Page 41 - Insurance Times October 2020

CHANGING TIMES

FOR INSURANCE

CLAIMS

ORGANIZATIONS

I nsurers are renowned for their risk management would not only help them win over customers but also

capabilities. Their core business proposition is to
improve the bottom-line by containing the losses. Due to
these reasons, the focus of insurers is to contain claims
identify risks, assess them, create products around the
risks and sell them to customers with a promise to
financially compensate when the covered risk event wherever possible, arrest the leakages and settle them
promptly. This article provides an overarching commentary
occurs, in exchange for a premium. Despite their regarding the changes that personal auto and home
specialization, insurers have a paradoxical relationship with insurance claims organizations are currently going through,
risk. When any risk is eradicated, insurers will have no and how emerging technologies are helping insurers to
business, and when a risk grows to uncontrollable redesign the value proposition.
proportions they will be out of business. Claims
management, which is the last core business function in the Drivers of Change and Force Multipliers
insurance value chain is important both to customers and Claims organizations are now beginning to gain more
insurers. For customers, it is the ultimate moment of truth strategic and operational focus. Consequently, they are
in the insurance business that is generally known for low- starting to command a larger share in the innovation and
touch processes and serves as the testimony to the insurer- transformation investment budget. Several important
customer relationship. To insurers handling claims efficiently drivers of change are simultaneously influencing this
paradigm shift whereby claims functions are seen to be
About the author competing with procurement, which has been a traditional

Srivathsan Karanai Marganand rallying pole for investments. While the pressure on
Suresh Aranala Krishnamurthy operations to reduce the loss ratio, claim cycle time, and
cost of settlement still remains as the traditional driver of
Both authors work as insurance domain consultants change for claims organizations, several new forces have
at Tata Consultancy Services Limited.
emerged.
The Insurance Times, October 2020