Technology as a Tool

At the Touch Of a Button

More customers benefit from digital risk services from carriers and vendors.
By: | April 7, 2014

Insurance has long been known as a business resistant to converting paper processes to digital ones — particularly for risk management accounts where face-to-face communications among brokers, carriers and insureds have traditionally ruled the day.

Still, many carriers and risk service providers have begun to recognize the competitive price of failing to take advantage of new technologies to enhance their customers’ experience and cement client loyalties.

“Insurers are only at the beginning of the journey to delight and surprise their clients with new experiences as they become more customer-centric and digital,” blogged Accenture’s Thomas Meyer, insurance lead for the consultant in Europe, Africa and Latin America.

“Because the insurance industry has been resistant to change over the past three centuries, building momentum for real change will not be easy,” he wrote.

“Insurers are only at the beginning of the journey to delight and surprise their clients with new experiences as they become more customer-centric and digital.”

— Thomas Meyer, insurance lead, Accenture

A study of 100 global insurers by EY — what Ernst and Young is now known as — released late last year found that in their self-assessments of their digital progress, carriers “were far from bullish.”

They rated their accomplishments in terms of digital leadership, strategy development, business planning, organizational buy-in and execution at somewhere between 1.8 and 2.8 out of 5 on EY’s scale.

All carriers are not created equal, of course, and the higher-volume, lower premium, and less complex world of small commercial lines, specialty writers, and SME-focused carriers have tended to make greater digital strides than middle market and large commercial lines insurers.

That is particularly true when it comes to online quoting and sales, said Gail McGiffin, a principal in EY’s insurance practice in New York.

Insurers “leading the pack” in terms of digitalization today in the United States, Europe, and parts of Asia Pacific include direct writers of small commercial business and specialty providers of D&O and EPLI, McGiffin said.

Many of these carriers have aggressively gone after sales and services that leverage call center access and digital support, she said, whereas heavily “intermediated” markets seeking risk management accounts have been more resistant to doing business online.

“I’ve had brokers say to me directly, when they’re out having lunch or dinner with a client they’re still much more comfortable with paper,” said McGiffin.

Nearly 70 percent of EY’s digital respondents spent less than 10 percent of their business and IT budgets on mobile devices, social media, cloud-based infrastructures and high-powered analytics tools.

Kaenan Hertz, EY’s U.S. insurance customer leader, recalled that immediately following Hurricane Sandy, one insurer he knows of “with a decent amount of commercial business” had trouble contacting an insured because no email or text information had been recorded for the customer, whose physical location was no longer standing.

And yet, from small acorns grow great oaks.

Even though nearly 70 percent of EY’s digital respondents spent less than 10 percent of their business and IT budgets on developing and enhancing mobile devices, social media channels, cloud-based infrastructures and high-powered analytics tools, the insurers noted that changes in business plans over the next three years will address those areas.

“Carriers are dealing with much more significant challenges and problems in their core policy, underwriting, claims and policy systems,” Hertz said.

Expanding Digital Services

Many commercial insurers, though, are already hard at work creating and improving technology for major property and casualty accounts, group health customers, and workers’ compensation clients.

ACE Risk Management, for instance, “actually can now issue all of our policies electronically, through our web-based ACE Worldview platform,” said Matt Merna, division president of New York-based primary casualty unit within ACE USA.

“We went electronic with our policies in July of 2013,” said Merna. “Then, we took it a step further.”

042014_08part3_users_group_tabletToday, the premium audits ACE Risk Management is required to issue to its insureds — typically a data-intensive and multiple-page process, showing risk managers whether their exposures have increased or decreased — are also now delivered electronically.

Industrial property underwriter and loss control specialist FM Global, meanwhile, wants clients to have complex property-focused risk information at their fingertips — and on their tablets, with more mobile applications to come later this year.

The company’s Map Center, housed on its MyRisk platform, allows FM Global’s customers to locate their global wind, earthquake, and other natural hazard maps online so they can assess potential exposures in real time.

Detailed information on a global basis for wind and earthquake and for the United States on flood exposures as well have been available to FM Global customers via a secure website for several years.

Now, the firm is pursuing a new project to develop and post international flood maps as well. FM Global plans to release its first set of flood maps for the Weser Valley region of Germany in the first quarter of 2014.

Over the next few years, FM Global will extend the international project to Southeast Asia, Latin America and other parts of Eastern Europe, given that there is “more foreign direct investment and engineering services needed” in these locations, said Brion Callori, FM Global senior vice president for engineering and research.

The company also plans to upgrade its client extranet — a secure web platform — this year, hoping to provide its Map Center on smartphones.

Michael Falzarano, senior property loss control manager for insurance and risk management at engineered electronic components firm TE Connectivity in Berwyn, Pa., is enthusiastic about MyRisk, describing it as “a valuable risk management tool that I use on a daily basis to help reduce potential property losses from fire and [natural catastrophe] perils.”

“There are many property tools contained in this system,” said Falzarano. “One of my favorites is the Risk Mark grading scorecard. The scorecard is based on FM Global loss prevention engineering standards and provides me with a relative measure of risk quality based on a scale of 1 to 100.

“MyRisk gives me the opportunity to run a report on all of our engineered locations,” the risk manager said.

The main challenge FM Global faces is making all of its online mapping, risk reporting, and property benchmarking services for customers accessible beyond the desktop environment, Callori said.

“You can’t dictate today what type of computing device people will use to access these features,” he said.

“In redesigning the systems, we will need to focus on mobility as well as providing other mobile applications to assist clients’ loss prevention efforts.” — Brion Callori, senior vice president, FM Global

For instance, while it works well on tablets right now, viewing MyRisk information on a smartphone might be challenging, he said.

“In redesigning the systems, we will need to focus on mobility as well as providing other mobile applications to assist clients’ loss prevention efforts.

“We want the MyRisk platform to continue to be the site that clients can go to for all of the property risk management needs and information about their exposures,” Callori said.

Pharmacy and ancillary benefits claims manager myMatrixx is also endeavoring to make more mobile services available to its workers’ compensation clients. Those include insurance carriers, third-party administrators and self-insured employers — but currently, not everyone is 100 percent ready to take advantage.

Handling Claims Via a Smartphone

Despite an environment in which 58 percent of the U.S. adult population has a smartphone, according to Pew Research Institute — the average workers’ compensation claims handler is not utilizing mobile technology much right now.

“A lot of claims managers handlers are tied to their desks and may not have access to a company provided mobile device,” said Lindsay Rios, senior vice president of operations for myMatrixx.

During 2013, myMatrixx implemented a mobile application allowing claims handlers out in the field to check the status of an injured worker’s claim, authorize pending medications and ancillary medical items and even order a wheelchair or medical supplies for a patient with a few taps on a smartphone.

Via a push notification application, myMatrixx also now provides pharmacy locators pick-up alerts for customers’ patients.

For the past nine months, all of these functions have been available via a mobile phone device, said Rios, and nearly a third of the company’s clients are utilizing the mobile app to manage workers’ comp claims today.

“We designed these mobile services with our clients and their injured workers, claims managers, employers and patients in mind while also looking ahead at what the marketplace will require in the not-so-distant future,” she said.

Another myMatrixx challenge: Not everyone accessing the site uses the same portable mobile technology, said Joel Playford, myMatrixx vice president of software development.

Thus, Apples, Androids, and most other smartphones and tablets can all “talk to the same web layer we have in the background,” he said.

“We’ll be ready” as demand grows for mobile app technology,  Rios said.

Acrometis, a workers’ compensation claims manager and claims processor in Malvern, Pa., has also been perfecting a cloud-based “relatedness” claims processing technology system offering employers, carriers and third-party administrators a way to identify cases in which they’re at risk of being overcharged for workers’ compensation expenses.

To date, most of those tapping the technology have been employers “who are trying sophisticated approaches to reduce workers’ comp costs,” said Acrometis President and Chief Operating Officer Jerry Poole.

“Since workers’ compensation is supposed to pay 100 percent of covered medical expenses with no copays, it’s like an open checkbook, and people try to qualify for extra charges,” which may have to do with their age or health problems, unrelated to an occupational injury, said Poole.

When there are potential overcharges, “the system actually alerts them,” he said.

Acrometis calls its CLAIMExpert solution “a comprehensive cloud-based workers’ compensation claim processing system with a customizable, expert-based rule-driven engine that automatically routes electronic claim files and related notes, schedules and executes tasks, flags priorities and anomalies, communicates with vendors, and pays medical bills.”

To help insurers speed things up on the digital client-servicing front, Accenture’s Meyer recommended that insurers create the position of chief digital officer at their firms, and, ultimately, a digital unit or center of excellence as well.

This is the third installment of a three-part series on technology. Read parts one and two.

Janet Aschkenasy is a freelance financial writer based in New York. She can be reached at [email protected].