Page 44 - Insurance Times October 2020

function. These
technologies are
upending the traditional
methods in which risk
has been perceived and
managed by insurers.
They are enabling
insurers to leverage the
streaming data deluge
to continuously monitor
the risk faced by the
subject of insurance.
Insurers who always
depended on post-loss
data and several
correlative associations
Figure 2: The Claims Organization Transition to ascertain how risk could manifest in the future, are now
able to get access to the real-time causal associations.
Insurers are embracing an API-first model while redesigning Hence, the risk management function is getting skewed to
their applications and interfaces to architect a plug-and-play the front even before the risk manifests.
operating mechanism to enable claims as a service
operating model. The success of open banking is nudging The pre-loss activity that includes proactively engaging with
insurance companies to inherit open insurance models. Open the customers to monitor, prevent, mitigate, and minimize
insurance facilitates newer customer engagement and leakage is branching out as a new function in the claims
improves operational metrics. Insurers are forging new value chain. Insurers are establishing a strategic partnership
partnerships with many other stakeholders to create various with several other stakeholders to build a risk-prevention
digital ecosystems for the safety, experience, and connected ecosystem that focuses on containing risks before
transformation of end-customers. They are consenting to they turn into a loss. The at-loss function which is oriented
share data among other ecosystem partners for providing towards providing support and assistance after the
additional services to customers. occurrence of a risk event is not a new one.

As these digital ecosystems mature, the insurance products However, this function is taking a new shape due to the
are forecasted to transform into parametric and invisible proliferation of technologies of convenience such as
contracts that facilitate event triggered claim settlements. smartphones, cloud, video streaming, analytics, artificial
Towards this destination, the claims organizations are intelligence. These technologies are empowering the
shifting from paper-based, manually intensive, and company- customers with several ways to connect with the insurers
focused traditional processes to digital, intelligent, and in turn the insurers to provide 24x7, real-time,
automated, ecosystem-driven, and customer-centric contextual, and frictionless support to customers for
processes. The emergence of 4IR technologies and the intimating the loss and getting required assistance. In sum,
growing capacity to sense, generate, transmit, store, the demand for the experience and how it is staged have
retrieve, and analyze data to predict and act is both increased exponentially.
revolutionizing the way every business process is handled
both internally and externally. The post-loss remediation function that focuses on loss
indemnificationis the oldest and has always invited the
Re-organizing Claims Functions attention of insurers from an inside-out perspective. This
function is now going through several strategic changes.
The growth of connecting technologies such as internet-of- Driven by the shortage of adjusters, insurers are exploring
things (IOT), telematics, and 4G networks, in addition to options for outsourcing granular functions. Insurers who are
geographical information systems and artificial intelligence, in short of adjusters are starting to participate in crowd
has significantly improved the risk prediction capability. This sourcing and on-demand platforms that handle claim
has become a key factor while redesigning the claims investigation. Those who are having excess capacity are
The Insurance Times, October 2020