Jul 96 min read

InsurTech Ohio Spotlight with Luke Harris

Luke Harris is the Head of Automotive and Technology at Claim Assist Solutions, delivering a full suite of end-to-end solutions that address all aspects of the insurance claims resolution process. Luke was interviewed by Andrew Daniels, Co-Founder and President at CrashBay and Founder and Managing Director at InsurTech Ohio.

Luke, you've been a part of the insurance industry from multiple sides, what carriers have gotten it right?

“There are a number of players who have been doing certain things well the past few years. We're seeing both insurtechs and established legacy players deliver really cool things with automation and self-service capabilities. With unique enhancements to product offerings, claims organizations are finding new ways of leveraging data to further improve their claims processes. Other carriers continue to win honors year after year for being best-in-class from a customer service perspective, maintaining the established presence that they've built which is incredibly powerful in the current industry environment. Other claims organizations are heavily indexing on delivering value to their bottom line through accuracy and operational efficiency initiatives; many of whom are recognizing the value of partnering with forward-thinking firms to support and complement their internal capabilities.

All of that said, one publicly traded carrier stands out above the rest due to its consistent balance of performance across the primary pillars of successful claims organizations. That would be quality, accuracy, operational efficiency and service. For this firm, it's driven by a company-level culture and focus on operational excellence and disciplined execution along with a healthy leaning toward data-informed risk-taking. Although they're not infallible, as they've been surprised by macroeconomic changes and certain things beyond our control in the insurance business, the stability of their claims organization has supported their ability to recover from pandemic-related profitability challenges much more quickly than the industry at large while continuing to grow their consumer base and innovate as they've done it.”

Who is going to win in this space, and what do they need to do to win?

“Based on that prior description, you can probably imagine where I'm going to go with this answer as well. Of course, technological advancements and changing consumer expectations toward a more digital, on-demand future make it a very exciting time to be in this industry. That said, the winners are going to keep a heavy focus on the fundamentals of quality, accuracy, efficiency and service, along with a heavy emphasis on talent acquisition and development.

The reason is that we have access to and are deploying many tools that make the adjuster's job easier on some of the more mundane tasks - the simple tasks that are not necessarily adjudication functions but more of processing claim documentation. We're beginning to see the ability to not only automate certain things that used to represent a high percentage of an adjuster’s workload, but also provide data-driven insights that reduce the amount of time it takes to arrive at accurate claim outcomes. The result is the adjuster of the future’s desk being filled with a higher percentage of complex claim files and tasks requiring deep expertise and an even heavier cognitive load. As a lot of industry talent begins to retire, there's a deficit in new people coming into this industry with that level of expertise and skill, which presents some risk to the profession. We're augmenting that with advancements in AI, real-time knowledge delivery, etc., but talent must remain a heavy focus for anyone who wants to win in the future.

The industry is changing. You have to make sure you maintain the focus on the fundamentals. If you try to skip a step, you're going to fail. It's those fundamentals coupled with a heavy focus on risk-taking to try new things. You have to be pushing your game forward continuously, and that’s where the winners are going to be. A tech strategy has to be a part of where you're heading with your organization, or you will fall behind if you haven't already.”

What do you think about building in cooperation with industry partners?

“I've been fortunate to see the industry on multiple sides and learn from some of the best in the business, and I really appreciate this question. You may have heard the phrase ‘innovate or die’ used in a variety of forums, agnostic of industry, along with the associated cautionary tales. I believe there's an equally important philosophy of ‘partner well or die.’ Players in our space have to be strategic about - and protect - their core competencies, but also recognize where it’s advantageous to outsource or co-develop products and services with like-minded partners.

There’s no one-size-fits-all approach. Your strategy may include a model where the majority of operations are insourced because you believe you do it best and don't want anyone to know how you make your secret sauce. Alternatively, you may take the approach of identifying ‘best in breed’ at the capability level and build a customized program with ingredients from a variety of sources that’s unique to your specific business needs. Regardless of your philosophy, you have to be purposeful about it. You have to have an outsourcing strategy, partnership strategy and joint development strategy to be successful. Sometimes that may even look like firms or organizations who seem to be competitors working together to develop something that benefits their shared client base or the industry at large. There are a few examples out there of companies who have done just that; seemingly incompatible firms doing something really innovative to benefit the industry.

I mentioned earlier that it will be crucial to partner well as the industry continues to transform. Those who are more difficult to work with will find themselves in a dangerous position where they're falling behind either because their internal processes or philosophy on partners or suppliers are at odds with that true ‘win-win’ value proposition. Selecting strategic partners with shared values and winning together is where you will find the leaders.”

What's next for this part of the claims industry?

“Historically, the insurance industry and the claims industry tend to be slow-moving and risk-averse. We have a distributed regulatory model where the business is regulated at the state level. You have many jurisdictions that have different views on how to best regulate the business to protect consumers while maintaining a healthy and stable marketplace. This creates challenges in deploying new products and services at scale and naturally makes the insurance industry move slower than the pace of technological advancements and adoption in other industries. While this can be a hindrance to truly disruptive innovation, it also provides plenty of foresight into what’s next in the claims industry. We're seeing this play out now. We see where technology and consumer expectations are going, and we’re hearing about it in multi-year strategies from insurance organizations and claims leaders across the country. We’ll see these things (delivery of process automation, self-service capabilities, data-driven decisioning, etc.) play out over the next few years.

The bigger challenge is disciplined execution. Claims leaders need to remain steadfast as they answer the questions: Is our house in order and prepared to deploy new capabilities? What are we going to commit to? Which of those things are we going to deliver at pace? Can we do this in a safe and responsible manner, so we don't unintentionally disrupt ourselves or the industry?

Some disruption is good, but when you look at the dollars involved and the small margins in this industry, there's a reason that we're very conservative with the things that we deploy and how we stage both new products and new ways of doing business in the industry. That said, we're going to continue to see the adoption of self-serve capabilities as long as we're providing the beautiful experiences people want.

We're also seeing a lot of interesting new products coming out. For example, pet insurance has gone mainstream, although as the product matures, profitability in this line is presenting challenges. The product didn't used to exist, but the fundamentals of peace-of-mind in insuring against risk doesn't change how we process claims. At the end of the day, you're adhering to a contract, and you have an obligation to fulfill that contract and pay what you owe as a claims adjuster. Fundamentals don't change, but we're going to continue to push the envelope on how we deliver service and how we automate to drive operational efficiency without sacrificing service. Along with that, we will continue to push accuracy to benefit the bottom line. Insights that we're getting from available data will help us continue to put pressure on a more and more accurate claim portfolio in aggregate. That will benefit policyholders because operational efficiency and accuracy allows carriers to offer their products at a lower cost.”