Old and New

Change can be exciting, it can be progressive and, as the saying goes, it can be good.

But the head-over-heels love affair with change occasionally needs to be tempered by feet-on-the-ground reminders that change also comes with potential risks.

The current view of technology is one such example.

Information technology research and advisory company Gartner notes that, IT spending worldwide is on pace to grow 2.4%, bringing the total to US$3.8 trillion in 2015. A lot of support is needed for, among other things, the ongoing use of things like computers, mobile phones and tablets.

In the property and casualty space, the promise that technology holds with regard to how much more efficient it can make processes – reporting incidents, sharing claims information, upping timely communications – is remarkable. Pair that with the associated data that can be collected, stored and used as an assessment or preventive tool, and the possibilities are truly mind-boggling.

The caution, though, is to ensure the best of the “old” process is retained and incorporated into the “new.”

When it comes to claims, for example, maintaining a level of human contact that fits the needs and expectations of the insured – the individual insured; not the “insured” as a group – is highly recommended.

Never is customer experience more important than at the point of claim. Moving forward with change – even change that ultimately is applauded and adopted – initially demands considering the support that must go along with that progress.

Gartner further recently reported that weak mobile customer service is harming customer engagement and that by 2017, a third of all customer service interactions will still require the support of a human intermediary.

Overall impressions, it seems, do matter. Gartner notes that translating the general and departmental customer engagement concept into operational components across the enterprise “is transforming the definition of customer service from an isolated function into an enterprise objective delivered across all points where the customer ‘touches’ the business.”

Although the findings relate to mobile customer service in general, for insurance, it is nonetheless telling that the pace of introduction channel choice and the focus on personalized customer experiences will require companies in most industries to retain a highly trained core of customer service professionals.

A Towers Watson survey last year made clear just how important customer service is to chief claims officers (CCOs) south of the border.

Loss cost containment was ranked as either the primary or secondary claim operational goal of 89% of polled CCOs, while delivering superior customer service was the primary or secondary claim operational goal.

In addition, 83% of those surveyed indicated proactive claims handling is the most important tactic to achieving both those objectives.

Innovation will surely come into play. Celent reports that its recent poll shows that, overwhelmingly, respondents cited innovation as important or critical to achieving company strategy.

That said, when efforts in innovation – defined as fundamental changes to products, services or business models that break existing trade-offs and result in value to the customer – in Canadian insurers was examined, respondents were dissatisfied. “Insurers need to innovate to meet consumer expectations,” says Mike Fitgerald, a senior analyst with Celent’s insurance practice and report author.

When the Towers Watson respondents were asked about challenges in delivering superior claim outcomes, they cited insufficient understanding of leading indicators and metrics (46%), high levels of inventories/caseloads (43%), and lack of sufficient technical expertise (40%).

That final point makes clear it is key to embrace technology to improve processes, but there must also be investment in education and training for staff (in claims, as elsewhere) dealing with that technology to ensure customer experience remains the central objective.