Introduction
Embracing digital transformation in the insurance sector
The insurance industry is transforming, and that is a good thing. The industry has been long overdue for modernization. Consumer expectations are shifting rapidly, translating into contactless interactions, and seamless digital experiences are now standard. It’s time to improve how customers are treated, how much automation is used, and how claims are handled.
The impact of COVID-19 has accelerated this transformation, pushing insurers to catch up quickly. The shift in the digital landscape has been a wake-up call that it’s time to ditch the fax machine. The influence of big tech and competition from tech-savvy insure-techs add to the urgency for change.
Traditional insurers are racing to keep up, not only with consumer demands but also in the face of challenges like low growth and high regulations. Cost-cutting is becoming crucial for profitability as resources are invested in increasing operational efficiency. This is done to identify and explore untapped possibilities.
Challenge
Transforming claims management for cost savings
Our client, one of the top 10 global property and casualty insurers in the US, was facing a critical challenge. They aimed to achieve substantial cost savings and enhance customer experience in the claims department, mainly focusing on the commercial sector with around 95,000 claims. With claims constituting 80% of overall costs, the goal was clear — streamline the claims workflow and identify potential savings.
Creating claims efficiency
The primary goal of this project was to identify analytical and non-analytical focal points within the claims workflow. Prioritization of these areas and developing a roadmap for implementation were crucial. The client aimed to simplify processes for claimants and agencies alike.
Solution
Leveraging digital solutions for claims efficiency
Our expertise in the industry positioned us as the perfect partner to address the needs of this client. The project focused on guiding the client in reshaping their approach through digital discipline, leveraging our extensive knowledge in data and analytics at Fractal.
The central challenge revolved around assisting the client in reducing costs, meeting evolving customer expectations, and optimizing profits in a chaotic claims process. Establishing the right priorities was crucial.
We worked on defining a list of programs, considering factors such as ease of deployment, impact on customer/agent experience, and competitive positioning. The evaluation of program feasibility involved assessing required process modifications, data availability, resource availability, deployment costs, and necessary mindset changes.
We provided detailed definitions for four prioritized programs to meet these criteria, outlining potential business benefits, people/technology/process requirements, and timelines. This approach allowed the client to uncover untapped cost-saving opportunities and make informed decisions.
What we provided:
The strategic approach to a digital claims evolution
Our strategy involves creating a multi-year roadmap considering various factors, including business benefits, organizational readiness, and the competitive landscape. This approach aims to prepare the client to address diverse challenges, ranging from saving on revenue to maintaining a competitive edge.
| Phase | Approach | Description |
Discovery phase |
Understanding the process |
The first step was to partner with the client’s claims team to assess the current process. It’s important to know where a company stands regarding data available and what’s already in place when designing a potential future. We interviewed key stakeholders to understand better the data, technology, process maturity to support these programs and the associated KPIs. |
Program development phase |
Creating the tools to analyzing the data |
After collecting all the necessary information, we developed analytical and non-analytical programs to support the client’s vision and process expectations. We identified the enablers required to implement these programs in detail. |
Analysis phase |
Program analysis and categorization |
We analyzed each program from the lens of potential business benefits, ease of deployment, and segmented programs. We split these into two categories:
|
Final phase |
Recommendation and roadmap presentation phase |
The final step is to provide the client with our recommendations. This took the form of a 36-month roadmap for their transformation. The client saw this as a high priority, so we worked on a tight timeline. All in all, we went from discovery to providing the roadmap in 6 weeks. |
Outcome
Leveraging data and analytics for insurance innovation
Transformative discoveries: cost-saving through data-driven Innovations
As the client geared up to implement our roadmap in Q2 2021, our research uncovered a significant discovery, highlighting the transformative potential of our plan. By tweaking key processes like document digitization, adjuster auto-assignment, and enhancing self-service capabilities, the client stood to save $10 million annually.
Beyond numbers: empowering companies for tomorrow
As Fractal’s roadmap unfolds for the client, they can anticipate a range of benefits extending beyond significant cost reduction. Improved customer experience will stem from analytics-augmented decision-making processes, positioning them ahead of competitors grappling with industry challenges. We remain committed to guiding them through every phase, eagerly anticipating the collaboration on bespoke solutions as the roadmap progresses.
| $10 million annually | The immediate annual savings for our client, a leading property and casualty insurer, by implementing changes in a few key processes |
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