The evolving value of the claims sector

While the traditional view of claims is that it sits towards the back of the value chain, that is changing, a speaker said Wednesday during KPMG’s 30^th annual insurance conference.

The evolving role of claims was one of four macro (or high-level) trends discussed during the Reimagining Operations session at the virtual conference. Paul Jones, senior manager with KPMG in Canada, said the traditional view of claims is that it “has to deal with the repercussions of all of the policies that have been written, and it’s a very process-focused function within an insurer.

“We’re starting to see that change as we start to see claims really demonstrate value within the organization, and demonstrate that it can bring insight that can start to shape the strategy and really impact the end-to-end value chain of every insurer,” Jones said. “So, I think it’s definitely an interesting, exciting place to be, where claims moves from the back of the value chain very much towards the front.”

In addition to the evolving role of claims, the three other global macro trends KPMG is seeing include those related to customer expectations, digital capabilities, and a purpose-driven culture, Jones said. There are also seven ‘connected trends’ driving the traditional claims function into a new era of enhanced service, modern capabilities and efficiency, ranging from operational management to supply chain and ESG (environmental, social and governance measures), among others.

From a customer expectations standpoint, claims must adapt to new service expectations, which have been exacerbated by “this rapid shift to digital driven by the pandemic,” said Jonathan Weir, partner with KPMG in Canada. “It’s got a lot of stickiness. And we found out that really customers’ preferences have moved more permanently towards omnichannel digital.”

This is true, even in the broker channel, Weir said. “There’s openness among brokers to allow for and to support direct interaction with carriers for specific time-sensitive interactions such as claims.”

As customers interact with different products and services, their expectations of a frictionless experience are shifting to insurance as well, Jones said. “And people are really keen to interact with their insurer the way that they do with Facebook, with Amazon, with Google, and with some of the other organizations that they deal with today.”

When it comes to culture, it’s important to recognize that people’s expectations with the claims workforce is changing. “People are starting to come to work wanting to be connected to something that’s a little bit larger than sitting down and just processing through claims every day,” Jones said.

“They really want to understand what’s the impact that they’re having on the organization, [and] how does their work connect to the work of their colleagues,” he said. And rather than coming into work just to do the work, they want to be coming in and improving the way that organizations work and really creating value. So, we’re seeing a shift towards a real purpose-driven culture.”

Weir added that promoting a culture of change is important, as KPMG’s clients realize that change is continuous and constant. “And those who are thriving from a business perspective are those who understand the need to be an organization that’s capable of change — and not just to the pandemic but in general — as an overall skill and a part of the culture ingrained in organizations.”

 

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