Insurance industry ‘struggling to be more agile:’ analytics summit speaker

Insurance providers need to use technology to improve their customers’ experience, but sometimes regulation gets in the way, speakers suggested at a recent conference.

The insurance industry is “struggling to speed up the process of being more agile,” said Paul MacDonald, RSA Canada’s senior vice president of claims and chief claims officer.

“Customers can go online and renew their passport with the government of Canada,” MacDonald said June 29 at the Insurance Analytics Canada Summit. “The vast majority of customers, with some exceptions, still can’t renew online most of their insurance products. That seems crazy to me that the Government of Canada’s faster than we are as an industry. That’s a bit of a wakeup call for us frankly.”

MacDonald was one speaker on a panel titled How Analytics are Transforming Claims, Underwriting and Pricing.

The moderator was Stephen Applebaum, managing partner at Insurance Solutions Group. Applebaum asked panelists how the use of data analytics in claims can address customer satisfaction.

“A lot of our internal processes were designed to improve our speed and our expenses” MacDonald said. “So now we are spending a lot of time asking ‘What does this mean for the customer? How many questions on the application? How long does it take for a claim to be processed? What is the fastest way for getting them to preferred supplier and why would they even bother using a preferred supplier?’”

The summit was held at the Toronto Marriott Downtown Eaton Centre Hotel.

Also speaking on the panel was Sam Natur, president and chief executive officer of brokerage Bullfrog Insurance Ltd.

“We are at the point now where smart phones are over 80% of the visits that come to our site,” said Natur. “We are a brokerage so we are not necessarily handling a claim, but it strikes me that at the end of the day, if we can make things as accessible to the customer as possible …  that in itself is just a step forward.”

Mississauga, Ont.-based Bullfrog lets commercial customers apply for insurance coverage, pay premiums and bind policies online.

“If you are looking at, ‘I am going to fax you a form and then you are going to fill it out and then you are going to fax it back to me,’ it’s like, is this 1985 again or what? It doesn’t make sense,” Natur said.

“We are trying to use analytics to understand what the customer experience is across the entire enterprise and then try to figure out how to reduce the cycle time for that experience,” MacDonald said.

One problem for insurers is that the industry is still “line of business specific,” MacDonald added.

“It’s not unlike the bank,” said MacDonald. “The bank says ‘Give me your 16-digit number.’ You do it. The person who answers the phone, says ‘Give me your 16-digit number.’ You somewhat unwillingly do it. Then you say, ‘I have a question,’ they transfer you do a different department and the first question is, ‘What’s your 16-digit number’ and you wanted to tear your hair out.”

The third panelist, Travelers Canada chief actuary Erika Schurr, suggested regulation sometimes gets in the way of being more customer-centric.

“Sometimes we want to do something what’s best for a customer and the regulator stops,” said Schurr. “Think of something like price optimization. You don’t like your increase to your Rogers bill? You can call them up and you can complain you can get a deal. You can’t do that with your auto insurance. It’s a regulated price and we’re kind of stuck with it. Sometimes there are practical things that get in the way of all this customer-centric technology.”

It can be “excrutiatingly difficult to apply” some of the principles of data analytics science “to the day to day operations of an organization,” MacDonald said.

“One of most vexing issues for us to tackle at our company is, how many employees do we have?” he said, adding the answer to that question can depend on several factors, such as whether the total includes contractors, part-time employees, everyone on payroll and people on disability leave.

“What the industrial revolution did to manufacturing artificial intelligence and machine learning is doing to the service industry,” MacDonald said. “We are not going to end up with as many staff five years from now. It’s going to be a drastic cut and the question is going to be how do you maintain high levels of service to customers in that environment?”

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