I'm Bill Paton, claims director for UK and Western Europe. I lead the teams that handle all the claims that RSA underwrites in the region—from household to motor, marine to professional indemnity and everything in between.

Since I started out in insurance 35 years ago, I can honestly say no two days have been the same. One thing that hasn’t changed however, is my belief that the claims function exists to fulfil the insurer’s promise to customers—paying valid claims fairly and quickly while also doing everything we can to keep premiums affordable by making sure we’re not paying out on fraudulent claims, being too generous, or expending unnecessary resource.

In an industry that is all about helping people and businesses cope with change, it’s no small challenge, but there are two megatrends that I think have played a key role: segmentation and specialisation.

Two megatrends: segmentation and specialisation

When I started as an apprentice in 1979, a person working in the claims team would have to be prepared to deal with any type of claim. Nowadays, most general insurers segment claims into lines of business—household, motor, pet, business, marine—with specialist teams to handle them.

At RSA, we take it one step further, segmenting some claims categories by peril and value. This approach lets us focus expertise and knowledge where we can have the greatest positive impact for customers, while also controlling the overall cost claim processing.

Take flood claims for example. These are some of the most difficult, complex and traumatic claims (for policyholders) that we deal with. Customers want to speak to real people who have experience of, and can empathise with, their situation and the processes involved in putting it right. In these cases, segmentation enables us to reassure customers while taking control of the claim very quickly.

With so many different people involved in returning a flooded home or business back to normal—drying out, re-plastering, joiners, electricians and decorators, to name just a few—our claims specialists can also take on the role of project manager, so we can get the best results for customers (sometimes being able to implement measures that will minimise the likelihood or impact of a recurrence), while closely monitoring our costs.

Conversely, take a claim to replace a broken plate glass window. From our point of view the likelihood of our costs compounding in this situation are low and the best way we can add value from a customers’ perspective is to process the claim as quickly as possible. We segment these types of claims into streamlined processes that minimise our involvement while getting the repair sorted as quickly as possible.

What's next for claims?

This later segment of claims is also where automation, or robotics, is starting to have an impact.

To give you a hypothetical scenario, a customer might enter the details of their claim for a broken window into a website or mobile phone app, then a computerised claims system checks their cover, scans for previous fraudulent activity, and either declines the claim or sends a cheque to the policyholder or notifies a supplier to schedule a repair - all without any human intervention. It’s a process that won’t suit everyone, but in an increasingly connected world, some customers are very receptive.

This, in my view, is the next step in segmenting claims: segmentation by how customers prefer to contact us.

Personally, I think customers who’ve suffered a traumatic event like a car accident or house fire will almost always want to speak to a human being to initiate their claim. But for low-impact claims – a stolen laptop or broken phone – more and more customers will demand the ability to select automated processes and to self-manage their claim. As well as investing in technology to enable self-serving, we’re also looking at how we design our claims processes to be able to segment by claims-initiation preference.

Fulfilling the promise

So coming back to fulfilling the promise: growing levels of segmentation and specialisation, driven by technology and customer demand, are letting insurers focus resources and efforts where customers need the most assistance and to control costs where claim values are most significant. The question for insurers is not so much is it the right thing to do, but how to keep pace… but that’s a whole different article.