Closing the Claims Talent Gap through Digital Transformation

Advanced technologies, like AI, ML and IoT, can support understaffed insurance companies, helping them compete in today’s market.

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In the insurance industry, experienced claim professionals are retiring at higher rates than companies can fill vacancies. Many veteran insurers delayed retiring during the pandemic, but there is now a surge in departures. The U.S. Bureau of Labor Statistics notes that half a million insurance employees will retire soon. Similarly, a survey from The Institutes revealed that eight in ten millennials were unaware of career opportunities in the insurance industry.

The ongoing challenge of attracting new entrants and retaining a qualified claims workforce has been exacerbated further by mounting customer demands across the claims process, including the growing expectation among workers for remote and hybrid options. As a result, many insurers struggle to support their dispersed staff working across numerous claim types and jurisdictions, which require significant expertise to navigate the variety of cases.

Undeniably, a talent gap has emerged in today’s competitive marketplace, and it is paramount that insurance brands address it. One solution, which has had success in other industries, is digital transformation.

Closing the Talent Gap with Technology  

A talent gap is a gulf between the skills needed to perform a job and the set of skills the employee actually possesses. Consider that a claims professional handling a claim involving litigation must juggle many complex responsibilities, from identifying and understanding coverage and defense issues to selecting and assigning proper legal counsel. However, because of the shortage of veteran claim adjusters, insurance companies must give these higher-level tasks to less experienced personnel. As a result, insurers are pursuing digital transformation to equip their claims professionals with digital tools to close the talent gap.

Solutions based on technologies such as artificial intelligence (AI), Internet of Things (IoT) and machine learning (ML), can empower insurers to provide customers with a seamless and personalized claims experience. Simultaneously, these digital capabilities allow insurers to tackle the escalating demands from their policyholder groups. For example, automation and self-service technologies let insurance companies streamline repetitive, high-volume claims, helping an understaffed workforce increase productivity with fewer people. And for shorthanded insurance companies with few practiced adjusters, conversational AI and machine learning can help navigate complex tasks like state-specific coverages.

Moreover, ML and predictive analytics enable insurers to more effectively select pricing, forecast trends and identify risks such as fraud and potential customer cancellation. IoT integrations have also proven to be invaluable in the claims process. Since consumers are more willing to share their personal data if they can save money on their insurance policies, insurers can use IoT to optimize much of that data sharing. By utilizing these IoT solutions, insurers can enhance risk assessment accuracy and boost revenues.

The New Role of the Modern Insurer  

While these various technologies are pivotal to helping insurers drive positive claim outcomes in the increasingly competitive market, insurers must articulate to their staff how these solutions will change how they work. Many seasoned adjusters (who haven’t yet retired) may only be familiar with older methods and processes, while younger adjusters might be enticed by technologies like AI and ML. To efficiently use new digital tools, insurance companies must train their claims professionals accordingly to boost their digital literacy and competency.

The claim adjuster’s role is changing: no longer will their sole responsibility be to manage claims, nor will they react to developments after the fact. Digital transformation and the tools that accompany it will evolve claims professionals into something akin to risk advisors who proactively addresses claim mitigation. With the increase in digital literacy, they’ll be able to provide a consultation before, during and even after a claim while delivering value-added services like loss avoidance, mitigation and analytics that drive data-driven insights.

Pitfalls of Digital Transformation 

The unfortunate reality is that 70 percent of all digital transformation projects fail to succeed in all three categories of quality, time and cost. Pitfalls that prevent businesses from realizing their digital initiatives include inadequately allocated skills and resources, unclear goals and objectives and lack of buy-in from employees to name a few. In addition to taking measures to avoid these common mistakes, insurance companies must take inventory of their existing digital capabilities to determine if they’ll require the assistance of a third-party partner.

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Steven Tesler and Darin Campana // Steven Tesler is the Principal of Insurance Consulting at EPAM Continuum, the integrated business, technology and experience consulting practice of EPAM Systems, Inc. With more than 25 years of experience supporting the insurance industry as a consultant, technology strategist and solutions consultant, Steven has a track record of managing cross-functional teams in executing strategic initiatives across business, finance, operations and technology from design through implementation. Darin Campana is a Senior Manager of Insurance Consulting at EPAM Continuum. In this role, he provides advisory services to insurance clients through their transformation and modernization journeys. With more than 25 years of experience across consulting and insurance industries, Darin helps clients enable technologies in the disruption of today’s insurance markets including intelligent process automation, big data, artificial intelligence (AI), omni-channel applications and IoT.

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