Viewpoint: 3 Trends Shaping the Future of Claims Management

In recent years, we’ve seen worsening climate catastrophes, escalating civil unrest, rising interest rates and the introduction of game-changing technological advancement.

While these big-picture changes require critical planning, many professionals in the property and casualty field are frequently working in reactive mode, consumed by a constant stream of daily challenges while trying to maintain efficient operations.

That’s precisely why I love getting together with my colleagues, peers and partners at industry events. It allows us to Zoom out from the day-to-day tasks and spend time discussing the broader issues shaping the insurance landscape.

Recently, I was fortunate enough to have the opportunity to host a panel at Verisk’s Elevate 2024 conference on the future of claims management, an especially important topic as we face more frequent and severe claims against a broader backdrop of industry transformation and record underwriting losses. Several recurring themes emerged throughout the panel discussion, highlighting some of the biggest issues facing claims management — and insurance at large — this year and beyond.

Maroun S. Mourad

So, what are insurance leaders thinking about, and how can their strategies inform our approach to addressing industry challenges?

Trend No. 1: Talent, talent, talent

Attracting, retaining and developing talent is a priority for nearly every organization in the insurance ecosystem, regardless of whether you’re an insurance carrier, third-party administrator, restoration contractor, adjuster or service provider. With shorter average employee tenures and not enough talent to match demand, insurers face unprecedented challenges in building and maintaining a qualified workforce. As one panelist I spoke to put it, “Talent, talent, talent is to insurance as location, location, location is to real estate.” It’s both a scarcity and a necessity.

The job market has fundamentally shifted toward a candidate and talent-driven marketplace, so we as employers must do an even better job of seeking out, engaging with and listening to top talent. Historically, our industry has struggled to attract young professionals seeking dynamic opportunities. As a result, we’re losing the next generation of leaders to industries more often perceived to be innovators, like technology and consumer goods.

So, what can we do about it?

Our most effective tool for engaging talent is purpose. The industry’s most fundamental mission is to help build resiliency and restore lives, communities and businesses by showing up on someone’s worst day to help them recover from a loss. I often say that claims management is a process of helping the world get better. That’s a powerful message to send to a generation of workers increasingly seeking purpose-driven work

Another positive recruiting tactic that is gaining steam is investment in non-traditional talent pipelines. This can include veterans who are looking to reskill, applicants without traditional college credentials and the vast, impressive and under-leveraged pool of retirees who want to contribute on a part-time basis. We can’t wait for talent to find us — we need to be proactive about marketing our industry to people searching for a meaningful career.

Attracting talent is only the first step. We must also invest in nurturing and creating an environment where employees can thrive and drive innovation. This involves leveraging technology, human capital and other resources to alleviate the day-to-day repetitive and lower customer-value-delivering administrative burdens on our staff. By enabling our employees to focus on more interesting and strategic work involving actual human interaction, we can better attract and retain talent, respond more quickly to incidents and solve industry challenges more effectively.

Trend No. 2: Generative AI and augmenting human expertise

At this point, you’d be hard-pressed to find someone who hasn’t heard of generative AI. As we move deeper into 2024, players across the industry will move from GenAI exploration to the implementation phase. It’s an exciting and pivotal moment in time.

There’s wide agreement among industry leaders that GenAI and similar advanced technologies aren’t replacing human roles but enhancing them. By augmenting the manual tasks of adjusters, underwriters and other industry professionals, AI allows us all to accomplish more with less. As a result, we will benefit from more capacity to focus on meaningful work like servicing policyholders, managing business-critical projects (including solving the talent shortage) and freeing up claim investigators’ time to focus on complex fraud cases. This shift not only maintains but can also potentially lower costs for customers amid soaring operational expenses.

For example, there’s tremendous potential to save time and resources with GenAI in casualty claims, which often involve lengthy and complex medical records that claims handlers must review, triage and summarize. GenAI tools are helping significantly expedite this process by automatically cataloging and summarizing critical medical information from these long reports.

My co-panelists at Elevate shared some compelling examples of how their companies are pioneering GenAI to benefit employees and clients alike. One speaker explained how AI allows them to streamline the estimation process by analyzing claim photos to assess and identify damage. Another shared how they’ve successfully implemented chatbots to improve communication with insureds and industry partners during large-scale disasters.

These use cases are only the tip of the iceberg. I’m incredibly optimistic about GenAI’s potential to improve service delivery and provide policyholders with more personalized and effective support. One caveat — while it may go without saying, I’ll say it anyway: The industry must approach AI adoption with an abundance of caution, ensuring safeguards are in place to prevent biases, ensure data privacy and ultimately operate under expert human oversight.

Trend No. 3: Fostering collaboration and interoperability

The insurance ecosystem is quickly moving toward a place of connectivity and collaboration, recognizing the value of greater interoperability between systems and data sources. The need for a more interconnected claims network is a topic I’ve written about in the past and feel passionately about, so I was glad to hear others are also thinking about opportunities to improve the technical infrastructure that powers our work.

The current ecosystem of claims solutions is fragmented and poorly integrated. Just consider the number of partners involved in processing a single claim. Most solutions set out to solve a specific problem in the claims process, not to optimize the claims process itself. Our dependency on each other is clear. But often, self-imposed barriers hinder our effectiveness. Operating in silos and inconsistent data-sharing practices result in a complex, costly and time-consuming process for adjusters, ultimately to the detriment of the policyholder. Just consider that only 7% of insurers are using straight-through processing in personal lines claims.

A fellow panelist aptly pointed out, “a rising tide lifts all ships.” When we come together, the sum of our efforts exceeds the capabilities of any single part. The Medicare Secondary Payer, Section 111 mandate highlights the power of collaboration within the insurance industry. By uniting around a standardized data format, we navigated potential operational disruptions, showcasing how joint efforts can lead to more integrated claims management solutions.

While embracing coopetition may feel uncomfortable, it’s important to remember the industry’s North Star: To support individuals during their darkest times. By improving our ability to share data, insights and information seamlessly across an open ecosystem we can do just that. And we all benefit from a market-driven environment where solution providers are incentivized to continuously evolve their products and services.

Navigating a path forward

Attending Elevate always leaves me feeling invigorated and full of inspiration. I am constantly impressed by the amount of problem-solving we can do when so many smart and empathetic leaders are all in one room together.

We have a lot of work ahead of us to address these challenges. At the same, the landscape is equally ripe with incredible opportunities to transform our operations with purpose, innovation and collaboration at the forefront. By intentionally attracting and developing our people, leveraging technology to support staff and encouraging an ecosystem of cooperation, we can fulfill our mission of making the world better.

The call to action is clear: to turn challenges into opportunities backed by determination and vision. How will you and your organization move forward in this critical moment?

Mourad is president, claims solutions, for Verisk.