Claims Handling

These Big Data Tools Are Actually Impacting Claims

Claims handling is a constant source of friction between insurers and their insureds. Will new communication tools and big data be able to sort this old problem out? 
By: | June 1, 2018 • 5 min read

When we say “Big Data,” we’re talking about the ever-increasing amount of digital information being generated and stored. Companies are investing in technologies such as satellite imagery, artificial intelligence (AI) and blockchain to enhance the assessment of losses, settling of payments and other parts of claims handling.


Big data has a role in these technologies and in how the assessments play out.

In the case of low-value, low-complexity property damage claims, the most sanguine views foresee a future where losses will be paid automatically after high-quality images are safely sent by the policyholder to the insurer.

AI will make decisions by comparing the claim to extensive data banks of similar loss events. If indemnification is due, payments will automatically be ordered via blockchain-enabled smart contracts.

Complex property damage and liability losses present a different set of challenges, and it looks unlikely that human interaction will ever be completely bypassed. But novelties — like AI and drones — can help to shorten the life cycle of even the most complex claims.

Accelerating the Claims Process

Loss adjusting firm Crawford & Company claims it can reduce the time it takes to handle certain types of claims from 30 to 4.7 days, thanks to the use of drones in accelerating inspections. The drone-sharing system developed by WeGoLook, an Insurtech Crawford & Co acquired last year, was put to the test after hurricanes swept through the United States and the Caribbean in 2017.

“We deployed drones in Puerto Rico as the airport was closed after the hurricane, and adjusters were not able to fly into the island,” said Rohit Verma, chief operating officer, Crawford & Company.

“We then activated some WeGoLook members who were able to take initial pictures that we shared with insurers, so that they could take a quick first look at the damages.”

He said these technologies not only accelerate the process but also reduce the claims settlement costs by 20 to 30 percent compared to traditional methods.

Incorporating New Technologies

Satellite imagery and smartphone applications are also being deployed to quickly and safely capture visual data.

Dave Fitzgerald, global chief claims officer, Starr Companies

Loss adjusting company Cunningham Lindsey (recently acquired by Sedgwick) has developed a number of projects.

The app iSite, for example, enables adjusters to make high-definition images of a loss site that can then be turned into a film and safely shared with other participants in the process, said Neil Gibson, the company’s loss adjusting services director.

The company also employs satellite imagery provided by third-party suppliers to assess losses in war-torn areas, he added.

The company introduced a Facetime-like messaging application policyholders can use to establish a safe line of communication with the underwriter. Information provided is immediately shared with the several parties involved.

“Technology frees people up and gives them more time to focus on customer service and other important activities,” said Dave Fitzgerald, global chief claims officer, Starr Companies.

But simply launching new technology is not enough. Insurers need to ensure the data collected is properly crunched and turned into palpable benefits for clients.

That’s where machine learning and AI come into play, as they enable claims departments to quickly identify patterns that will inform more efficient decisions.

“When we start looking at indicators, and we get into predictive analytics, we can establish which files will have the most impact in a given day,” Fitzgerald said. “We can then set up a proactive diary with our adjusters.”

He added: “We can get claims to adjusters quicker. As we integrate technologies, tasks that were handled by our adjusters can be handled by third parties, such as independent adjusters. In the case of statutory lines such as workers’ comp, the system reminds claims officials of when forms need to be filed again.”

Data Analytics’ Role in Claims

In-depth data analysis can lead to preventive measures that will reduce the impact of future losses, Fitzgerald said. “IT can help with loss avoidance as the deep knowledge of insured issues and past claims can help red-flag issues for loss control services.”


The predictive capabilities of data analytics should eventually benefit even complex liability cases, according to experts.

For example, they can enable claims departments to look for particular nuggets of information among thousands of court cases and media reports with one click instead of sending someone to manually dig for data in paper files or internet searches.

“Shortage of data is not a problem for organizations. The problem is that the wealth of data that they have may not be stored in a structured form.” — Rajesh Iyer, head of data science, Xceedance

“We are using data analytics to look at the litigation probability of a case,” Verma said. “By making a recommendation to the insured or the insurers, we can help to close a case faster if we think there is a high probability of it leading to litigation.

Rajesh Iyer, head of data science, Xceedance

“We can also look at litigation outcomes, based on the type of claim, the parties involved and other factors, in order to accelerate the claims.”

Rajesh Iyer, head of data science for Xceedance, an IT consulting firm, noted that AI and machine learning have the potential to boost “judgment tasks” within the claims handling process, which rely on the data accumulated by insurers while evaluating losses.

“Shortage of data is not a problem for organizations. The problem is that the wealth of data that they have may not be stored in a structured form.”

Incorporating Blockchain

Blockchain is the next frontier.

At least in theory, as blockchain systems allow parties of an insurance policy to add and share information securely via a common but unique ledger that creates new records for every single change, they make it possible to set up smart contracts that will trigger payments automatically, once agreed conditions are met.

“If a loss happens, participants can get information immediately around the claim, including pictures and reports, speeding up its resolution,” said Shawn Crawford, global insurance leader at EY, a consultancy firm.

Blockchain technology also lowers fraud risk, removing another hurdle to the quick settlement of claims.


The challenge for many underwriters and service providers is to have the financial muscle to develop the technologies that can turn claims handling into a more efficient job.

To dodge this difficulty, many are opting to partner with innovative FinTech companies that, as Fitzgerald noted, force established firms to continuously question old industry practices.

Lloyd’s underwriter Brit is one of them. It has an agreement with online banking platform Vitesse to streamline the management and tracking of loss funds, a common source of claim settlement delay.

Sheel Sawhney, Brit’s global head of claims, said the system enables the company’s partners to make direct payments to policyholders at a lower cost, while automatically performing tasks such as sanctions vetting.

“What’s more, we have full visibility of payments and balances, and it positions us to further reduce the time it takes to pay claims.” &

Rodrigo Amaral is a freelance writer specializing in Latin American and European risk management and insurance markets. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Exclusive | Hank Greenberg on China Trade, Starr’s Rapid Growth and 100th, Spitzer, Schneiderman and More

In a robust and frank conversation, the insurance legend provides unique insights into global trade, his past battles and what the future holds for the industry and his company.
By: | October 12, 2018 • 12 min read

In 1960, Maurice “Hank” Greenberg was hired as a vice president of C.V. Starr & Co. At age 35, he had already accomplished a great deal.

He served his country as part of the Allied Forces that stormed the beaches at Normandy and liberated the Nazi death camps. He fought again during the Korean War, earning a Bronze Star. He held a law degree from New York Law School.


Now he was ready to make his mark on the business world.

Even C.V. Starr himself — who hired Mr. Greenberg and later hand-picked him as the successor to the company he founded in Shanghai in 1919 — could not have imagined what a mark it would be.

Mr. Greenberg began to build AIG as a Starr subsidiary, then in 1969, he took it public. The company would, at its peak, achieve a market cap of some $180 billion and cement its place as the largest insurance and financial services company in history.

This month, Mr. Greenberg travels to China to celebrate the 100th anniversary of C.V. Starr & Co. That visit occurs at a prickly time in U.S.-Sino relations, as the Trump administration levies tariffs on hundreds of billions of dollars in Chinese goods and China retaliates.

In September, Risk & Insurance® sat down with Mr. Greenberg in his Park Avenue office to hear his thoughts on the centennial of C.V. Starr, the dynamics of U.S. trade relationships with China and the future of the U.S. insurance industry as it faces the challenges of technology development and talent recruitment and retention, among many others. What follows is an edited transcript of that discussion.

R&I: One hundred years is quite an impressive milestone for any company. Celebrating the anniversary in China signifies the importance and longevity of that relationship. Can you tell us more about C.V. Starr’s history with China?

Hank Greenberg: We have a long history in China. I first went there in 1975. There was little there, but I had business throughout Asia, and I stopped there all the time. I’d stop there a couple of times a year and build relationships.

When I first started visiting China, there was only one state-owned insurance company there, PICC (the People’s Insurance Company of China); it was tiny at the time. We helped them to grow.

I also received the first foreign life insurance license in China, for AIA (The American International Assurance Co.). To date, there has been no other foreign life insurance company in China. It took me 20 years of hard work to get that license.

We also introduced an agency system in China. They had none. Their life company employees would get a salary whether they sold something or not. With the agency system of course you get paid a commission if you sell something. Once that agency system was installed, it went on to create more than a million jobs.

R&I: So Starr’s success has meant success for the Chinese insurance industry as well.

Hank Greenberg: That’s partly why we’re going to be celebrating that anniversary there next month. That celebration will occur alongside that of IBLAC (International Business Leaders’ Advisory Council), an international business advisory group that was put together when Zhu Rongji was the mayor of Shanghai [Zhu is since retired from public life]. He asked me to start that to attract foreign companies to invest in Shanghai.

“It turns out that it is harder [for China] to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

Shanghai and China in general were just coming out of the doldrums then; there was a lack of foreign investment. Zhu asked me to chair IBLAC and to help get it started, which I did. I served as chairman of that group for a couple of terms. I am still a part of that board, and it will be celebrating its 30th anniversary along with our 100th anniversary.


We have a good relationship with China, and we’re candid as you can tell from the op-ed I published in the Wall Street Journal. I’m told that my op-ed was received quite well in China, by both Chinese companies and foreign companies doing business there.

On August 29, Mr. Greenberg published an opinion piece in the WSJ reminding Chinese leaders of the productive history of U.S.-Sino relations and suggesting that Chinese leaders take pragmatic steps to ease trade tensions with the U.S.

R&I: What’s your outlook on current trade relations between the U.S. and China?

Hank Greenberg: As to the current environment, when you are in negotiations, every leader negotiates differently.

President Trump is negotiating based on his well-known approach. What’s different now is that President Xi (Jinping, General Secretary of the Communist Party of China) made himself the emperor. All the past presidents in China before the revolution had two terms. He’s there for life, which makes things much more difficult.

R&I: Sure does. You’ve got a one- or two-term president talking to somebody who can wait it out. It’s definitely unique.

Hank Greenberg: So, clearly a lot of change is going on in China. Some of it is good. But as I said in the op-ed, China needs to be treated like the second largest economy in the world, which it is. And it will be the number one economy in the world in not too many years. That means that you can’t use the same terms of trade that you did 25 or 30 years ago.

They want to have access to our market and other markets. Fine, but you have to have reciprocity, and they have not been very good at that.

R&I: What stands in the way of that happening?

Hank Greenberg: I think there are several substantial challenges. One, their structure makes it very difficult. They have a senior official, a regulator, who runs a division within the government for insurance. He keeps that job as long as he does what leadership wants him to do. He may not be sure what they want him to do.

For example, the president made a speech many months ago saying they are going to open up banking, insurance and a couple of additional sectors to foreign investment; nothing happened.

The reason was that the head of that division got changed. A new administrator came in who was not sure what the president wanted so he did nothing. Time went on and the international community said, “Wait a minute, you promised that you were going to do that and you didn’t do that.”

So the structure is such that it is very difficult. China can’t react as fast as it should. That will change, but it is going to take time.

R&I: That’s interesting, because during the financial crisis in 2008 there was talk that China, given their more centralized authority, could react more quickly, not less quickly.

Hank Greenberg: It turns out that it is harder to change, because they have one leader. My guess is that we’ll work it out sooner or later. Trump and Xi have to meet. That will result in some agreement that will get to them and they will have to finish the rest of the negotiations. I believe that will happen.

R&I: Obviously, you have a very unique perspective and experience in China. For American companies coming to China, what are some of the current challenges?


Hank Greenberg: Well, they very much want to do business in China. That’s due to the sheer size of the country, at 1.4 billion people. It’s a very big market and not just for insurance companies. It’s a whole range of companies that would like to have access to China as easily as Chinese companies have access to the United States. As I said previously, that has to be resolved.

It’s not going to be easy, because China has a history of not being treated well by other countries. The U.S. has been pretty good in that way. We haven’t taken advantage of China.

R&I: Your op-ed was very enlightening on that topic.

Hank Greenberg: President Xi wants to rebuild the “middle kingdom,” to what China was, a great country. Part of that was his takeover of the South China Sea rock islands during the Obama Administration; we did nothing. It’s a little late now to try and do something. They promised they would never militarize those islands. Then they did. That’s a real problem in Southern Asia. The other countries in that region are not happy about that.

R&I: One thing that has differentiated your company is that it is not a public company, and it is not a mutual company. We think you’re the only large insurance company with that structure at that scale. What advantages does that give you?

Hank Greenberg: Two things. First of all, we’re more than an insurance company. We have the traditional investment unit with the insurance company. Then we have a separate investment unit that we started, which is very successful. So we have a source of income that is diverse. We don’t have to underwrite business that is going to lose a lot of money. Not knowingly anyway.

R&I: And that’s because you are a private company?

Hank Greenberg: Yes. We attract a different type of person in a private company.

R&I: Do you think that enables you to react more quickly?

Hank Greenberg: Absolutely. When we left AIG there were three of us. Myself, Howie Smith and Ed Matthews. Howie used to run the internal financials and Ed Matthews was the investment guy coming out of Morgan Stanley when I was putting AIG together. We started with three people and now we have 3,500 and growing.

“I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.” — Maurice “Hank” Greenberg, chairman and CEO, C.V. Starr & Co. Inc.

R&I:  You being forced to leave AIG in 2005 really was an injustice, by the way. AIG wouldn’t have been in the position it was in 2008 if you had still been there.


Hank Greenberg: Absolutely not. We had all the right things in place. We met with the financial services division once a day every day to make sure they stuck to what they were supposed to do. Even Hank Paulson, the Secretary of Treasury, sat on the stand during my trial and said that if I’d been at the company, it would not have imploded the way it did.

R&I: And that fateful decision the AIG board made really affected the course of the country.

Hank Greenberg: So many people lost all of their net worth. The new management was taking on billions of dollars’ worth of risk with no collateral. They had decimated the internal risk management controls. And the government takeover of the company when the financial crisis blew up was grossly unfair.

From the time it went public, AIG’s value had increased from $300 million to $180 billion. Thanks to Eliot Spitzer, it’s now worth a fraction of that. His was a gross misuse of the Martin Act. It gives the Attorney General the power to investigate without probable cause and bring fraud charges without having to prove intent. Only in New York does the law grant the AG that much power.

R&I: It’s especially frustrating when you consider the quality of his own character, and the scandal he was involved in.

In early 2008, Spitzer was caught on a federal wiretap arranging a meeting with a prostitute at a Washington Hotel and resigned shortly thereafter.

Hank Greenberg: Yes. And it’s been successive. Look at Eric Schneiderman. He resigned earlier this year when it came out that he had abused several women. And this was after he came out so strongly against other men accused of the same thing. To me it demonstrates hypocrisy and abuse of power.

Schneiderman followed in Spitzer’s footsteps in leveraging the Martin Act against numerous corporations to generate multi-billion dollar settlements.

R&I: Starr, however, continues to thrive. You said you’re at 3,500 people and still growing. As you continue to expand, how do you deal with the challenge of attracting talent?

Hank Greenberg: We did something last week.

On September 16th, St. John’s University announced the largest gift in its 148-year history. The Starr Foundation donated $15 million to the school, establishing the Maurice R. Greenberg Leadership Initiative at St. John’s School of Risk Management, Insurance and Actuarial Science.

Hank Greenberg: We have recruited from St. John’s for many, many years. These are young people who want to be in the insurance industry. They don’t get into it by accident. They study to become proficient in this and we have recruited some very qualified individuals from that school. But we also recruit from many other universities. On the investment side, outside of the insurance industry, we also recruit from Wall Street.

R&I: We’re very interested in how you and other leaders in this industry view technology and how they’re going to use it.

Hank Greenberg: I think technology can play a role in reducing operating expenses. In the last 70 years, you have seen the expense ratio of the industry rise, and I’m not sure the industry can afford a 35 percent expense ratio. But while technology can help, some additional fundamental changes will also be required.

R&I: So as the pre-eminent leader of the insurance industry, what do you see in terms of where insurance is now an where it’s going?

Hank Greenberg: The country and the world will always need insurance. That doesn’t mean that what we have today is what we’re going to have 25 years from now.

How quickly the change comes and how far it will go will depend on individual companies and individual countries. Some will be more brave than others. But change will take place, there is no doubt about it.


More will go on in space, there is no question about that. We’re involved in it right now as an insurance company, and it will get broader.

One of the things you have to worry about is it’s now a nuclear world. It’s a more dangerous world. And again, we have to find some way to deal with that.

So, change is inevitable. You need people who can deal with change.

R&I:  Is there anything else, Mr. Greenberg, you want to comment on?

Hank Greenberg: I think I’ve covered it. &

The R&I Editorial Team can be reached at [email protected]