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 Table of Contents

  1. Unprecedented Change
  2. What Does This Mean For Key Decision Makers?
  3. Claims People of the Future
  4. Catastrophe And Weather-Related Claims
  5. Decreasing Volumes and Increasing Volatility
  6. Insurance Companies Becoming Data Analytics Companies
  7. Disruptive Technologies
  8. The Customer of the Future


Unprecedented Change

  The Insurance industry is one of the oldest in the world. The four major listed Australian insurers commenced operations between 1871 and 1925. Of course, it is an even earlier story in the US and Europe. In the most part, not much changed in the claims process over the past century. The population has of course increased. Motor vehicles became widespread and housing conditions have improved. We also saw the introduction of technology and legacy claims processing systems. The claims process itself, however, has remained personnel-heavy, administrative and complex. In the last few decades, huge changes occurred in the industry. Major insurers worldwide have invested significant amounts in improving their operations. Technology, operational processes and customer experience have been the main focus. The technological disruptions facing the industry in the next 100 years are immense. Executives will need unprecedented focus on change, agility and adaptation to new innovations. The most significant disruptions are occurring due to shifts in customer expectations. This includes the impact of the shared economy and technology advancements. Customer expectations of the claims service will continue to demand streamlined and multi-channel experiences. Leading companies are working to identify how seemingly unconnected technology advancements can impact the insurance industry. Sharing economy startups such as Airbnb and Uber are impacting insurance product offerings. Customer lifestyles are blurring the lines between personal and commercial insurance requirements (and product relevance). New technologies are constantly being introduced to serve claims assessment and repair functions. Innovative improvements in vehicle manufacture and domestic and commercial buildings will continue to reduce claim volumes. Safer vehicles, telematics, driverless vehicles and smart building sensors are only part of the future story. The volume and richness of available data and analytics will also provide many opportunities and challenges to the industry. Highly experienced innovators and analysts will form a key part of the workforce of the future.  

The Customer of the Future

Claims departments must continue to innovate the customer’s experience. Many insurers have already invested heavily in customer journey mapping exercises and trying to improve the digital channel experiences of their claims departments.


Speed and Service: No Compromises

The customer of the future expects everything instantly. They want access to information anytime and anywhere through whatever channel they choose (mobile, web, physical). Customers want it all – they want automation and efficiency at the same time as wanting a personal experience and support through a difficult experience. Insurance claims will need to offer a multi-channel, on-demand service where all channels result in the highest levels of customer experience. Customer service is likely to be the key differentiator in an increasingly competitive market. Consumers will continue to share their experiences and insurance companies need to manage the impact of this on their online reputation. Any breakdown in customer experience can be shared instantly and insurance companies will need to manage issues proactively before they become a PR headache. Claims departments that invest in the right people, processes and digital channels will be the big winners.1 Society is becoming on-demand leaving customers impatient and in constant need. They want 24-7 service and no inefficiency or buck-passing. They want fast and efficient claims processing and do not care about internal constraints, system issues or individual roles. Insurers will need to employ (and keep) a flexible and empowered workforce who can assist customers instantly through peaks and troughs in claim volumes. Younger customers are happy to share more data with their insurers but do not want to repeat their information at multiple points in their policy and claim journey.[note]Insurance Disrupted – General Insurance in a connected world, Deloitte LLP, 2015 Retrieved from[/note] Systems must be integrated, data secure and shared and staff able to provide personalised, relevant and real-time experiences along the journey.


Policyholders will not remain loyal to their insurer and won’t hesitate to switch after a poor claims experience. A recent survey found a failure in customer experience can result in up to 50% erosion in customer base over a five year period. Companies that focus solely on digital channels and technological tools without an equal focus on service quality will lose out with the customer of tomorrow.  

Disruptive Technologies

Emerging technologies will continue to have an enormous impact on the insurance industry and claims process in particular. Insurance companies will need to monitor the latest technological advances to determine:

  • How it will impact their customers’ lives and needs?
  • What are some potential advantages that can improve product offerings or claims and assessing services?

It will also become more common for insurers to partner with startup incubators as a way to identify new ideas and technologies that could result in customer improvements or industry disruptions. This partnership model is already evident in the Australian market and is likely to gain more traction worldwide. According to a recent Gartner report, the Internet of Things (IoT) is forecast to consist of 212 billion ‘things’ by 2020 including 30 billion autonomous ‘things’.  The Digital Insurer - The Customer-centric Insurer in the Digital Era, Accenture Report, 2014. The IoT is all about computer networked sensors and has the potential for major disruption (and opportunity) in insurance.  

From smart sensors in homes and commercial buildings, telematics connected to vehicles to autonomous vehicles, the impact on insurance is obvious. Results will include reduced volumes of business as usual (BAU) claims as well as the potential for remote monitoring so loss prevention or claim assessing and repair can commence immediately. Other technologies will have a significant impact on how the claims process works internally. The increased use of drones will continue to improve the efficiency of claims assessing in disaster situations. Drones will also be used to review damage for motor and property claims on the spot in BAU scenarios. Insurers will also continue to invest in flood mapping and data collection to support both underwriting and claims departments. Piercarlo Gera, senior managing director, Accenture Financial Services, recently said: “Successful financial services firms will, therefore, need a ‘phygital’ strategy that seamlessly integrates technology, branch networks and staff to provide a service that combines physical and digital capabilities and gives consumers a choice." Accenture News Release, January 11, 2017. Companies will continue to invest in digital tools and channels and we may see an increase in automation and robotic software, however, I believe that customer experience expectations will drive how far companies go in this direction. The ‘phygital’ generation is demanding the best of both worlds. It is likely that insurers will favour a tailored customer-driven model to ensure the customer experience is not compromised during the claims process. A recent Accenture report highlights the use of e-advisors offering 24/7 video and messaging service is likely to be more widely accepted than fully automated call centres.

Insurance Companies Becoming Data Analytics Companies

  The insurer of the future will invest huge amounts in the collection and analytics of real-time data about claims and individuals. Claims and assessing teams will have access to more real-time and relevant claims data than ever. Customers will share data from connected devices relating to vehicle usage, property sensors and social media channels. The volume of information available to claims teams will be immense. The key will be to ensure the right analytics, modelling tools, dashboards and, if required, the right external data analysts are available and applicable. Those companies that focus on integrated data and the ability to manipulate the data in meaningful ways will be the differentiator. Predictive analytics will allow claims modelling and integrated systems will path claims to the right claims management channel. Business analytics will be the key to providing insights to anticipate customer needs and improve the claims experience. Business intelligence techniques applied across the value chain will drive meaningful results from sales and distribution, underwriting, fraud and investigations, claims to handle, assessing and any customer interaction along the way. The Disruptive Impact of Big Data and Analytics in Insurance, Capgemini Report, 2015 

The biggest technology risk for Australian insurers is being left behind in the race to turn data into insights and insights into value. General Insurance Industry Review, KPMG, 2016 Retrieved from. Fraud detection and investigation will be highly data driven. Insurers will continue to invest in data analytics solutions to prevent and intercept attempted fraud. Business Intelligence and investigative analysis will continue to reduce fraud losses. Cybersecurity will continue to be a major investment for insurance organisations. As insurers are offering increasing digital channels for customer interaction and more integrated systems and portals (web and mobile apps) the risks of cyber attacks are continually increasing. Global Cyber Executive Briefing – Insurance Case Studies, Deloitte, 2017. Big data and analytics and the sheer volumes of data, manipulated and shared, further increases the risk of compromise. Companies will need to manage the related financial, reputation and regulatory risks involved.


Decreasing Volumes and Increasing Volatility

  Most experts agree that the volume of general insurance claims is likely to continue to reduce in most insurance lines. The biggest drivers of this continued reduction in claims are predicted to be attributed to: The impact of the IoT on claim frequency – for example monitoring sensors for fire and flood claims will continue to reduce claim volumes for homes and commercial properties. The increased use of telematics will continue to reduce accident likelihood, a variety of studies have found by as much as 20-30%.  


Improved vehicle and road safety will continue to decrease claim volume (and severity) for motor insurance in both personal and commercial lines. For example, there has been a 39.2% reduction in reported road accident fatalities and casualties between 1992-2014 in the UK. Semi-autonomous and fully autonomous vehicles – from driver assistance technologies commonplace in new cars through to fully autonomous vehicles, the impact on the volume of motor claims will be significant. It is anticipated there will be 10 million autonomous cars on the road by 2020.  

Catastrophe And Weather-Related Claims

It is also anticipated that increased volatility in natural hazard claims will continue. So, whilst BAU claims will decrease, the volume of more severe claims will increase. According to many reputable studies and climate scientists, one of the biggest changes that will come with climate change is an increase in the severity and frequency of extreme weather events. The insurer of the future will need to ensure their ability to scale up for natural hazard events at the same time as delivering BAU claim services. Companies will highly skilled and flexible workers will have the upper hand when scaling up and down and delivering exceptional service in times of natural disaster.  

From Recovery to Prevention

  Many insurers have already embarked on a journey away from disaster recovery to include mitigation in their focus and this trend is set to continue. For example:

  • Advisory programs on loss prevention for businesses, homeowners and drivers.
  • Increased investment by insurers in damage mitigation activities, for example, advance warning alert technologies.
  • Premium reductions in certain areas or based on resilience activities undertaken by individuals or governments. An example of this would be the highly successful Protecting the North campaign undertaken by Suncorp in Australia.
  • Government and industry lobbying activities for example relating to building codes, building retrofits, urban planning, flood, bushfire and cyclone resilience/mitigation.

Claims People of the Future

It is anticipated that the claims service teams of the future will be leaner, more efficient and more highly skilled. Reduced claims volumes, the omnichannel digital experience and automated self-serve channels will be the key drivers in this trend. Flexibility will be paramount, and this will benefit both the customers and the workforce.

Insurers will need to scale up claims teams in times of peak volumes and for natural disasters. Teams will also need to be more empowered as well as cross skilled across a broad range of functions to reduce customer handover points and enhance the customer experience.  Offshore call centres may become a thing of the past as increasing costs in traditional offshoring locations erode the initial benefits attributed to those operations and automation replaces the low skilled roles traditionally outsourced.  


The ability to quickly scale up disaster response units will continue to be a major focus as companies determine the best ways of managing volatility in the natural environment. Many insurers will investigate options to expand their value chain to include vehicle and building repair functions blurring the line between BAU claims assessing and repair functions.  

What Does This Mean For Key Decision Makers?

Insurance executives will need to show strong leadership in the face of rapid change. Decision makers will need to be flexible and agile with a constant awareness of new opportunities and threats. At the same time as being forward-thinking, they will also need to support their teams by changing operating models and delivering transformational strategies to ensure organisational resilience. Insurers will need to ensure that innovation does not become siloed into hubs. Across the whole organisation – individuals, teams and leaders need to be aware of disruptive technologies and innovation threats and opportunities and be able to respond quickly to change by rapidly bringing in expertise. The role of claims teams will change.

Leaders will need skills in managing distributed and flexible teams with a changing capability profile. Claims advisor roles will require more autonomy and a diverse range of skills. The focus will be on delivering a personalised customer experience and to anticipate and deliver on customer needs. Organisations that succeed will be those who:

  • Ensure customer centricity is real
  • Monitor and respond to emerging technologies and consumer changes
  • Leverage big data and analytics
  • Have a flexible, engaged and autonomous workforce
  • Invest in developing their people into future leaders and innovators.

The culture of the insurance organisation of the future needs to embrace technological change and transformational strategies. Strategic leaders will be the driving force of the successful insurers of the future.  

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