The irreplaceable role of human empathy in complex and specialized claims.
Published on March 28, 2022
By Nick Conca, Chief Claims Officer
Technology is a superb enabler of the claims process. There’s no doubt that speed is critical to customers, and automation can shorten the claim intake and payment process. And beyond automation, there is other technology that can enable the adjuster to more speedily analyze and assess claims.
But the extent to which technology can have a positive impact remains largely a function of need—which differs considerably based on the customer and the type of coverage. When dealing with complex and specialized claims, such as the ones we at Markel often handle, it’s essential to maintain human interaction as a component of the process. And the role of technology needs to be considered through that lens.
The unique dimensions of specialty coverage
In general, the larger the customer’s enterprise, and the more complex and specialized the nature of their claim, the greater extent to which human interaction is necessary in handling claims—as distinct from technology alone. The human element enables the empathy and understanding needed to deal effectively with complexity, creating the best outcome for the insured and the insurer.
Specialty insurers handle highly specialized claims, including unique, unusual, and hard-to-place risks. Our product lines at Markel cover a multitude of risks. They range from specialized types of property coverage, such as marine and equine insurance, to professional liability coverage, to casualty-related claims. Our deep knowledge of such niche markets helps us guide our customers and provide meaningful insurance solutions. And the claims function is one critical place where specialty insurers can stand out by providing exceptional guidance and support.
Automation and the claim phases of the customer journey
One way to better understand the role of technology at a specialty insurer is to break down the different components of the claims process. Regardless of the type of claim, the customer journey is divided into three phases:
- Phase 1: The first contact between customer and insurer. This is the period from when the claim is first submitted, until it reaches the examiner—the person ultimately responsible for resolving the claim.
- Phase 2: The adjustment phase. This is when the carrier conducts an analysis of the claim itself: establishing whether it’s covered, and assuming that it is, determining the quantum or amount.
- Phase 3: The time from claim resolution to the closing of the claim.
When we’re talking about technology, phases 1 and 3 can absolutely be enhanced through automation. At Markel, we believe they should be as fast as possible. And our goals for speed reflect technology’s potential to make a difference:
- In phase 1, we strive to get our claims into the hands of our examiners and make contact with the customer within 24 hours.
- In phase 3, once the claim is resolved and the amount is established, we aim to get the funds into the hands of payees as quickly as possible.
The special aspects of phase 2
Technology can greatly expedite phase 1 and phase 3. However, in phase 2, the claims adjustment phase, technology has not historically been a great enabler.
This phase has largely consisted of the examiner sitting at a desk, analyzing the claim on a case-by-case basis. And even today the adjustment phase remains case specific, because a carrier makes a human assessment about the claim itself: whether it’s covered, in what aspects and amount, and how to handle it from a process perspective. That’s especially true when the claim is complex.
Some carriers think the entire claims process can be automated. It’s true that with high-frequency claims, such as damage or loss to a bicycle or a standard automobile, there is merit to automation. In fact, some carriers see potential to automate even in phase #2, the adjustment phase. In their process, the customer basically talks to their computer or their phone and gets the claim adjusted. That is workable, if there is homogeneity among the claims. So if you’re only dealing in rudimentary auto coverage, renters insurance and some homeowners insurance, you may be able to do that pretty much across the board.
However, the situation is different with a specialty insurer like Markel. One day we may be dealing with homeowners’ claims as the result of a catastrophe. But the next day, we may be dealing with a major corporate customer who has an E&O claim. So in our case, one size does not fit all. The human element is essential, in highly varied ways.
The crucial human element
In certain cases, the human element can make all the difference between handling a claim effectively and failing to do so. For example, Markel provides property insurance for a US military base in Florida. Their policies contain an extra expense component if houses are rendered uninhabitable.
Several years ago a hurricane hit the base, and displaced hundreds of military families. Initially, there were no documented claims, because the insured families were not yet in a position to file claims. However, based on a deep understanding of the families living on that base and their needs, our coordinator in Florida immediately made the call that we ought to write checks to support them, right away. We executed wire transfers for hundreds of thousands of dollars, without that first claim having been filed. As a result, those families were able to get access to food, shelter, and transportation in a timely, caring, and dignified way.
After all was said and done, we received a letter from a senior officer in the military telling us how much the armed forces appreciated the fact that we put them and their families first in their time of need. Let me ask you: Can a machine generate that kind of response? The client’s appreciation brought home that these were human beings who care about each other, and appreciate being treated as such.
In a very different case, we received a telephone call from a corporate general counsel regarding a sensitive matter related to employment practices. The client believed the claim was without merit, and wanted to make sure that sensitive information, which should not be divulged publicly, was treated with discretion while we investigated. This kind of situation likewise illustrates how the human element is critical. We firmly believe being there for our customer is much more important than a specific outcome.
Some technologies that can help speed the adjustment phase
Despite the special challenges of handling complex situations like this, there are important technologies that can facilitate the adjustment phase of the claim. In today’s industry, it is not just about sending out a field adjuster, assessing the damage, and reporting back. Instead, there are many tools that can assist the examiner in more speedily analyzing and assessing the claim, while actually enhancing the human element.
For example, drones and satellite imagery can help assess damage from hurricanes, wildfires and other weather-related catastrophic events. Even smartphone videos can play a valuable role in documentation of damages.
Another important tool we have at Markel is text messaging capability. Texting enables most people to send augmented documentation to the carrier or an intermediary. It sounds rudimentary, but it isn’t. Most people have a mobile phone, even if they don’t have an email address. So it’s helpful to have systems that accept text messaging from a mobile phone. This technology allows the examiner to text our customers and let them know what’s happening in real time.
These tools allow our customers to better express themselves, which in turn gives us a better understanding of their needs. So here, technology definitely enhances our ability to connect with the customer.
Summary: Technology as a facilitator for the human element
So to sum up, technology in the claims process can enhance speed in a way that benefits both insurers and insureds. Technology offers many opportunities for added speed in phase 1—the initial claims intake—and in phase 3, the ultimate claim payment. Ideally, those phases should take place as quickly as possible, and technology is a huge enabler of speed.
However, the applicability of technology can vary a great deal, depending on the product line. Where it may vary the most is in phase 2, the adjustment phase of the claim.
For some products, automation can facilitate even that phase. In other areas, especially for complex and specialized claims, human interaction remains essential. In those scenarios, examiners need to work closely and directly with their customers. Technology can be most beneficial when it provides that closeness—enabling not only speed but also empathy, understanding, and an enhanced interpersonal connection. This in turn leads to a better outcome for both the insured and the insurer.