters.
Established companies are burdened by our systems and our processes. We need to continue to evolve to keep up with how consumers want to be treated.
Ultimately satisfaction from consumers comes from the claims process. Paying a cheap price doesn’t matter if you have a claim and have problems getting it paid. The focus on price will fall apart if those companies cannot deliver on the claims handling side.