The science driving claims service improvements

Technology is very effective in automating straightforward claims administration processes and monitoring basic client service delivery, but we’re often too quick to digitise old processes. We’re talking about processes that were designed years ago, and tended to focus on the technical requirements for a claim, rather than the client service experience.

Today, technology offers us the opportunity to widen our horizons, and re-think how we engage with clients and everyone involved in a claim. To improve the claims handling experience and the outcomes – reducing the life of a claim and associated costs – we need processes that are better for the client and more productive for the claims management team. These two ambitions are complimentary. A claim that’s settled quickly and effectively is a better experience for everyone, and it costs less to handle.

Driven by experience

Clients don’t exactly choose to go through the insurance claims process. The event that’s caused the claim – an accident, flood, fire, injury or similar – is never a good experience. The necessary claims administration that follows can seem tiresome and a distraction from the day job. Even the language and terms used in insurance can alienate people, leaving some feeling irritated – confused by the jargon and baffled by the process.

Thankfully, an insurance claim is a rare event for most individuals, but this means that they don’t have a “mental model” of what to expect and how to engage. Service expectations are then driven by experience in daily life – Amazon, Uber, Deliveroo – where everything is intuitive and instant. These companies didn’t create the market for books, taxis or takeaways, but they’ve used technology to reinvent how we buy these services. Key to this is an understanding of the need for ease, information and value for money. They also use behaviour and data insights to continually refine the service, by understanding how users engage with it – and of course, why they don’t.

Beyond digital

To deliver new and improved services in corporate claims management, we need to adopt the same client-centric approach to service design. We need clients to engage in the process and provide the required information. Their level of understanding drives their engagement and motivation to act. If we understand how clients want to engage, we can apply new thinking and then re-imagine the claims service.

Behavioural and data science are vital tools in informing us of the changes we need to make in our processes, and where technology can improve client engagement and drive better outcomes.

Understanding the science

Behavioural science helps us to understand clients’ needs and why they act – or fail to act – in the way they do. Data science enables us to identify, validate, quantify, model and predict with greater accuracy and speed than ever before. It can also help to measure and improve performance in real-time, making us more efficient and effective.

By combining these approaches as part of the service design, we can configure technology to create improved processes and communications and deliver better outcomes.

Time and costs benefits

We’ve deployed data and behavioural analytics to look at effectiveness in specific claims. Despite meeting all agreed service levels, two key stages of one particular type of claim were drivers of client dissatisfaction. The cause was rooted in the client’s understanding of the process and their reaction to a perceived lack of progress. Applying behavioural science insights, we changed the process and redesigned our communications. We explained the process to provide the “mental model” and engaged the client in a different activity that maintained momentum in the progress of the claim.

These actions didn’t even involve any new technology, and yet we reduced complaints by 50% and customer effort by 45%. And by adding just two words to a standard outgoing email, inbound queries went down by 14% – clear evidence that better engagement and understanding can deliver time and cost benefits.

Incident support

With a greater understanding of client engagement, we’re able to use digital developments to simplify and effectively speed up specific elements of the claims process. Working together with corporate clients, we’ve introduced an easy-to-use online incident support platform. Personalised to suit each particular company’s needs, this mechanism enables people within the organisation to access corporate guidelines, phone or email designated contacts and report incidents online – quickly and intuitively. It also allows the user to capture evidence straightaway – a great help in defending claims and pursuing recoveries.

Risk data

Technology also opens up opportunities to provide risk managers with greater granularity of claims information and enhance this with wider data to deliver far richer causation analysis. By applying data science techniques to specifically design data capture and inform risk prediction, we can provide actionable insight.

Making digital work

To get the best out of technology, first we have to understand what drives our clients’ needs and behaviours. And we should use data in this process and not rely on received wisdom. The claims industry has all the skills and experience to do this and supported by the science, we can make digital work. When we do, the difference will be measurably better.

Richard Sheridan is director, head of UK Development Sectors, Sedgwick