Using Agile and automation to help InsuranceCo reinvent its claims function
Using Agile and automation to help InsuranceCo reinvent its claims function
This major insurer had serious potential but wasn’t executing like it knew it could. Financial performance was low and customer satisfaction was flat. It engaged Bain to transform its claims departments and supply chain. Within one year, it grew from laggard to leader.
These teams helped InsuranceCo redesign its claims process
Bain teams analyzed the market and company to propose a strategy and guide the transformation. This required expertise in insurance, supply chains, digital customer journeys, machine learning, and more.
These teams helped InsuranceCo redesign its claims process
Bain teams analyzed the market and company to propose a strategy and guide the transformation. This required expertise in insurance, supply chains, digital customer journeys, machine learning, and more.
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Advanced Analytics Group (AAG)
Data scientists from AAG helped InsuranceCo implement automation and other digital solutions to triage claims, process simple claims faster, and estimate with greater accuracy.
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Executive / Manager Assistant
Executive Assistants and Manager Assistants helped optimize team members’ time by solving complex cross-organizational, cross-time zone scheduling puzzles.
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General Consulting
The consulting team helped InsuranceCo’s leaders assess their opportunity from two perspectives: top-down and bottom-up. They used that analysis to establish five customer-centric transformation missions. They then launched a series of Agile initiatives to fulfill them.
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Global & Local Operations
The operations team made this work possible long before it began: They set the travel policies, budgets, operating models, and workflows that allowed everything to come together.
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Innovation & Design
The Innovation & Design team helped InsuranceCo identify areas where it could create more value. For example, with timelier digital messaging and fully automated online claims. They didn’t just help InsuranceCo catch up—they helped it build a foundation for its ideal digital customer experience.
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New Ventures
The ArcBlue team used their software and expertise in supply chain and procurement to help InsuranceCo identify, prioritize, and validate its unit cost opportunities. Together, they redefined its supplier relationships and trained InsuranceCo’s team in contract negotiation.
Background
Compared to its peers, InsuranceCo was under-performing financially. Net loss ratios were too high in its motor and property divisions, and its personal injury division was dogged by high claims costs. Meanwhile, customers complained of poor communication and slow processes. Its customer satisfaction rating had remained flat over the past three years and its brands were “middle of the pack” in market surveys.
The case for change was clear. Leadership declared their ambition to become their region’s “most innovative and trusted insurer.” They set a three-year plan to significantly improve the company’s cost base and reimagine its customer experience with digital technology. For help with that, they turned to Bain.
The plan
From the outset, Bain encouraged InsuranceCo to be bold in its ambitions. Bain consultants analyzed the opportunity top-down, examining the executives’ goals, and bottom-up, based on industry benchmarks, to understand the full potential. They then highlighted the greatest areas of opportunity for the company to pursue first.
Through workshops, Bain teams asked the leaders of each claims unit to imagine a future in which new technology and practices had helped them better serve customers’ unmet needs. The consultants supported those conversations with a detailed analysis which visually mapped those customers’ needs, goals, and obstacles to each stage. They then asked those leaders, “What would be necessary to make your future customer experience a reality, today?”
What emerged was a set of initiatives to drive claims excellence via end-to-end tracking, supply chain performance optimization, market leadership in Natural Hazards category, and overall strengthened operational performance. Bain and InsuranceCo then set about making it a reality.
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What was the full potential of InsuranceCo’s claims departments?
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What pillars should they focus on? (Supply chain, digital, data, automation, etc.)
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How should the program be set up?
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Which initiatives deserved the greatest priority?
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What was needed to assure and accelerate these initiatives?
The approach
The approach of pursuing the lowest effort, highest output opportunities first paid off and generated savings that self-funded the transformation. InsuranceCo’s redesigned claims journey began driving a significant proportion of those claims online, and because more digital meant more data, they were also able to better segment incoming claims. This allowed them to deflect suitable claims to self-help and to route the remainder to advisors who could now specialize and respond more effectively.
Meanwhile, Bain’s data scientists helped InsuranceCo build a claims triaging decision engine to assist advisors, and applied machine learning to improve estimation accuracy. At the same time, the consulting team and ArcBlue used detailed supply chain data to help InsuranceCo figure out how to secure the best rates through a continuous and comprehensive portfolio review.
Each successive initiative produced more savings and greater efficiency, which began to compound.
The results
Within one year, InsuranceCo had transformed its claims function. It was able to greatly reduce its indemnity costs by better controlling its supply chain, and all the partners involved in repairs and claim fulfillment. It reduced the cost of handling claims, greatly improved its Net Promoter Score℠, and improved employee engagement.
In addition to 4% run-rate savings in the second year, InsuranceCo exceeded its earnings guidance, boosting its share price and opening a $4 billion valuation gap with its nearest competitor.
valuation gap gain over its most direct competitor
expected run rate savings in fiscal year three of the transformation
