InsurTech disruption brings many positive changes into every aspect of the insurance industry including the insurance claims ecosystem. The claims sharing concept is based on digitizing the claims process through an automated exchange of insurance claims between Business-to-Business (B2B) customers, insurance service providers, and other claim process participants.

The necessity of integrating insurance claims data has always been on the minds of multiple claims process participants. The standardization of insurance data structure was successfully introduced by ACORD¹ in the US and this approach could potentially ease the insurance data integration attempts. However, the difficulty of connecting a vast number of claims process participants remained, so the proper way to ease the full integration of insurance claims data became technically realistic when an independent hub structure was introduced.

The basis of the concept is an Open Application Programming Interface (API) hub, where any claims system can connect to exchange data with other systems. The hub can also send all claims details via automated emails to the claims process participants who are not connected to the hub.

The hub should also have a web platform for entering claims data directly. Where the companies do not have their own claims system, they could use the hub to account for their claims. This option also enables them to amend/append the data if this cannot be done by their own system. The platform should allow for anyone to record and share an unlimited number of claims for free, and ensure that all key participants to a claim are involved.

This chapter aims to explain the practical aspects of our claims sharing concept and the proactive changes it brings within current claims handling practices.

Streamlining Claims Processing

One of the primary challenges affecting the digital transformation of current insurance claims processing practices is to ensure the automatic distribution of all originally recorded claims data, lodged within the databases of all claims handling participants. Once the claims data is entered by each participant, the need for repetitive data entries by other participants becomes irrelevant and should be fully eliminated – thus reducing tedious manual data entries, minimizing claim cycle time, and enabling efficient exchanges of large volumes of data.

Typically, any single insurance claim involves a fair amount of manual work and time for all participants involved in a specific claim process. In the event of an accident, the company claimant has to enter the claim data twice – into its own claim system or spreadsheet and then into another reporting system for the insurer or the broker.  All additional updates and exchanges of claims data are also performed manually.

When insurers receive a First Notice of Loss (FNOL) by email or phone, they must enter the claims data into their system manually.  The self-service platforms and apps enable insurers to minimize their own manual work, but they will not be able to refuse to accept mails from their clients – major B2B clients who send FNOL via automated emails.

The claims sharing hub will exchange the claims data with an insurer’s claims system, similarly to the way various insurers’ self-service platforms register and process claims data. Therefore, the hub will not interfere with the usual tasks of claims adjusters but ensure an automated 100% claims data entry.

The burden of double manual entry work also falls upon insurance brokers, as discussed later, as well as on transport leasing companies, garages/workshops, loss adjusters, and other claims process participants. In some cases, a certain type of claim is processed without an insurer’s involvement, for example, freight forwarders often handle complaints between transport carriers and cargo owners.

Leveraging Apps and the Internet of Thing (IoT) for Real-time B2B Insurance Claims Data

On the one hand, during the course of the past few years, insurers started investing into artificial intelligence and machine learning technologies to improve underwriting, enhance fraud prevention, and automate sales and claims processes. They knew that the more accurate, precise, and detailed data they got access to, the more efficient the results could be. Real-time data collection became more effective with the use of telematics in vehicles and various autonomous sensors able to measure speed, airbag deployment, cargo temperature, and so on.

On the other hand, insurers were, and are still, looking for ways to simplify and speed up the claims process while raising customer experience and satisfaction to new levels. The automation of exchanges among claims data feeds is a potential option to solve the contradiction arising from the need for accessing increasing volumes of claims data while simplifying the claims process.

There are multiple IT solutions available to insurers including FNOL and claim settlement apps that can be used directly by private customers. However, such apps do not work well for business customers. For example, a company truck driver is not empowered to send claims-related accident data directly from his mobile app to the insurer, because the decision to report a claim must be made by his company, the owner of the insurance contract. The direct integration between the claims systems of the insurers and their B2B customers will never take place. Therefore, a claims sharing hub seems to be the best option to solve this data collection problem.

There is also a major issue standardizing data formats. Every app, IoT device, or provider of data sources today tends to have very specific data structures that must be accepted by different data systems. The hub is an ideal place to coordinate seamlessly multiple data formats and sources.  

The Revised Role for the Broker

When it comes to insurance claims handling, brokers fall into two types – those who handle claims and those who don’t. The first type of broker requests their clients to report all claims directly to them, with the majority of claims being fairly standard. More than 90% of brokers’ work consists of just forwarding the claim information from the client to the insurer and back. This also slows down the claims processing. Integration of brokers’ and insurers’ claims systems would save a great deal of time for every single broker, but, in reality, such integrations are costly and not very common.

The second type of broker does not face the abovementioned problems; however, in this case, they do not have access to any claims information under the insurance policies they service, which means that they are unable to improve the quality of the customer service they deliver.

In both cases, the brokers’ practices are flawed. They are unable to speed up their service delivery or serve their clients appropriately. The insurance market would benefit from a broker-focused solution that can be managed via the hub.

A hub that eases the exchange of claims will provide B2B clients with an opportunity to share claims data, whether complex or simple, at their own discretion simultaneously with the insurer and the broker, and it will relieve brokers from the need to enter claims data into a multitude of systems. As a result, all brokers will have equal technical opportunities to monitor claims.

Uberization of Claims Surveying

Insurers will always need to inspect a damaged property or the site of an accident. Creation of a large surveyors’ network does not provide an effective solution. InsurTech technologies, like Rescue Lens,² offer solutions to insurers to capture details of accidents directly from a site with the help of the apps used by their customers. However, there will always be cases when the insurer will need to send their representative to review the claims. The Uberization of the claims experts’ structure is imminent. Actually, one startup organization located in the US is focusing its effort just on this.³ The insurer must know which independent surveyors are located near the accident site and be able to select the most relevant and skilled expert based on availability. The hub platform and its exchange principles are both the right environment to provide access to the expert network as the hub contains all the details about experts, key accident data, and claims.

Blockchain Technology for Reliable Data and Fraud Prevention

Even though the blockchain is still emerging in insurance, it has been utilized for user cases in the intracompany challenge areas in the banking sector.

To provide a B2B customer with an insurance quote, an insurer must analyse the customer’s loss history. Bearing in mind that some losses relate to self- or uninsured cases, the B2B customer becomes the only information source for his full loss records. Insurers and insureds understand that insurance rates depend on the loss history. Therefore, in a situation where insurers do not have an opportunity to verify loss records, there is no trusted data exchange and transparency between parties. In addition, financial losses caused by dishonest and fraudulent clients lead to increased rates for the whole insurance sector.

This problem can be solved by a claims sharing platform, able to provide any company with the opportunity to keep correct records of claims/losses in one place, the credibility of which is validated by a blockchain-based technology. Such platform enhancement will not violate privacy rules: the company will decide which data point can be shared with whom.

This solution can be especially useful for the smart enablement of developing countries’ economies. For example, in the absence of compulsory motor third-party liability insurance and due to the lack of trust between insurers and business customers, a vast amount of commercial transport has been left uninsured. Blockchain validation will reinstate the trust among parties. This will result in the increase of volume in the insurance market.

We at ClaimsControl have designed such a platform.