15 Jan 2020

In October 2019 WBD launched its own independent claims handling operation for all financial lines claims. The firm had been successfully claims handling and providing a variety of fixed fee services for insurance clients for a number of years but over the course of 2019 we took the opportunity to review all aspects of our service to establish how it could be improved and to clearly demonstrate our continued commitment to supporting our clients' needs.

This resulted in launch of a separate claims handling team headed up by David Clark, who had previously led the financial lines claims handling service at Clyde & Co and had held several claims management positions within the London and regional UK markets, specialising in managing Third Party Administrator (TPA) claims schemes.

Our new service is currently operating out of our London and Southampton offices and we will shortly be launching in Plymouth. We have devised what we hope is an exciting pricing structure and we additionally now have the support of a market-leading claims platform, allowing us to meet all of our clients' requirements in terms of management information (MI - more on this later), remote access, Service Level Agreement (SLA) driven workflows and communication with clients' own systems. 

The importance of MI

As part of the implementation and development of our new claims handling system, we have looked at the requirements of systems as they currently are and how those requirements might shift, from both a client perspective and our own business needs. This has led to discussions with our system supplier and with our clients.

The main message being received very clearly is the importance of our system being able to produce meaningful and reliable management information. Further, such information needs to be available in real time, with flexibility around how the information is displayed/provided.

It is essential that a TPA claims management system is able to analyse both financial and KPI related data and then feed this data in to the reporting requirements listed above. Communication between systems is a vital part of the process and wherever possible data should transfer automatically from the TPA to the insurer to avoid time consuming processing of data.

Clients, we find, are also looking for TPAs to be using a system that assists claims handlers as much as possible in terms of workflow. This serves the dual purpose of making claims processing more efficient (and therefore hopefully reducing the overall file lifecycle) and ensuring the TPA is complying automatically (as far as possible) with the terms of the SLA governing the relationship between the client and the TPA.

What might the future hold?

Looking ahead, we are expecting to see within claims systems further development around and use of Artificial Intelligence (AI), Robotic Processing Automation (RPA), Optical Character Recognition (OCR) and chatbots within the claims handling sector. This technology is already being used (not always successfully to be fair) for types of insurance where more process driven claims handling is possible (eg household and motor). Presently there has been limited impact into the financial lines sector – where the machine is providing assistance to the human handler rather than actually trying to handle a claim – but clearly that will change.

We expect to see further development in terms of machine learning, more advanced workflows, automated invoice processing, document review, automated filing and basic task completion. The more the machine tries to do, and the more data it has at its disposal, the more quickly it will learn.

The challenge for claims handling system developers – as automation grows in the financial lines sector and the machine is effectively helping as much as it can – will be what next? This leads on to the issues of triage, assessing coverage, reserving and strategy. But how do you replicate the thought process of an experienced claims handler around complex issues such as these? The technology is not there yet and it is not anticipated that this particular advancement will occur in the next 12 months. 

An interesting question is what impact those system developments that do occur – in terms of automation and other more complex abilities handling systems – will have on the role of financial lines claims adjusters at insurance companies in the long term? One school of thought is that the adjuster role will adapt in a similar manner to that sometimes seen in personal lines insurances where claims handlers are effectively checking the output of the system.

While that might seem possible on face value, we see a potential problem in the long term here. Currently, claims handlers develop their skills over a long period and invariably start out dealing with more straightforward cases. It is also very much a role where practical experience far outweighs theoretical. Where will adjusters gain the necessary experience to be able to identify where AI may have gone wrong or ensure more serious cases proceed along the right path, if they are not able to gain the necessary experience? 

Clearly these system developments are relevant not just to individual insurers but also to how the London Market adapts to the ever changing needs of the global marketplace. We intend to be at the forefront of these discussions with both system developers and the market as they continue in 2020.