Society’s growing reliance on digital technologies is not only reshaping customer expectations but also redefining boundaries across industries. McKinsey white … Subscribed to {PRACTICE_NAME} email alerts. AI algorithms can help segment claims cases by complexity using factual and predicted claims characteristics. Insurers have the opportunity to shift simple, routine transactions from claims handlers to intermediaries, such as agents and brokers, or customers themselves. Satisfaction surveys in claims consistently show that customers desire a fast and intuitive process as well as transparency on where they are in the process and what happens next. The development of a truly innovative customer journey can be achieved by integrating with three other areas—AI and digital technologies, the digital integration of the claims ecosystem, and a new digital operating model (Exhibit 2). example, the claims database) to harnessing image Bernhard Kotanko, McKinsey Insurance company executives talk about the benefits and needs of protection and life insurance but when it comes to making money, they have always relied on the hard sell. collaboration with select social media and trusted analytics partners For example, Lemonade has worked to redefine the customer experience with an innovative, chatbot-based FNOL system that creates automated claims payouts within seconds.3 3.Paul Sawers, “Lemonade raises $120 million from SoftBank, others to take its chatbot-based insurance service global,” VentureBeat, December 19, 2017, venturebeat.com. Insurance beyond digital: The rise of ecosystems and platforms. A true digital redesign of claims integrates a relentless focus on the customer with a value-driven approach. Rather than seeking to transform commercial lines completely, most insurtech companies focus on enabling or extending the insurance value chain. Carriers have an opportunity to differentiate themselves by providing an excellent customer experience across multiple points of contact and “moments of truth.” The outlook is positive for carriers that move quickly and decisively in a “winner take all” world. Purely digital industry attackers have raised the bar for performance by showcasing simple and intuitive customer interfaces, making it imperative for incumbent carriers to radically redesign their claims customer journeys. To succeed in ecosystems, insurers will have to take a hard look at their traditional roles and business models and to evaluate opportunities to partner with players in other industries. Early customer Digital transformation may finally, finally, be creating a meaningful change, says Bernhard Kotanko, senior partner in Hong Kong at McKinsey … 2 Like. interactions with customers as part of a journey By examining each of these areas, P&C claim functions can start to rethink the claims customer journey and back-office processes. demonstrate how the enabling elements support Digital Partners (DP), a global venture established by Munich Re to win the confidence of and subsequently partner with insurance disruptors, is nurturing an ecosystem that supports the … While AI should ideally support the entire customer journey, it can generate significant value by automating claims management. A recruiter reached out to me and want to if it’s worth it cause D’s practice is lit, SC at D btw. As with any self-service tool, insurers must precisely define the necessary information, for example, where the customer can find his or her policy number. Digital upends old models. McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. Every fall, thousands of insurance executives, tech entrepreneurs, and investors gather at InsureTech Connect to understand better the digital transformation of the insurance industry. Subscribed to {PRACTICE_NAME} email alerts. People create and sustain change. Digitizing the claims process involves redesigning and speed the claims processing for the customer. 5 Comments Share. Our flagship business publication has been defining and informing the senior-management agenda since 1964. Possible applications for applied AI range from journeys can be triggered, for example, by the Learn about digital innovation in insurance tab. Top and middle management in claims should become champions for the new value proposition; otherwise, they risk finding themselves halfway through the digital transformation without the necessary company-wide buy-in to stay the course. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more, Learn what it means for you, and meet the people who create it, Inspire, empower, and sustain action that leads to the economic development of Black communities across the globe. In addition, digital tools can support and assist the decisions of claims handlers, leading to better outcomes. claims segmentation) or natural language processing A successful digital transformation radically reinvents the claims customer journey with the help of AI, digital technologies, and the claims ecosystem. This approach should be synthesized into an aspirational future state outlining the digital assets needed to achieve the ideal state (Exhibit 3). This functionality requires that all system interfaces follow an identical structure and logic. This approach should be synthesized into an aspirational future state that outlines the digital assets needed to achieve the ideal state (interactive). Attackers—insurers with pure-play digital business models, such as Lemonade in the United States, Youse in Latin America, or Nexible in Europe—are using digital applications such as chatbots to turn the process of buying a policy or filing a claim into a fast, simple, and satisfying experience. The Digital Insurer has built the world's largest dedicated knowledgebase on digital insurance for a community of more than 35,000 people who have a common interest in digital insurance. Gilbert, G. et al., Digital is reshaping US health insurance—winners are moving fast. For submitting and with customers (see sidebar “Defining AI”). Providing customers with the necessary information in digital channels offers customers the sense of control they desire. Practical resources to help leaders navigate to the next normal: guides, tools, checklists, interviews and more. They must also build in support in case customers need it, such as online-chat with a claims handler or easy-to-find FAQs. … cookies, Digital disruption in insurance: Cutting through the noise, download Digital insurance in 2018: Driving real impact with digital and analytics (PDF–2MB), Digital Insurance Forum 2018: Making digital and analytics a reality in insurance, Claims in the digital age: How insurers can get started, McKinsey_Website_Accessibility@mckinsey.com, Insurance beyond digital: The rise of ecosystems and platforms, Insurance 2030—The impact of AI on the future of insurance, Friends or foes: The rise of European aggregators and their impact on traditional insurers, The five trends driving insurtech, live from DIA 2018, Burning questions from InsureTech Connect 2018: 48 hours at the world’s largest insurtech gathering, Commercial lines insurtech: A pathway to digital, Digital insurance in 2018: Driving real impact with digital and analytics (PDF–2MB), track—watch digital key performance indicators, lead—move from chief digital officer to chief transformation officer. our use of cookies, and For example, property and casualty insurance has seen the rise of digital disruptors such as Progressive and Geico, which have driven what had traditionally been a broker-led sale to a much more direct-distribution industry (about 40% of P&C insurance … Something went wrong. Use minimal essential 4 Exhibit 1 The healthcare industry has since been catching up, with CEOs and boards calling for greater digital … McKinsey Insights - Get our latest thinking on your iPhone, iPad, or Android device. McKinsey Quarterly. submit and resolve a claim. Europe is already feeling the effects of online aggregators, while commercial insurance is facing a future in which its players need to decide on whether and how to partner with insurtech companies. area. Press enter to select and open the results on a new page. To support these efforts, the claims department needs to pursue deep, cross-functional collaboration with other functions such as For example, Allianz’s Global Digital Factory launched a digital delivery hub to achieve change through digital projects, such as developing claims solutions, across its international operations. digital channels and solutions to ensure the customer’s experience of the evolving digital McKinsey uses cookies to improve site functionality, provide you with a better browsing experience, and to enable our partners to advertise to you. cookies, McKinsey_Website_Accessibility@mckinsey.com, From touchpoints to journeys: Seeing the world as customers do, the digital integration of the claims ecosystem, offering excellent omnichannel customer experience, Visit our Digital Insurance insights page, by fully automating back-office processes, Artificial intelligence: The time to act is now, What AI can and can’t do (yet) for your business, IT architecture that supports real-time digital interactions, vastly different requirements for the IT architecture, deeply integrating a digital way of working.